EY drops appeal against $10.8M penalty payment to former employee who sued over unanswered money laundering concerns - AML Intelligence
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EY drops appeal against $10.8M penalty payment to former employee who sued over unanswered money laundering concerns

By Dan Byrne for AMLi

GLOBAL ACCOUNTING firm Ernst and Young will pay damages of $10.8M to a former staff member and money laundering whistle-blower after agreeing to drop a court challenge.   

The payment had been ordered by a UK court in April 2020 – a move which EY said it was “surprised and disappointed with,” at the time, vowing to appeal.  

But now that the firm has gone back on this appeal, former employee Amjad Rihan will be imbursed the full amount.  

It is the end-result of a lawsuit filed against the company after he found evidence that it was facilitating money laundering and did nothing to stop it.  

Mr Rihan welcomed the news that EY had agreed to drop the appeal, but he gave a stark criticism of what he called a breach of responsibility and professional ethics within the firm.  

“They need to see heads rolling at EY. It’s not satisfactory, when all this has happened, that everyone just stays in place,” he told the BBC Monday.  

His comments were a likely reference to the firm’s former managing partner for Europe and MEA Mr Mark Otty, who took the lead in dealing with Mr Rihan’s concerns.   

When he gave evidence at the original trial that ended in April 2020, Mr Justice Kerr singled Otty out as “uninterested in questions of professional ethics.” 

Mr Otty neither left nor was let go from EY and is currently the deputy chair of the firm’s Global Emerging Markets department.   

The scandal ultimately goes back to 2012 when Rihan was working at EY and his audit team discovered $5.2BN in cash paid out by a gold refiner.  

That same refiner was also discovered to have disguised a batch of gold bullion as silver in advance of their shipment from the UK to Dubai. This was done to comply with gold export limits.  

Despite raising these red flags with Otty and other senior figures within EY, none of them were acted on.  

EY has largely defended their actions however, saying after the initial damages ruling that their Dubai assurance team uncovered the suspicious activity and that sanctions were ultimately imposed on the gold refiner in question.  

Now, after dropping their appeal against the settlement, the firm says that it remains disappointed with the court refusal to consider “underlying findings of face, with which we firmly disagree.” 

“With such an impediment, we concluded that our appeal on the law, even if successful, no longer merited the time and resources involved,” a statement read.  

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