Reported by: Ben Taub

In August, 2018, Wirecard had a market capitalization of twenty-eight billion dollars. The company displaced Commerzbank from the DAX 30, Germany’s most prestigious stock index.

Markus Braun—who owned eight per cent of the company and was now a billionaire, on paper—had taken out a personal loan of a hundred and fifty million euros from Deutsche Bank, using his Wirecard shares as collateral. Marsalek, for his part, appears to have defrauded the company out of tens of millions of euros, if not hundreds of millions, according to a whistle-blower.

Wirecard reportedly had five thousand employees and was processing payments for a quarter of a million merchants, including major airlines and grocery chains. Braun told investors that he expected sales and profits to double in the next two years. At tech conferences, where he was lauded as a “Steve Jobs of the Alps,” as one German journalist later put it, he said that Wirecard’s business edge resulted from its proprietary artificial intelligence. “It’s not about owning data, but it’s about the algorithms that deliver a value out of data,” Braun, who had a background in computer science, said. But there was no A.I.; most Wirecard accounts were cobbled together manually, on spreadsheets. As a bank with no branches, Wirecard kept cash in a safe at the office, and sometimes distributed it to business partners, in sums in the hundreds of thousands of euros, by hiding it in grocery bags.

While Murphy puzzled over Marsalek’s Russian security connections, McCrum had a new investigative thread to follow. Pav Gill, the head lawyer at Wirecard’s Asia division, in Singapore, had quit, taking seventy gigabytes of e-mails with him. As he agonized over what to do with the materials, he learned that his mother had written to McCrum. “Oh, my God, Mum,” Gill said, when he found out. “What have you done?”

Soon afterward, McCrum flew to Singapore to collect the data leak. The two men met near a public fountain, to shield against audio-surveillance equipment. McCrum copied the files and returned to London. For the next six weeks, he worked in a windowless room at the F.T.’s headquarters, trying to trace individual acts of fraud amid hundreds of thousands of e-mails and calendar appointments. “What drove me on was Jan Marsalek,” McCrum later wrote in his book. They had never spoken or met, but McCrum could see in the documents that “he was always at the edges, sometimes dishing out orders but more often his instructions were relayed second-hand, or a mystery would be explained simply by his involvement; that it was one of ‘Jan’s companies.’ ” Each evening, his head spinning with new data, names, and organizational charts, McCrum locked his laptop in a safe before leaving the office.

Earlier that year, a woman on Wirecard’s Asia finance team had nervously approached Gill, to report that her boss, Edo Kurniawan—who answered to Marsalek—had given a presentation in which he taught his staff how to commit serious financial crimes. (Kurniawan has since been charged with financial crimes in Singapore; he is the subject of an Interpol Red Notice, and his whereabouts are unknown.) Using a whiteboard and a marker, Kurniawan sketched out the practice of “round-tripping,” in which an amount of money is moved among several locations, as needed, to fool auditors in different jurisdictions into thinking that each supposedly unrelated account is well funded. (Wirecard’s auditor, Ernst & Young, reportedly relied on documents and screenshots of accounts, supplied by the company, without checking with the constituent banks.)

Gill contacted his supervisor in Munich, who told him to commission an internal investigation—which turned up instances of round-tripping, backdated contracts, and other illegal schemes. But when the findings reached Wirecard’s board, the concerns were quashed. “I think Jan understands very well what it’s about, but they don’t shit in each other’s bed,” Wirecard’s deputy general counsel wrote to Gill, on an encrypted communications app. A few months later, Gill was told that if he didn’t resign he would be fired.

By the morning of January 30, 2019, the story was complete and ready to run in the F.T.McCrum sent off questions to Wirecard, and waited for the company’s response.

Read full report: https://www.newyorker.com/magazine/2023/03/06/how-the-biggest-fraud-in-german-history-unravelled/amp