Deloitte garnered more than $200 million in fees from Credit Suisse for helping the Swiss bank cleanse itself of U.S. tax cheats. The windfall emerged as part of a lawsuit with an employee.
The U.S. consulting and audit firm is being taken to U.K. court by a partner in its Zurich practice, David Joseph, according to the «Financial Times». Joseph was let go four months ago amid concerns about his conduct and judgment, the broadsheet reported.
The lawsuit at London’s High Court reveals inner workings of a highly secretive, lucrative industry which has become indispensable to Swiss banks. Joseph, a Dutch-born forensics expert who joined from KPMG in 2012, reportedly earned Deloitte more than $200 million in fees from Credit Suisse from 2012 until relatively recently.
Concerns over Conduct
The Swiss bank enlisted Deloitte’s help to sweep itself clean of undeclared money held by U.S. taxpayers, the «FT» reported. A spokesperson for Credit Suisse, which paid $2.5 billion in 2014 to settle a U.S. criminal investigation, didn't comment to finews.com.
A spokeswoman for Deloitte declined to comment. Joseph declined to comment. The FT reported Deloitte fired Joseph following an investigation into «serious and sustained concerns as to his conduct and judgment».
Belligerence, Entitlement
The FT reported that Joseph took a «belligerent attitude» towards colleagues, and acted entitled in relation to expense reimbursements for top performers of his team. The consultant has denied all of the accusations in court filings, arguing Deloitte had treated him «unfairly and unjustly» in a potential appeal. Joseph was first verbally warned by Deloitte in 2015, according to the court filings.
Deloitte’s forensics arm was at the time led by Nic Carrington in Zurich. The team has since been subsumed into the risk practice led by Sven Probst. The change isn’t related to Joseph’s dismissal, a person familiar with the matter said.
Lost Out on Audit Gig
The Credit Suisse forensic project tapered away in recent years for two reasons: the Swiss bank had successfully closed out the U.S. accounts, and Deloitte wanted to pitch for Credit Suisse’s auditing mandate.
The bank had resolved to rotate the mandate, which is currently held by KPMG. Internal conflict-of-interest guidelines generally prohibit consultants from «double-dipping» in advisory and auditing work. PricewaterhouseCoopers won the audit job late last year.
