EY whistleblower takes stand in gold bullion money laundering case

EY whistleblower takes stand in gold bullion money laundering case

A whistleblower who is suing audit giant EY over allegations it covered up a money laundering scandal took the stand today in his High Court trial against his former firm.

Amjad Rihan, who was an EY partner based in the firm’s Dubai office, alleged he was pushed out after he threatened to blow the whistle on a client of the firm whose behaviour led to serious money laundering concerns.

EY had been engaged by Dubai-based gold bullion company Kaloti to carry out an audit of its adherence with Dubai regulations.

The defendants, EY Global, EY Europe, EY EMEIA and EYGS, accepted that the EY report revealed “serious non-compliance” by Kaloti with Dubai Multi Commodities Centre (DMCC) regulations.

EY conceded that in 2013 Kaloti had received large quantities of gold coated in silver from Morocco which had been declared as gold to Dubai authorities but may have been declared as silver to Morocco authorities to evade export restrictions.

The firm also agreed that 40 per cent, amounting to $5.2bn (£4bn), of Kaloti’s business was conducted in cash.

It also agreed that Kaloti had accepted around two tons of gold from walk-in customers without carrying out proper know-your-client tests, and had also bought gold from Sudan, an armed conflict zone.

A barrister for EY today put it to Rihan that the evidence showed that Rihan and his team were not at first treating the breaches as particularly significant, not mentioning the import of Morroccan gold or the exact amount of its business conducted in cash in a draft report supplied to the client.

Rihan said the client had told him that the Moroccan gold claim was “gossip” and had documents to prove this was the case.

Rihan told the court he had said “we will go back and give you a first draft [not including the Morroccan gold claims]…but said the firm would “continue looking into them” in the meantime.

Source: City A.M.

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