Wirecard Fraud Trial: Ex-CEO Markus Braun to Face the Music in Munich

Posted on: December 6, 2022, 09:11h. 

Last updated on: December 6, 2022, 10:58h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Markus Braun, former CEO of disgraced German fintech company Wirecard, is expected to deny charges that include gang-related fraud when his trial begins Thursday in Munich.

Markus Braun, Wirecard
Markus Braun, above, before his fall from grace. Prosecutors say the former Wirecard CEO and others orchestrated a “massive criminal act” that defrauded investors and lenders out of billions. (Image: AP)

Braun’s company, which began life processing gambling and porn payments, was feted as the leading light in German fintech, with a market cap in 2018 of €22 billion ($25 billion). Its spectacular 2020 implosion will go down as one of the biggest scandals in German corporate history.

Prosecutors argue that Braun, as CEO, was responsible for everything that went on at Wirecard, including the falsifying of accounts to artificially inflate the company’s assets and sales.

Braun is expected to point the finger at former COO Jan Marsalek, who disappeared just as the scandal broke. Marsalek, now one of the most wanted men in the world, is alleged to have ties to Russian intelligence and is believed to be hiding out in Moscow under the supervision of the GRU, the country’s military intelligence agency.

€1.9 Billion Missing

Things began to unravel for Wirecard in 2019 following a series of articles published in London’s Financial Times alleging financial impropriety in the company’s Asian unit. Wirecard sued the publication for defamation.

But on June 18, 2020, the Wirecard’s auditor, Ernst & Young, refused to sign off on the company’s 2019 accounts. That’s because the auditor couldn’t confirm the existence of €1.9 billion (US$2 billion) in cash balances.

The money was supposed to be sitting in trustee accounts at two Philippine banks. But the banks denied having a relationship with Wirecard. Braun resigned a day later.

On June 21, Wirecard said the money was “missing,” and admitted it was “likely” that it never existed in the first place.

German prosecutors accuse Braun, Marsalek, and two other former executives of orchestrating a “massive criminal act” to defraud investors and lenders of billions.

Double Life

Marsalek was fired on June 18. That day, he told colleagues he was going to the Philippines to find the missing money. He booked a June 23 flight to Manila, but it was a false trail. A subsequent investigation by Philippine authorities discovered someone forged immigration records to make it appear as though he had entered the country.

Marsalek had, in fact, flown to Minsk, Belarus just hours after his firing, according to an investigation by Bellingcat, Der Spiegel, and The Insider.

The Austrian national was found to have made short trips to Russia on an almost monthly basis in 2016 and 2017, using multiple passports, including a diplomatic passport.