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Dan McCrum uncovered the Wirecard scandal: "I had a hammer under the bed"

2022-05-30T15:26:34.794Z


Dan McCrum uncovered the Wirecard scandal: "I had a hammer under the bed" Created: 05/30/2022Updated: 05/30/2022, 17:17 By: Andreas Hoess The Wirecard fraud case seems like a bad crime thriller. The former Dax group is said to have invented sales. Jan Marsalek, who was responsible for operational business and is said to have secret service contacts, has gone into hiding. © Frank Hoermann/SVEN S


Dan McCrum uncovered the Wirecard scandal: "I had a hammer under the bed"

Created: 05/30/2022Updated: 05/30/2022, 17:17

By: Andreas Hoess

The Wirecard fraud case seems like a bad crime thriller.

The former Dax group is said to have invented sales.

Jan Marsalek, who was responsible for operational business and is said to have secret service contacts, has gone into hiding.

© Frank Hoermann/SVEN SIMON

Dan McCrum uncovered the fraud scandal at Wirecard.

Here he tells the crazy story about the biggest economic fraud in Germany.

Munich/Abu Dhabi – Without Dan McCrum, Wirecard might still be the darling of German investors.

His book "House of Wirecard: How I uncovered Germany's biggest economic fraud and brought down a DAX company" (Econ, 25 euros) will be published today.

We reached the journalist from the Financial Times in Abu Dhabi (United Arab Emirates), where he was a speaker at a congress against white-collar crime.

In an interview with our newspaper, the Brit tells how he revealed the fraudulent core of the company, why the German authorities slept for so long - and why he temporarily had a hammer under the bed.

Dan, you exposed the Wirecard scandal.

Would you have started researching if you had known what to expect?

If I had known there were hackers and spies lurking in the background, I might not have done it.

On the other hand, journalists are drawn to strange stories.

And Wirecard is a completely crazy story.

So in the end I had no other choice.

Investigative journalist Dan McCrum © Kay Nietfeld

Wirecard changed your life too, right?

My opponents made life difficult for us with many dirty tricks.

At times I even had a hammer under my bed.

It may sound strange, but when you're professionally hacked, bugged, and monitored, it's easy to develop paranoia.

Then dark scenarios run through your mind at night: what happens when men in black break into your house?

That's when the worst things happen.

I'm glad I never used the hammer except to hang up pictures.

You just wrote a book about it all.

Nobody knows Wirecard as well as you.

Very briefly: what exactly was Wirecard?

Wirecard was a payment processor that wanted to be Europe's PayPal.

Basically, it's a simple business.

But Wirecard acted as if it were incredibly complex.

I think that was on purpose.

The perceived complexity was part of the scam.

She hid him.

In the face of all allegations, Wirecard was able to claim that the business model was not understood.

But at its core, Wirecard was just a corporation that helped companies accept payments.

And who liked to throw stardust in people's eyes by claiming to be a great tech company.

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Wirecard came from the sleazy corner...

In the beginning, it operated on the fringes of legality, processing many payments for porn and online gambling.

A great deal!

Wirecard made a lot of money, went public and grew quickly.

But around 2009 it got to the point where the profitable business really wasn't there anymore.

Why?

The economic conditions for online porn were changing.

Gambling was gradually banned, especially in the US.

I think Jan Marsalek, who was responsible for the operational business, and Wirecard boss Markus Braun tried to keep the numbers high at this point.

They wanted to give the impression that Wirecard continued to grow rapidly and was very profitable.

How exactly?

There is evidence that Wirecard started inventing sales and profits from 2010 onwards.

First it was improvised.

Wirecard went to Asia and bought many small companies.

This helped cook up the books and funnel money out of the company.

Later, the deception ran through three partner companies, actually empty shells run by friends.

Wirecard claimed that they processed all payments and paid Wirecard a commission as a thank you.

Amazing that they were able to smuggle that past auditors for many years.

How could you prove all this?

Especially with informants and documents.

The biggest day of my research was when I was copying Pav Gill's hard drive under the table in a restaurant in a shopping mall in Singapore.

It took so long for us to order food.

Gill was Wirecard's legal counsel and had evidence of souped-up balance sheets and inflated goodwill in Asia.

There were also tons of emails and chats.

When Gill encountered inconsistencies, he reported them to his bosses at Wirecard.

Instead of investigating the allegations, they pushed him out of the company.

That's why he unpacked.

You have reported extensively on the scandal in Asia.

At first nobody believed you.

Why?

When I used to work as an analyst, it was: No sell recommendations!

No one likes to be told they're wrong - especially when it comes to stocks.

Wirecard has made people rich for a long time.

That's probably why many of them thought they were very, very clever.

I, on the other hand, was the spoilsport from the start.

How many angry letters have you received from German investors?

A lot.

One guy even suggested I duel Markus Braun.

What a wonderfully antiquated performance: Me and Markus Braun with swords at dawn!

Should the alarm bells have gone off earlier at banks and authorities?

Apparently, like investors, they've been counting on someone else to check to see if there's really something fishy going on.

Since no one did that in the end, everyone assumed that things would be okay.

Is that why Wirecard has survived for so long?

The thing about cheating is: it takes a lot of trust in society to make it work.

That's why Wirecard was possible in Germany.

Trust is often necessary.

If everything is checked, you waste time and resources.

But there is a tiny minority who take advantage of just that.

Should the employees have noticed something?

The higher the position and the longer the seniority, the more this question arises.

I was lucky enough to be able to visit the Wirecard offices after the bankruptcy.

It really looked like a real company doing real things.

I spoke to former employees who were very nice.

I think a lot of people were a little embarrassed about what had happened.

Some felt like kicking themselves in the butt.

They were convinced that they were working for a reputable company.

Only afterwards did these nagging doubts come that some things were strange after all.

Wirecard has done a lot to ensure that you are not believed.

You've been called a corrupt liar in league with people betting on Wirecard going bust.

They always used the same trick: portraying me and the Financial Times as helping obscure short sellers.

My boss at the time once said: These are criminals who are too stupid to change their tactics.

On the other hand, Wirecard has done very well with it for a long time.

At the beginning of 2019, however, they should have changed their minds.

Would they have said, "Okay.

you caught us

Yes, there was a small problem.

We're going to fire these people though,” we might have moved on to the next story.

But Wirecard had made the case a matter of reputation.

They accused me and the Financial Times of being corrupt.

We were left with no choice but to expose them.

Instead of Wirecard, the authorities first investigated you for market manipulation.

Why were your allegations not investigated?

Apparently they didn't want to see criminals behind the suits of the corporate bosses.

Even after Wirecard collapsed, Marsalek was still able to flee to Belarus.

Apparently they were in no real hurry to arrest these people.

After the Wirecard bankruptcy, the financial regulator Bafin was reformed, and her boss at the time had to go.

Is that enough to prevent such cases in the future?

The scandal has been dealt with well.

There were reform proposals, a lot of media attention and a committee of inquiry.

But in addition to stricter rules, Germany also needs a different culture in which fraud is actively pursued and reported.

See: We anonymously sent the authorities a package with all the evidence in January 2019.

Instead of investigating the matter, it was said: "Ah, that must be part of the short attacks against Wirecard!" The supervisory authorities did not find the business practices suspicious, but rather the anonymous but bona fide attempt to uncover the abuses.

I will never understand how they came up with this.

Olaf Scholz was finance minister at the time and was criticized for Wirecard.

He recently gave a eulogy to you.

Was that an apology?

I'm just thinking about what I can't say.

Okay, let me put it this way: I didn't expect any apologies from Scholz.

Fascinating how quickly things change, isn't it?

First I'm the corrupt journalist under investigation, then I get all these awards.

What did Marsalek and Braun get out of the scam?

Markus Braun was the face of the company.

He benefited from the scam because he owned eight percent of the company through shares.

He was very proud of that.

The value of his shares kept rising and he borrowed 150 million euros from Deutsche Bank against the value of these shares.

So he could pay off money.

Marsalek apparently had to come up with other ways to get money.

Hence these company purchases and loans to obscure Wirecard partners.

In your book you write that you wanted to expose Marsalek.

Why he?

I soon realized that Marsalek was the bad guy.

Even the first contact with him was bizarre.

One of my boss's sources, a nightclub owner, said, "I have this guy who wants to talk to you guys, his name is Jan Marsalek." We were puzzled: Why on earth would a corporate CEO want to communicate through a nightclub owner?

It was also revealed that he was behind the hacking, private investigators and corruption allegations against us.

What was he like?

Charming, eloquent, with little interest in details and bad at getting things done.

You'd think he had an elaborate escape plan up his sleeve for a long time.

But even his escape seems improvised – even if it worked.

Marsalek has boasted about secret service contacts.

What is it?

I would like to know that too.

In any case, it was convenient that he went underground.

If Marsalek was the villain: what did Wirecard boss Braun know?

Mmh, hard to believe he had no idea.

I mean: It was about his fortune – and he just trusted Marsalek and didn't ask any questions?

What seems clear is that he ended up ruthlessly betraying people close to him, telling them that everything would be fine - even though he knew it wasn't.

Or maybe I'm wrong and Braun was just a delusional idiot the whole time, thinking everything was fine.

Of course that's also possible, isn't it?

The interview was conducted by Claus Lochbihler & Andreas Höß

Source: merkur

All news articles on 2022-05-30

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