A former senior companion at Ernst & Younger has accused the agency of knowingly enabling organized crime-linked gambling companies in a sweeping federal criticism filed within the Southern District of New York.
Joe Howie, a 35-year veteran of EY and former co-leader of its International Assurance Threat Heart of Excellence, alleges the agency “knowingly permitted the Agency to offer audit and different skilled companies to corporations, notably within the gaming, on line casino, and hospitality sectors, that have been managed by or carefully related to organized crime syndicates and different felony teams and exercise.”
EY whistleblower alleges agency allowed organized crime-linked playing operations to thrive
Within the 118-page filing seen by ReadWrite, Howie states that from 2017 to 2023, EY issued “unqualified audit opinions” for a bunch of publicly listed on line casino corporations regardless of their filings containing “materials misstatements.” He claims that these corporations had connections to transnational organized crime networks engaged in illicit operations price “billions of {dollars}.”
Howie warned that EY’s purchasers have been “implicated and/or concerned by proxy in bribing authorities officers, defrauding governments, and different severe unlawful acts.” But EY “knowingly continued their audit and different engagements with out taking efficient motion to finish these relationships or scale back the danger of audit failures.”
The criticism identifies three US Securities and Change Fee (SEC) registrants, anonymized as Registrants 1–3, that have been allegedly managed by households with ties to Chinese language organized crime teams. In response to Howie, a type of households’ patriarchs was often called “the Godfather of Macau,” and his youngsters have been positioned in management roles throughout affiliated on line casino entities.
Howie reported to EY management that these entities have been engaged in “felony exercise… over $100 billion.” Amongst these implicated have been high-profile junket operators Alvin Chau and Levo Chan, each convicted in Macau lately. Chau’s agency, Suncity, reportedly ran non-public VIP rooms in casinos operated by EY purchasers, which “offered the platform for a few of Chau’s largest VIP operations.”
‘Excessive-risk purchasers’
Regardless of receiving repeated inside warnings, Howie claims EY “refused to appropriately take care of the authorized threat conditions,” prioritizing income from high-risk purchasers. He says EY’s International Threat Administration Chief advised him that “high-risk purchasers ‘pay higher,’” and ending these relationships would require a “basic shift in EY’s tradition.”
The criticism additionally studies that EY’s audits “violated skilled requirements” and “possible broke SEC legal guidelines,” together with failing to detect or disclose consumer ties to organized crime and cash laundering. Howie raised issues that EY charges themselves might have been paid with the proceeds of unlawful actions.
Howie claims that when he escalated issues and pushed for stronger compliance, EY retaliated by eradicating him from management roles, denying transition alternatives, and finally forcing his early exit from the partnership. He filed the whistleblower criticism beneath the Sarbanes-Oxley Act.
The allegations depict a agency that publicly emphasised ethics and audit high quality whereas internally ignoring crimson flags. “The fact at EY is in stark distinction to its messaging,” the criticism states. “EY leaders have deserted these said values and as a substitute prioritized industrial pursuits.”
EY has not publicly responded to the criticism.
ReadWrite has reached out to EY for remark.
Featured picture: Jean-Luc Valentin / Creative Commons Attribution 3.0 Germany
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