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Best of Liz Benston

Gaming Guru

Liz Benston
 

Key Gaming Auditor Switches Companies

4 November 2003

LAS VEGAS -- A former partner and head of Deloitte & Touche's gaming auditing business in Las Vegas has joined a new competing office in Las Vegas for Ernst & Young.

Tom Roche, who left Deloitte & Touche a few months ago, will lead the office with Managing Partner Peter Zofrea, a 20-year Ernst & Young veteran who most recently handled real estate, hospitality and construction companies from the company's Orange County office in Irvine, Calif.

The new office will meet increasing demand for auditing services in the Las Vegas gaming, real estate and hospitality markets, Ernst & Young officials said.

"The Las Vegas marketplace is a top priority for Ernst & Young," Tony Anderson, Ernst & Young Pacific Southwest area managing partner, said in a statement. "We are looking forward to enhancing our commitment to the area by establishing this office and investing in seasoned industry talent to serve the market."

Ernst & Young previously handled Las Vegas clients from other regional offices such as Los Angeles. The office will become part of the firm's Pacific Southwest region, which serves clients throughout Southern California, Arizona, Colorado, Hawaii, Nevada and New Mexico.

The firm anticipates transferring employees from other Ernst & Young offices to Las Vegas as well as hiring away "some of the best and brightest in the local market," spokeswoman Nicole Thomas said. "In the next three years, we will substantially grow our staff. We're in the preliminary stages of assessing what our needs are going to be."

"We're not necessarily targeting any companies in particular" for employees, Zofrea said. "We're going to assess what our immediate needs are. We're going to bring in some of our own people and hire additional people ... as we see fit."

The office -- which recently picked up Station Casinos Inc. as a client from Deloitte & Touche -- is known nationwide for its expertise in hotels, hospitality and gaming, Zofrea said.

"While we may be new to opening an office in Las Vegas, we're certainly not new to the gaming industry itself," he said.

The firm already audits 44 percent of the hotels, casinos and resorts in the Fortune 1,000. It has done work for MGM MIRAGE and Park Place Entertainment Corp. and currently audits Trump Hotels and Casino Resorts Inc. as well as riverboat casino operators Argosy Gaming Co. and Isle of Capri Casinos Inc.

The company will compete with other auditing firms for gaming clients "as we've always competed" when gaming clients come up for bid, he said.

Roche joined Deloitte in 2002 from Arthur Andersen, where he headed that firm's gaming business. Roche had jumped to Deloitte along with a stream of other Andersen employees in Las Vegas after Andersen dissolved in the wake of accounting scandals involving Enron Corp. and Andersen's Houston office. The majority of Nevada gaming clients also moved to Deloitte from Andersen, instantly establishing Deloitte as the preeminent auditor of major casino companies.

Deloitte was thrust into the spotlight a few months ago when it was mentioned in a complaint by state gaming regulators against The Mirage casino. The Mirage was fined $5 million for failing to catch the fact that an employee at the casino had failed to mail thousands of required anti-money laundering reports to the federal government.

The failure to mail the reports was missed by both Mirage internal auditors and external auditors with Deloitte.

More recently, Station Casinos dropped Deloitte over "client service issues." Representatives at Deloitte have declined to comment on Roche's departure and Roche could not be reached for comment today.

Roche joined the firm because he "saw a great opportunity to build a Big Four accounting practice and establish his presence in the community," Zofrea said.

He said he wasn't aware of the issues surrounding Deloitte's handling of The Mirage case and said Station Casinos picked up Ernst & Young when it decided to bid for business.

Key Gaming Auditor Switches Companies is republished from CasinoVendors.com.