EY Drops Appeal and Pays $10.8 Million to Whistleblower
The global accounting and consultancy formerly known as Ernst & Young has dropped its appeal of a UK lawsuit that awarded almost $11 million to a former partner whose team performed an audit of a gold refiner located in the United Arab Emirates. In 2014, Amjad Rihan led a team of accountants that was auditing the Kaloti Jewellery Group, a Dubai-based conglomerate. They found that Kaloti had accepted gold exported from Morocco disguised as silver to avoid taxes, purchased gold from Sudan without properly vetting the suppliers, and paid out $5.2 billion in cash in 2012.
As a partner at EY, Rihan tried to convince his bosses to report the red flags his team discovered at Kaloti. Instead, they forced him out of the firm. Mr. Rihan brought a claim against EY in a London court where the judge ruled in his favor. At the time, EY denied any wrongdoing and appealed the decision until dropping the case this year.
That might seem like the end of it until one considers what happened to the Kaloti Jewellery Group. It has been investigated by agencies in the U.S., including the U.S. Drug Enforcement Agency, under suspicion of laundering money for drug traffickers. After collecting a substantial amount of incriminating evidence, the DEA and U.S. Treasury abruptly ended their investigations without bringing charges. While many international banks, especially those based in the U.S., have chosen not to do business with Kaloti, the company continues to thrive as an active participant in the global gold trade. Journalist Kyra Gurney wrote an extensive piece for the International Consortium of Investigative Journalists in September of 2020 thoroughly explaining the case against Kaloti and indicating that the U.S. government chose diplomacy over justice.
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