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Wirecard officials face prison as fraud trial begins in Germany

Written by ABC AUDIO on December 12, 2022

MUNICH, Germany: After a scandal that shook German politics and damaged the country’s business reputation, Markus Braun, Wirecard’s former chief executive, went on trial for fraud in Munich this week.

Austrian born Braun, 53, who has been in custody since his arrest in 2020, and two other managers of the former blue chip company, face charges, including fraud and market manipulation.

If convicted, they could each be sentenced to prison terms of up to 15 years.

Braun has denied embezzling money from Wirecard and accused others of running a shadow operation without his knowledge.

A verdict is not expected before 2024, at the earliest.

Founded in 1999 and based in Aschheim, Munich, Wirecard displaced Commerzbank in Germany’s DAX blue-chip index and was once worth $28 billion.

The scandal placed politicians who backed the company and regulators who took years to investigate it under scrutiny, and embarrassed the German financial establishment.

After denying claims of wrongdoing from investors and journalists, and successfully lobbying German authorities to investigate those who were scrutinizing its finances, in June 2020, Wirecard was forced to admit that $2 billion was missing from its accounts.

The government of then-Chancellor Angela Merkel even considered bailing out the company, but within days it became the first-ever DAX member to file for insolvency, with debts totaling nearly $4 billion.

According to public prosecutor Matthias Buehring, Wirecard’s management created bogus business transactions with so-called partner companies in Dubai, the Philippines and Singapore, enabling them to siphon money out of the company.

Anne Leiding, spokesperson for the prosecutors, said, “All three defendants worked together to make Wirecard appear as an extremely successful FinTech company.”

Prosecutors will draw on evidence from Braun’s co-defendant Oliver Bellenhaus, the former head of Wirecard’s subsidiary in Dubai. Another former executive, Stephan von Erffa, is also on trial.

Wirecard’s former Austrian chief operating officer, Jan Marsalek, is an international fugitive on Europe’s most wanted list.

The head of German financial regulator BaFin and the head of Germany’s accounting watchdog resigned after the scandal came became public.

Merkel and her then-finance minister, and now chancellor, Olaf Scholz also faced criticism for lack of oversight of the company

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Wirecard officials face prison as fraud trial begins in Germany

Written by ABC AUDIO on December 12, 2022

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Wirecard officials face prison as fraud trial begins in Germany

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