Three Former Top Wirecard Execs Arrested In Alleged Fraud Scheme
Three former top executives of Wirecard AG were arrested
Wednesday (July 22) as prosecutors allege they were part of a criminal
enterprise to steal billions from creditors based on fake accounts, Reuters
reported.
The ex-executives are suspected of conspiring to inflate
revenues by creating faux business with third-party acquiring partners, Anne
Leiding, spokeswoman for the Munich State Prosecutor’s Office, told reporters.
The alleged actions created a false impression of financial
strength for the German payments company and enabled it to borrow €3.2 billion
($3.7 billion).
The billions borrowed are “in all probability lost” due to
Wirecard’s insolvency, Leiding said.
“In reality it was clear, at the latest by the end of 2015,
that Wirecard’s real business was losing money,” Leiding told reporters in
Munich.
Once worth $28 billion, Wirecard collapsed last month after
an audit by Ernst & Young revealed two missing deposits in Philippines
banks totaling more than $2 billion.
Today, the insolvent company has a stock market value of
€220 million ($255 million), the news service reported.
Last month, former CEO Markus Braun was arrested as the
scandal unfolded on an accounting scandal that centers on a missing €1.9
billion ($2.1 billion) in deposits. He was charged with accounting fraud and
market manipulation.
Braun has now been re-arrested; also arrested were
Wirecard’s former chief financial officer and chief accounting officer. The
arrests were made based on testimony from a cooperating witness, the
prosecutor’s office said.
An investigative team is probing Braun and his unnamed
suspected accomplices for organized commercial criminal fraud, breach of trust,
false accounting and market manipulation, Reuters reported.
On Tuesday (July 21), Wirecard hired a forensic team to
investigate the accounting scandal that led to its insolvency.
Earlier this month, one of the unnamed executives in the
Wirecard scandal reportedly admitted guilt to the multi-billion-dollar fraud
and money laundering case. The executive was the CEO of CardSystems Middle
East, the largest unit under Wirecard’s command.
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