U.S. Senate hopeful Joe DioGuardi prides himself on his accounting expertise – but he has a history with a firm the feds say ran a $1.7 billion Ponzi scheme.

Medical Capital Holdings and its subsidiaries bilked investors out of $1 billion while sinking millions into a mega-yacht and Hollywood flop, a complaint filed last year by the Securities and Exchange Commission said.

From 2007 to 2009, the former Westchester Republican congressman was paid $5,000 a month as a consultant for the subsidiary Medical Capital Corp. – and also got $16,000 a year to sit on boards of various other MCH subsidiaries.

MCH managed the messy books for several of the companies involved in the so-called scheme and was named in the suit.

DioGuardi, a trained accountant, claims he was oblivious to any wrongdoing.

�As a consultant, Joe was tasked with saving hospitals in New York from being shut down, but knew nothing of the schemes that were occurring behind the scenes,� said his spokesman Brian Hummell, adding that his boss �has never seen the books.�

The SEC described DioGuardi, who faces incumbent Democrat Sen. Kirsten Gillibrand in next month�s election, as an �old crony� of the company�s bosses and suggested �he�s connected to the original fraudulent scheme.�

As of last November, thousands of investors were owed $1 billion. The feds froze the company�s assets; the case is pending.

MCH moved last year to have DioGuardi replace a court-appointed manager of its assets, which include the $3.2 million yacht Home Stretch and the $18.1 million movie rights to the recent flick �The Perfect Game.�

The SEC countered that he had a long history with the company, including sitting on the board of three subsidiaries.

�DioGuardi is not �new� management at all, but rather an old crony of [the management charged with fraud] who has been on their payroll since at least 2004,� prosecutors said.

Since the managers didn�t tell the court about DioGuardi�s background with the company, the SEC said their �attempt to hide their connections to so-called �new� management shows that there is a genuine danger that �new� management is connected to the original fraudulent scheme.�

DioGuardi agreed to help the company reorganize to avoid bankruptcy after the SEC charges were disclosed, a campaign aide said. A judge denied MCH�s request.

DioGuardi, a former CPA who served two terms in Congress, trails Gillibrand in most polls by double digits.

Gillibrand�s spokesman Glen Caplin called DioGuardi�s connection to MCH �the latest example of how the former big-spending congressman turned lobbyist . . .� is completely wrong for New York.�

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(Source: NY Daily News)