Wirecard employees removed millions in cash using shopping bags

Prosecutors suspect funds linked to hidden payments operations in Asia

Wirecard went bust last summer in one of Germany’s biggest accounting frauds. Photograph: iStock

Wirecard went bust last summer in one of Germany’s biggest accounting frauds. Photograph: iStock

 

Wirecard employees hauled millions of euros of cash out of the group’s Munich headquarters in plastic bags over a period of years, according to former employees, suggesting that the payments company was looted even more brazenly than previously known.

The once high-flying fintech, which at its peak was worth €24 billion, went bust last summer in one of Germany’s biggest accounting frauds. It collapsed after discovering that €1.9 billion of corporate cash did not exist and that parts of its business in Asia were a sham.

Former employees have told Munich police investigating the fraud that staff repeatedly removed large amounts of cash from Wirecard’s head office, people with direct knowledge of the matter told the Financial Times.

The practice started as early as 2012, and six-digit amounts of banknotes were often moved in Aldi and Lidl plastic bags, former employees told the police. The total amount, the current whereabouts of the cash and the purpose of removing it from the building are unclear.

Wirecard, whose main business was processing payments for merchants, owned its own bank but did not have branches. As demand for cash grew over time, Wirecard Bank bought a safe which was located in the group’s headquarters in a Munich suburb.

At one point in May 2017, €500,000 in cash was delivered at a time when the safe was full, according to emails seen by the Financial Times and a person with knowledge of the transaction. Some of the cash needed to be hidden elsewhere in the offices.

“From an insurance point of view, that’s crap,” a Wirecard employee wrote in an internal email seen by the Financial Times, urging that delivery and collection of cash needed to be organised on the same day.

An employee, who worked at the headquarters for almost two years until 2018, told police that amounts of €200,000-€700,000 were removed frequently, sometimes several times per week, according to people familiar with the investigation.

More than €100m

That suggests more than €100 million could have been removed. However, bank records that were seized by police only document cash withdrawals of around €6 million, these people added.

At least some of the cash was recorded as withdrawn by clients of Wirecard Bank, among them suspicious business partners like Philippines-based payments company PayEasy, which prosecutors allege is one of the entities at the core of the fraud.

The former employees told police that many of the withdrawals were made by an assistant to a senior Wirecard manager, who was in charge of a Dubai-based subsidiary. She brought the plastic bags containing the cash to Munich’s airport on at least some of the occasions, where she handed them over to unknown individuals, according to the people familiar with the former employees’ testimony to police.

In one instance, a six-figure sum was allegedly destined for Manila-based Christopher Bauer, a former Wirecard employee who was in charge of PayEasy, which generated hundreds of millions of euros of fake Wirecard revenue. Mr Bauer was reported dead shortly after Wirecard’s collapse.

The senior Wirecard manager, who told prosecutors that he transferred €4.5 million of Wirecard funds to a hidden personal foundation in Liechtenstein, is also facing questions over up to €15 million that was transferred from accounts at Wirecard Bank to accounts in the Caribbean island of Antigua, an offshore tax haven.

The accounts from which the €15 million was withdrawn were held in the name of companies in Antigua and opened by citizens of Costa Rica, Antigua and the Philippines, according to documents seen by the Financial Times. One of the account holders is also mentioned in the Panama Papers as the owner of a British Virgin Islands-based shell company.

The senior Wirecard manager oversaw the opening of the dubious accounts at Wirecard Bank, some of which were created only a few months before the group’s collapse in 2020. After his arrest last summer, the compliance team found in his safe the PIN numbers needed to control the accounts, according to documents seen by the Financial Times.

Antigua

The origin of the €15 million that was moved to Antigua as well as the cash that was withdrawn is unclear. A person familiar with the investigation said documents suggest the money could have been generated by Wirecard in Asia before being siphoned off.

Munich police have arrested several former senior Wirecard managers including ex-chief executive Markus Braun. Public prosecutors accuse Mr Braun of being the mastermind of a “criminal racket” that is responsible for “fraud in the billions”. The testimony of the former Dubai-based manager is key evidence.

Mr Braun denies any wrongdoing. A lawyer for him also told the Financial Times that he was not aware of large cash withdrawals by clients of Wirecard Bank and the dubious bank accounts.

Munich prosecutors declined to comment. – Copyright The Financial Times Limited 2021