Partner Bambos Tsiattalou comments on the news that an investigation by the BBC and Premieres Lignes, a French media agency, claims that EY aided the laundering of drug money.

 

Bambos’ comments were published in the Law Society Gazette, 28 October 2019, and can be found here.

“Accountancy giant EY covered up evidence after a gang used black market gold to launder dirty money, a BBC documentary will claim tonight in the latest allegation highlighting the role of the professional services sector in financial crime.

According to the programme EY’s lead auditor in Dubai, Amjad Rihan, wanted to report the suspicious activity but was told not to by his superiors. A compliance report was also rewritten by EY to cover up the crime, the documentary claims.

In a related incident, EY allegedly failed to report evidence of smuggling after conducting a review into a company’s supply chain compliance. The BBC claims Renade International, which was owned by a member of a crime gang which collected cash from drug dealers, sold 3.6 tonnes of gold to a refinery in 2012.

When EY was asked to conduct a review of the refinery’s supply chain compliance it discovered it had paid out a total of $5.2bn in cash in 2012, but failed to report the suspicious activity to the money laundering authorities. $146m of the cash allegedly went to Renade International.

Bambos Tsiattalou, partner at criminal and civil litigation firm Stokoe Partnership Solicitors, said: ‘Auditing firms need to adopt a more risk-based approach to money laundering in future. This is a systemic issue and, as such, requires a systemic response. Nowadays, money can easily move across borders, particularly within the EU’s single market. Therefore, any effective regulatory response must be both systemic and transnational.'”

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