The process of the most spectacular fraud in German economic history begins on Thursday: It’s about the Wirecard bankruptcy. The main accused is former CEO Markus Braun. On the other hand, one of the main masterminds of the scandal, Jan Marsalek, probably lives comfortably in Russia.

With Wirecard, he wanted nothing less than to reinvent the payment system – Markus Braun, now 53, married, registered as living in Vienna, on record as an entrepreneur, billionaire and whizz kid of money in cyberspace at least since the dot-com euphoria shortly before the turn of the millennium. The Austrian ended his career in 2020 and went from the executive chair of his company “Wirecard” almost directly to prison, to the Augsburg-Gablingen prison, to remand.

Now the trial against him and other defendants for commercial gang fraud, balance sheet fraud, market manipulation and breach of trust begins before the 4th major criminal division of the Munich I Regional Court. 100 days of negotiations up to 2024 have already been scheduled.

Jan Marsalek, 43-year-old bon vivant and probably one of the biggest white-collar criminals in the history of the Federal Republic because of his Wirecard connections, will not be in court in Munich. Although Interpol is searching for him worldwide and the media even report the name of the street where he is said to live, the judiciary still has no access to him. This is also due to the secret service contacts that he boasted about back in the Wirecard days, and the criminal contacts that he built up.

The explanation of how these obviously questionable characters deceived authorities and investors for decades begins with Braun’s start at Wirecard. So many thought he was a savior.

The “Wirecard story”, once told as a story of the rise of a German high-tech company from a 40-employee clan to the world league of international payment transactions, ends as a fraudulent drama with countless victims, a board member wanted worldwide by a manhunt – and one bitter loss of reputation for the Federal Republic of Germany and its capital market institutions.

Above all, BaFin, the Federal Agency for Financial Services Supervision, which has completely lost its credibility in the course of the Wirecard revelations, especially abroad. Last but not least, the auditing company EY (formerly Ernst

In 2000, Braun, who had just completed his doctorate in business informatics, came to Wirecard, a company that was founded in 1999 by the Internet-savvy founders Detlev Hoppenrath and Peter Herzog. From the start, Wirecard concentrated on processing online payment transactions and saw itself as a trustworthy interface between provider and customer. Self-promotion: “Prevent fraud and embezzlement”.

Even then, the company engaged Jan Marsalek. Compatriot Markus Brauns just failed with a project worth millions and brought Wirecard to the brink of ruin. This is how Braun got into business: The young academic, who was working as a consultant at KPMG at the time, was sent to the rescue – and shortly thereafter appointed a board member responsible for technology. In 2001, Wirecard was on the brink of collapse and filed for bankruptcy for the first time because a takeover by porn site operator EBS failed.

Shortly before, Marsalek’s and Braun’s computers disappeared under mysterious circumstances during an unsolved break-in into the business premises. The suspicion that both of them had fabricated the theft so that EBS could take over the company cheaply and boot out the founder led to investigations by the public prosecutor’s office, which, however, remained fruitless.

Markus Braun became CEO and Wirecard took a detour to get to the stock market, namely by taking over the rather unsuccessful “InfoGenie AG”, which was listed on the notorious “Neuer Markt” of the Frankfurt Stock Exchange as an operator of fee-based telephone hotlines and had degenerated into a penny stock. After InfoGenie was renamed Wirecard AG, the company found itself back on the stock exchange – and Markus Braun concentrated on new business areas on the one hand and on washing Wirecard’s reputation, which was very closely linked to online gambling and Internet porn, on the other .

In the eyes of investors and the general public, this was successful: Braun mostly made himself rare for interviews, when he appeared he presented the technically adept visionary who, with hints of slight megalomania, wanted to give the world an unprecedented internet payment system, as he compared to the author pointed out in an interview in 2018 – and had already shown us prototypes of future payment terminals.

There was a strange contrast between Braun’s reserved, almost awkward demeanor and his far-reaching plans – once, completely unperturbed, he named wanting to take over Deutsche Bank as his goal. In fact, however, Markus Braun worked for the bank on the advisory board and advised the largest German financial institution on future payment transactions. Since the largest and largest names have also come to Wirecard as investors over the years, including the Japanese software investment company Softbank, the Wirecard share price has rushed from record to record.

Porn and gambling were no longer talked about, the image change had succeeded. Since there was hardly any money to be made with these early offers on the Internet anyway, and fee-based “dialers” of today’s network generation must appear as a prehistoric phenomenon, the cutting off of the umbilical cord was a dazzling success. Braun’s “baby” Wirecard expanded into Europe and Asia, where the source of the allegations of fraud would later be found. Wirecard then also had its own banking license – and was no longer dependent on governors for financial transactions, as was the case with Citibank, for example.

As early as 2008, however, there were allegations that Wirecard’s figures were not correct. Markus Braun introduced himself to the company and defended its truly unbelievable growth – 30 percent a year was not unusual – Tenor: The increase in international payment transactions, which in fractions of a second drives Braun’s sales as an intermediary, is a source of prosperity. This calmed the markets down again, at least for the time being.

From then on, however, Wirecard was under observation – and the phalanx of his opponents grew. Particularly in view: Wirecard’s so-called third-party partners, who manage “trust accounts” in the Arab-Asian region in order to enable Wirecard to do business there, where the German company itself did not have a license. This alleged trustee system was managed by the board and Braun confidant Jan Marsalek, which seems to make him one of the main originators of the Wirecard scandal.

In the end, years of research by Financial Times editor Dan McCrum and an investigative team from the newspaper Wirecard, brought down Marsalek and Braun. McCrum, who has meanwhile written a book about his investigative work, initially revealed Wirecard’s actions in Singapore and the Philippines, reminiscent of a pyramid scheme, where 1.9 billion euros are said to exist – the accounts mentioned in the Wirecard balance sheets existed but mostly not, sometimes not even the banks mentioned. When the Financial Times researchers visited numerous contact addresses, some bus companies and some private individuals were found.

Also involved in the educational work: hedge funds and short sellers from the USA and Great Britain. They were initially the most dangerous opponents for Markus Braun and Jan Marsalek, because they had immense funds for balance sheet analysis and plenty of travel expenses, and then invested millions to bet on a falling Wirecard share price. These investors are traditionally unpopular in the financial world, but ideally serve to uncover fraud and failure.

When these short sellers, such as the well-known and feared Briton Fraser Perring, finally caused the share price to tumble, the financial supervisory authority BaFin did not react by investigating the allegations, but simply banned the short sale of Wirecard shares. A glaring mistake, according to the former editor-in-chief of the Financial Times: “Not once did the financial regulator contact us and ask for information,” said Lionel Barber. The Bafin apparently believed Wirecard blindly.

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Things are now looking bleak for German investors. Markus Braun’s assets are seized, the insolvency administrator cannot give the shareholders any hope. The law firm Tilp Rechtsanwälte, which represents numerous injured parties, is trying to sue a wide variety of addressees – some simply for looking the other way. “What amazes us is how this system of denial and cover-up has been able to work for so long,” says attorney Marvin Kewe.

The Protection Association of Investors (SdK) is also organizing lawsuits and is primarily targeting the auditors from EY, who for years provided Wirecard’s obviously fake balance sheets with their attestation: Everything is fine, that said.

While Markus Braun was still publicly dreaming of Wirecard as the largest DAX company that he wanted to manage one day, mysterious things were happening in the background – journalists were being spied on, such as the Financial Times editors, whose e-mail system was also broken into; Hedge fund managers found themselves shadowed and followed at every turn. It remains uncertain whether the process that is beginning can uncover Braun’s involvement in such machinations. In case of doubt, the fugitive Marsalek, who always boasted about his secret service connections and revealed himself as an agent, is the best address for dumping the blame.

The fact that Marsalek is actually one of the main masterminds seems to be confirmed by his disappearance one day after the Wirecard collapse. In June 2020, that much is certain, he initially flew to Belarus by private plane. According to several media reports, he is now said to be living in the posh Moscow suburb of Razdory, a good ten kilometers from Vladimir Putin’s private palace Nowo Ogaryovo and with security guarantees from the Russian secret service. Even the street where Marsalek is said to live is known: it is called Beregovaya.

In the midst of oligarchs, top military officers and celebrities, Marsalek should be able to keep up financially: he is said to have funneled hundreds of millions of euros from Wirecard to his own accounts, reports the Handelsblatt. Former Wirecard investors are still paying the man who ruined them a comfortable life in the elite district, which is secured with barriers.

Marsalek will probably never come back to Germany voluntarily and face up to his responsibility. Extradition requests from the authorities have so far petered out and, in view of the political tensions, are likely to continue to peter out in the foreseeable future.

Markus Braun, who always maintained good contacts with Viennese politics and was courted by German politicians at times and until shortly before the end, therefore sees himself pretty much alone in court, regardless of his two co-defendants. A key witness is also still there; the whistleblower could strongly influence the process. Although probably not accelerated: The inconsistencies from twenty years await clarification, and probably for a long time, some if not forever. “Wirecard deceived most people, all the time,” said the British magazine “Economist” in its preliminary conclusion.

The article “In Putin’s neighborhood the trail of Wirecard boss Marsalek is lost” comes from WirtschaftsKurier.