TechnologyAccounting SoftwareFraud – E&Y in Bank of New York probe

Fraud - E&Y in Bank of New York probe

Forensic accountants from Ernst & Young are working with the Bank of New York in an attempt to identify the weaknesses in financial controls that allowed what investigators suspect is the biggest money-laundering scam in history.

Two senior bank officers have been given leave of absence, one in London and one in New York, amid accusations they diverted up to $10 billion (£6.2bn) in loans made to Russia from the International Monetary Fund.

According to reports in New York, at least £2.6bn passed through one account in 10,000 transactions.

E&Y is the bank’s global auditor. UK head of audit Geoff Norman said: ‘In a situation like this we would always cooperate fully with the client and the authorities. We do have substantial forensic experience.’

The investigation is centered on New York but the Financial Services Authority – which is charged with tackling money laundering in the UK – could investigate the bank and E&Y. No formal inquiries are expected until a national crime squad investigation is over.

Chris Dixon, head of the profession’s regulator, the Joint Disciplinary Scheme, backed E&Y. ‘This is something the bank should have picked up and I am not sure why the auditors would look at this,’ he said.

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