Wirecard: Did the 1.9 billion euros really exist?

Wirecard brought down 1.9 billion euros. So far the hypothesis has been that money never existed. But research by NDR, WDR and SZ suggest that it may have flowed out of the company.

Alfred Dierlamm is already waiting for his appearance on the stage in the atrium of the Museum for Communication in Berlin while the audience is still on the coffee break. The chairs in front of him are empty. The defense attorney stands at the console and waits for his grand entrance. He has already had many of them, as he usually represents business managers in criminal proceedings. But rarely has a situation been more complex than that of his current client, Wirecard’s ex-CEO Markus Braun. He has been in custody for months, and a detention test is pending. And Dierlamm wants to change something in the current situation, which is why he made a sweeping blow.

As soon as the guests have sat down, Dierlamm makes it clear what he is going to be about today. In the introduction to the moderation, there was talk of a “not entirely insignificant accounting scandal,” says the lawyer. “I don’t want to contradict you with the attribute ‘insignificant’,” he says. But: “Whether it is actually a balance sheet scandal” is precisely the question. Dierlamm believes that he has found evidence that could portray the case very differently.

Allegations – enough for 15 years in prison

The previous allegations against his client weigh heavily: gang-like fraud against investors and banks in the billions, falsification of accounts, market manipulation, infidelity – enough for 15 years in prison. Markus Braun seems to be at the center of the biggest economic scandal that Germany has ever experienced. In June 2020 it became clear that 1.9 billion euros were missing from Wirecard accounts in Asia, and the group then filed for bankruptcy.

According to the public prosecutor’s office, the money does not exist. It was virtually invented to deceive the capital market. And Braun is said to have been involved in all of this and even headed the gang that deceived.

According to research by WDR, NDR and “Süddeutscher Zeitung” have actually been showing more and more evidence for previously unknown and dubious payment flows through accounts of the Group’s own Wirecard bank for a few months now. Hundreds of millions of euros have therefore flowed through alleged partners from Asia via the Wirecard internal bank to companies in the Caribbean and other offshore and tax havens.

That raises a lot of questions. Some of them: Did Wirecard’s third-party business, which is decisive in the case, exist after all? Did the 1.9 billion euros actually exist, just not with Wirecard? Is it possible that a gang around the fleeting board member Jan Marsalek has enriched the company much more than previously thought? At least that’s how Alfred Dierlamm sees it. His client would thus be partially relieved and should – as he sees it – be released from custody.

Where’s the money when there’s some?

It is unclear where the money is today. The defense attorney Dierlamm uses account statements to identify a pattern: a shadow structure at Wirecard itself. According to this, the money usually came from Wirecard partners in Asia, was related to the payment business and was initially in accounts at Wirecard Bank arrived. From there it was then transferred in large but regular tranches to companies in tax havens, including Dubai, the British Virgin Islands or Antigua.

Hundreds of millions of euros are said to have flowed in this way and seeped away to unknown recipients. In order to completely unravel all of this, the investigators would certainly need another two to three years. No German court, so apparently Dierlamm’s calculation, will be able to hold onto his client until then. So far, charges against Braun and others can be expected in the first half of 2022.

Is there a money laundering system behind it?

The public prosecutor’s office is also familiar with the dubious million transfers, but the investigative authorities apparently come to a different interpretation than Dierlamm. Could there be a gigantic money laundering system behind this, with which Marsalek and his friends cleaned up income from dirty businesses, possibly from mafiosi and secret service agents? Some kind of service provider for organized crime? So far there is no evidence of this. The public prosecutor does not want to comment on the state of affairs.

She sticks to her allegation that the third-party business in Asia was wholly or largely an invention. Investigation documents say that there is no evidence of the shadow structure of Marsalek & Co. alleged by Braun’s defense. In other words, a system that would have served to divert billions in proceeds from third-party business for other purposes. However, if Dierlamm’s thesis of the shadow structure turns out to be reliable, the current investigation hypothesis of the bloated Wirecard group and its falsified accounts would hardly be sustainable. If, in the meantime, it was a money laundering network, as the public prosecutor apparently assumes, this thesis would continue to apply.

This is also the moment when things get interesting for investors. So far, they have had little chance of claiming damages, and lawsuits against former parties or auditors seem hopeless. A few hundred million euros, which could possibly be available somewhere, come in handy – if you can get hold of them. Jan Marsalek’s lawyer, the fleeting Wirecard board member who was responsible for business in Asia, has not yet commented on the allegations.

Will ex-CEO Braun be released first?

With both interpretations, however, one question remains unanswered: What did Markus Braun know? The fourth detention test for the former CEO is currently underway. The court has denied his early release three times. Now Dierlamm is hoping for the opposite and calculating: If the investigators first have to track down the complicated streams of millions, the process will probably take a long time – so long that Markus Braun might even be released for the first time.