Former Deloitte partner expelled from profession for Capital fraud

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The Independent Online

A former partner at Deloitte & Touche, one of the big four accountancy firms, has been expelled from the profession for fraud connected to Capital Corporation, the casino group beset by management and financial problems in the 1990s.

A former partner at Deloitte & Touche, one of the big four accountancy firms, has been expelled from the profession for fraud connected to Capital Corporation, the casino group beset by management and financial problems in the 1990s.

Stephen Ives was found guilty of fraudulently obtaining a Range Rover from Capital Corporation, an audit client of Deloitte, in 1996, and deducting the cost of the car from the professional fees due from Capital to Deloitte. He manipulated Deloitte's accounts to conceal what he had done, according to a statement yesterday from the Joint Disciplinary Scheme (JDS) which investigates alleged malpractice in the accounting profession. The Ives case came to light in 2000.

Mr Ives, who did not return calls made to his Windsor home yesterday, was ordered to pay £87,000 costs. Dinesh Patel, a sole practitioner trading as Ashley Ross & Co, was severely reprimanded for helping him forge and backdate documents, and allowing his company to be used in the scam.

The JDS said: "He did not disclose to Deloitte what he had done because it was in his mind to get away with obtaining the car by way of an improper set-off against Deloitte's fees."

Deloitte is waiting for the outcome of a second, more wide-ranging JDS investigation into the accounting affairs of Capital Corporation, which is expected next week. It looked at the accountants both at Capital Corporation and those people at Deloitte involved in its audit.

A spokeswoman for Deloitte yesterday refused to comment about the Ives case or the second JDS investigation. "Mr Ives was suspended as a partner and left the firm in 1996. We are aware of the [second] investigation. The report hasn't been finalised so we are not going to comment on it," she said.

One area included in the second investigation relates to events surrounding Mr Ives's appointment as a non-executive director of another Deloitte audit client, after he had been suspended by the accountancy firm.

Deloitte has been making representations to the JDS about its investigations into Capital. The disciplinary body is expected to decide in the next few days whether to issue formal complaints against Deloitte.

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