In 2003, Friedman was convicted in a case involving prostitution and drug usage. Friedman had been accused of offering cocaine to Ukrainian prostitutes he had ordered through an escort service that was being investigated for forced prostitution. Friedman's crime was discovered almost by chance, when police wiretaps for the investigation into forced prostitution led them to the name "Paolo Pinkel", which turned out to be Friedman's alias when using the service. However several Jewish leaders claimed Friedman's arrest was part of an anti-Semitic witch-hunt. Investigators raided his home and found small quantities of cocaine. He was fined €17,400 for possession of cocaine, on 8 July 2003. The settlement enabled him to avoid a trial. After publicly admitting to the drug possession Friedman stated "I have made a mistake. Drugs are no help. I am resigning from all public offices that I hold." As well as resigning from the Central Council of Jews Friedman also resigned from the Christian Democratic Party.