How Wirecard Bank helped the group with balance sheet fraud

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Wirecard Bank is not much bigger than a medium-sized savings bank. However, according to research by Capital and “Stern”, the small corporate bank played an important role in the billions in balance sheet fraud, which the now bankrupt payment service provider Wirecard committed over the years. As a result, the financial regulator Bafin, under whose control the Wirecard Bank was, comes under pressure again. The finance minister Olaf Scholz (SPD) subordinate authority has to ask the question, why you did not notice dubious lending at the bank earlier.

The doubts about Bafin’s vigilance are fueled by a report by the Wirecard Bank internal auditing department on September 28, 2020, as well as by a corresponding report from the Frankfurt office of the law firm Gibson Dunn. Capital and “Stern” could now see these classified papers. Accordingly, since 2015, the bank had repeatedly issued loans to companies whose creditworthiness had not been adequately checked in a so-called strategic loan portfolio – again and again at the request of the now volatile Wirecard board member Jan Marsalek, who formally played no role at all for the bank subsidiary.

Allegedly, the strategic loans were supposed to support a number of Wirecard’s business partners – and thus also generate future business for the Wirecard Group. In fact, there were suspicious cash flows.

“Large-scale credit fraud”

“Our investigations have revealed a large number of indications that point to targeted fraud and thus large-scale (credit) fraud to the detriment of Wirecard Bank,” wrote Gibson Dunn on September 25th. The “creeping up of the loan” probably also took place in order to be able to “simulate sales and earnings at the Wirecard Group” that were not in fact or not at this level. It is recommended to file a criminal complaint against those responsible.

The Wirecard Bank was therefore abused to pimp up the parent company’s balance sheet. This involves loans totaling at least 70 million euros. In view of the manageable size of the bank, this is a considerable sum. Unlike the parent company Wirecard AG, the financial institution was undisputedly under the supervision of Bafin.

On request, the financial supervisory authority stated that the Wirecard Bank had been “properly supervised and also audited with the knowledge of the time”. A Bafin spokesman did not want to comment on specific points of criticism in the audit report, referring to the authority’s duty of confidentiality.

“Stern” and Capital had already repeatedly reported on the peculiarities of one of the customers from the “strategic loan portfolio” in particular – a loan of 6 million euros to the Luxembourg company Aviatec, which was transferred to the St. Vincent’s islands in the Caribbean apparently belonged to two Russians. After starting his career as a bartender, one of them is said to have helped the Putin-loyal governor of the Russian Ulyanovsk region in financial matters. In the case of the other, named Leonid A., the in-house Wirecard money laundering fighter noticed that he was on sanction lists with regard to “financial crime” – apparently because of a crime in connection with ATMs.

Exclusive

The strange loans from the Wirecard bank

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For years, Wirecard used its own bank for million dollar loans to ominous business partners – often conducted by ex-board member Jan Marsalek. A company in which Berlusconi’s children are involved – and a Bundesliga soccer team – also received loans

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But Marsalek successfully swept away the concerns within his own group: “This is someone completely different,” he wrote in an email on December 21, 2015. Leonid A. “doesn’t have to steal ATMs anymore …”. ATM is the abbreviation for Automated Teller Machine.

Marsalek prevailed with it. At the end of 2019, however, it was already clear that the millions for Aviatec were gone and the Russians were over and over Wirecard AG also had to stand up for other loans to companies in Asia with names like Senjo Group or OCAP, where the ownership structure led to the direct vicinity of Marsalek: The parent company had signed guarantees for many of the strategic loans of its bank subsidiary.

Significant deficits in the bank

Today the internal auditing department of the bank says that there are “significant indications of criminal offenses” to the detriment of the credit institution by Marsalek and people close to him. Gibson Dunn noted that while there was no evidence that bank employees were “involved in illegal group-level activities.” However, the law firm identified “errors” and “weaknesses” in the loan approval process by bank employees. At the institute, there were “a considerable number of errors, inaccuracies and implausibilities” in the documentation. And they listened too much to Marsalek, who is now 40 years old.

In the event of problems with interest or repayment, the Wirecard manager from Austria regularly used “very similar sounding” notes for the respective borrower. Because these interventions “came from ‘above'”, they were “not adequately questioned,” write the lawyers.

In connection with one of the companies, a close colleague of Marsalek even declared the company headquarters in the tax haven Mauritius “analogously” by saying “that Mauritius had been chosen in order to make it more difficult to identify the beneficial owner”. So she consciously confessed to concealing payment flows. This astonishing statement was “without effect”, the law firm Gibson Dunn was surprised in its report for the board of directors of the bank.

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