One of the Big Four accounting firms, Ernst & Young (EY), has recently been embroiled in a major audit scandal. A former senior partner has officially filed a lawsuit in a U.S. federal court, accusing EY of condoning money laundering and fraud activities linked to a Macau gang-backed gambling group during years of auditing, and systematically suppressing internal whistleblowers in an attempt to cover up the truth.
The plaintiff, Joe Howie, who served at EY for over 35 years and was a co-director of the "Global Center of Excellence in Risk," directly accused EY in the lawsuit of providing audit and consulting services to several companies associated with Alvin Chau, the founder of Suncity, and Levo Chan, head of the Tak Chun Group, while turning a blind eye to their alleged transnational organized crime activities.
Public records show that Alvin Chau was sentenced by a Macau court in 2023 for illegal gambling, fraud, and involvement in gang organizations. Levo Chan was also convicted subsequently. The gambling empire they operated was once involved in underground fund flows worth hundreds of billions of dollars, with some of their enterprises even listed in the United States, where EY was their main auditing firm.
The lawsuit points out that EY has long issued "unqualified audit opinions" for these high-risk clients, failing to disclose any anti-money laundering vulnerabilities, illegal fund flows, or conflicts of interest in their ownership structures. When faced with external regulatory queries, EY's senior management tried to downplay the risks, attributing media reports to "unsubstantiated allegations" or "political attacks."
More concerningly, Howie claimed that he had repeatedly warned the headquarters' senior management about the risks associated with these clients, but was suppressed. He was stripped of project authority, excluded from key decisions, and ultimately forced out of his partnership and dismissed without being allowed to retire voluntarily.
The complaint also reveals that at least five U.S.-listed companies closely related to the Macau gambling industry, whose actual controllers are alleged to be associated with the Chinese Triad, including members of the late casino magnate Stanley Ho's family. These individuals have been repeatedly denied gambling licenses by countries such as the United States and Australia, yet EY still issued them "clean financial statements," raising widespread doubts.
Howie's lawyer harshly criticized, "This is not an audit error; this is EY deliberately ignoring legal obligations to maintain clients and revenue, sacrificing public trust and market transparency."
As of now, EY has not publicly responded to the lawsuit. However, it is noteworthy that in 2022, EY was fined $100 million by the U.S. Securities and Exchange Commission (SEC) for internal staff cheating on ethics exams.
If this lawsuit is proven, EY may face multiple investigations and severe penalties from U.S. regulatory authorities, and its senior management team may also be held legally responsible. This scandal has once again ignited the "casino-audit-money laundering" gray industry chain and sounded an alarm for the audit independence of the global Big Four accounting firms.
