Accountant + casino bets + audit = uh-oh.

Remember that story about the accountant who liked to gamble?

The one who was a former chief risk officer at Deloitte and hid thousands of dollars of personal bets placed at a casino in 2009 while the accounting giant audited the gaming center’s corporate owner?

That would be James T. Adams, CPA.

The Securities and Exchange Commission reported Tuesday that Adams “accepted tens of thousands of dollars” in casino markers at the facility being audited and “concealed” the loans from Deloitte.

The transactions violated rules that require accountants to remain financially independent of the companies they’re auditing, the SEC concluded. Adams, who retired from Deloitte in 2010, settled the matter by accepting a two-year suspension from serving as an accountant for any publicly traded company.

But the SEC never did name the company involved. Instead, the Wall Street regulator identified it only as “Casino Gaming Issuer.”

However, a check of other SEC records makes clear the firm was Caesars Entertainment, a publicly traded firm that owns casinos in Las Vegas and Atlantic City.

Deloitte notified Caesars in April 2013 that the SEC was investigating the gambling episode, the casino firm disclosed in a May 2013 filing.

According to that disclosure, an internal review by Deloitte concluded the gambling episode “did not at any time impair” the accounting firm’s independence,” in part because “these activities were not inconsistent with the SEC’s independence rule.”

Deloitte also contended the accountant “had no substantive role in any audit or review concerning Caesars.”

Caesars concurred, after conducting its own review. Nonetheless, the company warned that if financial regulators ruled the episode had compromised Deloitte’s independence, that “may adversely affect Caesars Entertainment’s ability to comply with certain obligations imposed by federal securities laws and certain debt agreements, which would have a material adverse effect on our business and financial condition.”

Since the SEC essentially reached just such a conclusion, what does that mean for Caesars business operations, and for Deloitte?

The SEC declined to discuss any issues beyond the order involving Adams. Caesars did not immediately respond to detailed e-mails seeking comment. Adams’ attorney, Scott Schreiber at Arnold & Porter, earlier this week said his client had no comment on the case.

“Deloitte fully cooperated with the SEC in its investigation of Mr. Adams.  This former partner’s conduct plainly violated Deloitte’s policies, and he lied to Deloitte to conceal his actions,” said Jonathan Gandal, a Deloitte spokesman. “Mr. Adams is no longer part of our organization, and we strongly condemn his conduct.”

The work in question was completed more than four years ago, and Adams’ role was not focused on the audit, Gandal added.

Culled from USA TODAY.