Financial Services Provider Scandal: New Arrest Warrants Against Wirecard Managers

Financial Services Provider Scandal: New Arrest Warrants Against Wirecard Managers

Former CEO of Wirecard Braun has been arrested again. According to prosecutors, arrest warrants were issued against two other ex-leaders. According to investigators, Wirecard was already in red in 2015.

In a fraud scandal at the Dax Wirecard group, the Munich public prosecutor issued three arrest warrants against former executives. Among other things, it concerns fraud with business gangs and market manipulation in several cases, said a spokeswoman for the Munich Public Prosecutor’s Office.

As a result, former CEO Markus Braun was arrested again. A new extended arrest warrant was issued against him, a prosecution spokeswoman said. The first arrest warrant against him was suspended on a bail of EUR 5 million. In addition, a former CFO and former accountant were arrested.

In all cases, detention was ordered, the spokeswoman said. Three suspects were imprisoned in Munich and did not convert. The former head of the Wirecard Cardsystems Middle East subsidiary is still in custody in Dubai.

The total volume of assets and sales volume have been increasing since 2015

According to investigators, the reason for the arrest was that the charges had to be “significantly” expanded. There are reasonable suspicions that the insolvency processor of payments, Wirecard, has been increasing sales and total assets since 2015, the spokeswoman said.

They wanted to cover up the fact that the company had incurred losses in actual business, the prosecutor said. Based on falsified data, Wirecard would receive loans of over € 3.2 billion, which banks are likely to lose. This follows, among other things, from the testimony of leniency that has been involved in it.

Billions posted on alleged escrow accounts

Wirecard, based in Aschheim near Munich, admitted before the bankruptcy that 1.9 billion euros, which were allegedly sent to Philippine trust accounts, were unlikely to exist. This amount of EUR 1.9 billion was the alleged revenue from the business of subcontractors who processed credit card payments for Wirecard in South-East Asia and the Middle East.

As it stands, this third party business was either completely or largely falsified. Of the 45 subsidiaries of the parent company Wirecard, only three were significantly profitable. The alleged fake transactions took place through Cardsystems in Dubai. In 2018, the company contributed a large part of Wirecard’s profit of EUR 237 million.


Mark James

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