German prosecutors announced that they had filed charges against former Wirecard CEO Markus Braun and two other top managers over the massive financial fraud that led to the collapse of the payment company in June 2020.
Braun, as well as the company's main bookkeeper and the former chief of operations in Dubai, have been charged with market manipulation, embezzlement, and gang fraud on a commercial scale. The three men are accused of working together to falsify balance sheets totaling €1.9 billion ($2.08 billion).
Braun knowingly signed off on the fradulent documents, the Munich prosecutors said.
The long time lapse between Wirecard's insolvency and the charges being brought highlighted the intricate and complex web of global transactions that investigators had to unravel. The indictment itself runs to 474 pages.
"All the accused group members were acting in an industrial fashion in these six cases of fraud, because that is how they secured their own salaries, including partially profit-related portions," prosecutors said in a statement.
What happened to Wirecard?
Wirecard was a payment-processing and financial services firm based in Bavaria, but had offices operating around the globe. Braun had been running the company since 2002, when he was brought in to save Wirecard from the burst of the dot-com bubble.
In January 2019, the Financial Times publishes a series of reports claiming multiple accounting irregularities from the company's Asia division, headed up by Chief Operating Officer Jan Marsalek.
At first, the fintech company was able to fend off the allegations, and the FT journalists were themselves placed under invesigation. However, in June 2020 auditors at the accounting firm EY found that 1.9 billion euros of cash in the company's accounts did not seem to exist.
The sum, which made up a quarter of the balance sheet, was supposedly held to cover risks in trading carried out by third parties on Wirecard's behalf and was meant to be sitting in trustee accounts at two Filippino banks. But the Philippines' central bank said the cash never entered its monetary system and both Asian banks, BDO and BPI, denied having a relationship with Wirecard.
Amongst the biggest victims of the fraud were banks that had provided 1.7 billion euros of credit to the company. At the same time, prosecutors allege, top executives like Braun were still lining their pockets with salaries, bonuses and dividends worth billions.
The scam came to light when current Chancellor Olaf Scholz was finance minister. He and then Chancellor Angela Merkel faced tough questions as to how a scam of such large proportions continued to operate under their watch.
Although a number of Wirecard leaders are in the process of being indicted, former COO Marsalek remains on the run from authorities.
es/hg (AFP, dpa)