German prosecutors from Munich filed charges against Markus Braun, the former Chief Executive Officer of Wirecard, concerning the firm’s collapse in 2021. According to the report, Braun was charged with fraud, misappropriation of corporate assets, accounting fraud and market manipulation.
Braun was first arrested two years ago, but he was only charged recently after unsealing a 474-page indictment. The AP reports that prosecutors in Munich allege that he signed off on financial statements he knew to be false and the company booked revenue that did not exist.
“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 commented in a statement. Auditor Ernst & Young discovered 1.9 billion euros worth of cash missing from the company’s accounts in June 2020, ending the scam.
Case Background
A series of articles published by the Financial Times in January 2019 alleged accounting irregularities in Wirecard’s Asian division, headed by the Chief Operating Officer, Jan Marsalek.
Nevertheless, the financial technology company was able to fend off the claims at the time, and its journalists came under investigation over the reports.
Banks that provided Wirecard with credit of 1.7 billion euros ($1.8bn) were victims of the fraud. Additionally, bonds worth 1.4 billion euros ($1.5bn) were issued and are unlikely to be repaid.
On Wirecard’s balance sheet, this amount represented a quarter of the risk associated with trading done by third parties on its behalf. It was supposed to be held in trustee accounts at two Philippine banks.
Both Asian banks have denied having a relationship with Wirecard, including the Philippines’ central bank, which said the cash never entered its monetary system.
Marsalek remains at large even after key figures in the company, including Braun, have been arrested. In addition, there are suspicions that Marsalek could be under the protection of a Russian military spy unit.
