Wirecard fraud started in 2010, former executive says
Wirecard’s fraud started more than a decade before the German payments company imploded, as some senior managers began establishing a network of offshore companies that were used to siphon off millions, a former top executive has told prosecutors.
Oliver Bellenhaus has informed Munich prosecutors that,
starting in 2010, he created an array of shell companies based in Hong Kong and
the British Virgin Islands, according to people with knowledge of the matter.
He said he did so at the behest of Jan Marsalek, Wirecard’s
former chief operating officer, who is now on Interpol’s most wanted list, the
people added.
Mr Bellenhaus has told prosecutors that from 2011, he and Mr
Marsalek shifted corporate funds out of Wirecard and into bank accounts in the
name of the shell companies, the people said. Some years later, Mr Bellenhaus
moved millions of these funds to a private foundation, they added.
A sports-car enthusiast, Mr Bellenhaus ran a Wirecard unit
at the heart of the company’s fraud from his apartment in Dubai’s Burj Khalifa.
He was arrested in July on suspicion of aggravated fraud and has been in
custody since.
Non-existent cash
Wirecard collapsed into insolvency last June after it
emerged that €1.9 billion of corporate cash did not exist. Large parts of its
outsourced activities in Asia, where the group said it relied on third-party
business partners and which on paper generated €1billion in annual revenue,
were exposed as a sham.
The account apparently given by Mr Bellenhaus puts the
beginning of the fraud five years earlier than prosecutors had suggested last
summer. Since his arrest, Mr Bellenhaus has become a chief witness for
prosecutors and is co-operating with them.
The demise of Wirecard, once acclaimed as a rare German tech
success, has rocked the country’s political and financial establishment.
According to people familiar with the matter, Bellenhaus
informed prosecutors that in 2014 he created another shell company, again at
the instruction of Mr Marsalek.
Based in the British Virgin Islands, the entity was
incorporated under the name of Al Alam Solution, almost identical to the name
of a Dubai-based business partner of Wirecard that was central to the fraud.
In late 2015, Mr Marsalek redirected more than €4.5 million
to the BVI-based entity from a real payments processor Wirecard worked with in
Asia. According to the account given by Mr Bellenhaus, Mr Marsalek had
earmarked the funds for potential transfer to Wirecard in a plan to give the
appearance to audit firm EY that they were coming from the Dubai-based business
partner of a similar name.
But the money was never used for that purpose. Instead, when
Mr Bellenhaus demanded a significant pay rise, Mr Marsalek suggested that he
should keep the money from the shell company, according to his account to
prosecutors.
Mr Bellenhaus subsequently set up a private foundation in
Liechtenstein to where the funds were transferred, according to people familiar
with the matter.
The existence of the foundation and its cash was disclosed
by Mr Bellenhaus to prosecutors late last year, after investigators had
stumbled upon the foundation, the people said.
Criminal racket
Munich prosecutors have used testimony from Mr Bellenhaus to
build a prosecution case more widely. They accuse Wirecard’s former chief
executive Markus Braun of being the linchpin of a criminal racket that
allegedly inflated Wirecard’s revenue in an attempt to deceive investors. Mr
Braun denies any wrongdoing.
The former chief executive officer, who also was Wirecard’s
single largest shareholder, last summer said the company had been the target of
“fraud of considerable proportions”. In November, he told MPs that he hoped
prosecutors would succeed in tracing the missing money.
In response to questions from the Financial Times about the
account from Mr Bellenhaus, a lawyer for Mr Braun said the former chief
executive officer “did not have knowledge about corporate shadow structures, no
matter how they might have looked like. Hence he did not benefit from them.”
The same applied for potential embezzlement of funds through
such structures. “The public prosecutors will have to thoroughly investigate
the whereabouts of the funds from shareholders and investors.”
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