Skandal! Bringing Down Wirecard (2022) Movie Script
In Autumn 2019,
I got a call from a source.
He asks me,
"Have you ever looked into Wirecard?"
"The payment processor? No."
"It's a very strange company."
"Companies are being set up."
"Money comes in, money goes out."
That is totally spooky.
He'd been called by foreign friends
who used to work in intelligence agencies,
and they warned him,
"Are you interested in Wirecard?"
"Keep your hands off it."
Scandal involving a German
digital payments company, Wirecard.
Mr. Braun, reports about your business
read like a financial thriller.
How do you
simply miss a couple of billion dollars?
Bogus sales,
balance sheet manipulations,
many allegations.
How bad is it going to get?
Money laundering, gambling, porn,
helping terrorist organizations.
It was
the Financial Times versus Wirecard.
They were trying to find information,
and then Wirecard were trying
to find information back.
It was a total deepfake.
It looked like a bank,
but it was actually a robbery.
The former COO,
Jan Marsalek, is on the run.
The biggest fraud scandal
in German history.
There's
an international manhunt for Jan Marsalek.
It's unbelievable how something
like this can survive for so long.
It was clear to me
this was going to be a huge story.
Scammers take advantage
of people's desires.
In Germany, the desire was,
"We want to be at the front of the pack."
Germany's industry is extremely successful
but very old, very traditional.
These famous German brands
like Siemens, Daimler, BMW, Volkswagen,
these are all very old companies.
That's why German politicians
and German business people
are often asked,
"Where are actually your new companies?"
We want a major, global,
digital champion of our own
like in Silicon Valley.
The German Google, the German Facebook.
And Wirecard played
on that desire beautifully.
Discover Wirecard.
We develop financial technologies
that make payments mobile, seamless,
and almost invisible.
Partner up with Wirecard,
the world's leading innovation driver
in digital financial technology.
He's a hero, a rock star.
Please give a very warm welcome
to the CEO and CTO of Wirecard,
Dr. Markus Braun.
Good morning, ladies and gentlemen.
Wirecard was like the German PayPal.
And in one sentence,
that's our business model.
Wirecard the processor
for online trade, online shops.
They make sure when I buy something,
the money gets from my credit card
to the online retailer.
It's not about owning data,
but it's about the algorithms
that deliver a value out of data.
There's a company founder dressed
in a black turtleneck
with a neat turn of phrase...
The business model delivers a value-add,
and where there is a value-add,
you have the money to reinvent.
...who presents himself as a visionary.
The "Steve Jobs of the Alps."
My name is Martin Osterloh.
I worked for Wirecard for 16 years.
When I joined in 2005,
we were about 130, 150 people.
When I left Wirecard,
there were over 6,500 individuals.
Wirecard is one of
the fastest-growing
financial commerce platforms.
When at Wirecard,
there was an extremely proud sense
of being a big German technology company.
Wirecard jumped
on the digital train in the '90s
that continues to pick up speed,
and now Wirecard
has even overtaken Deutsche Bank
with their worth placed
at over 20 billion.
A symbol
for the new era of the finance sector.
This was a company on the rise.
It grew unlike any other company
we'd seen in Germany.
And that rise, that immense growth,
led many people to believe in it.
New, successful,
global, profitable
and German politicians were proud
to be able to say,
"Hey. We have a FinTech company!"
When the chancellor went to China,
she actually campaigned
for Wirecard in 2019 with Xi Jinping.
Everyone in Germany
believed in this company.
No one would have believed
that this was the work of gangsters.
Being a journalist,
you get to do all sorts of things
which you're not supposed to.
You're exposing secrets.
The first time
I ever heard the word Wirecard,
I was looking for dodgy companies
to write about.
Corporate frauds, things like that,
because they make great stories.
I was chatting
to this Australian hedge-fund manager.
He's like, "So would you be interested
in some German gangsters?"
I think he looked to the accounts
and thought it was a fraud.
So I made a note,
"Wirecard, something to look into."
From the outside,
it looked like a legitimate enterprise.
I mean, it had 6,000 people.
It had offices.
The profits were great.
And so I think
it just sort of fitted into this,
"Online payments.
That's growing quickly, isn't it?"
But this big pile of documents,
which showed all these deals
Wirecard had done in Asia,
and something about them
just seemed a bit off,
that they didn't quite seem real.
Outside of Europe,
we see a growth of 25%
strongly driven by new regions,
by developing regions of Asia.
Wirecard didn't appear
to grow by adding customers,
like Spotify might add subscribers.
It was buying its growth
by buying businesses, mostly in Asia.
But, basically, the numbers don't add up.
I tried to talk to Wirecard.
They were like, "We're very busy dealing
with our results. We can't talk to you."
Normal companies don't do that
when Financial Times knocks on the door.
So, I persisted.
Eventually, they put Markus Braun
on the phone.
"We are a software company
which has a bank as a daughter."
There were many weird things
about that conversation.
Wirecard always had the same playbook
each time it was criticized.
It would say that the critics
were in league with short sellers
seeking to manipulate the share price.
My name is Tobias Bosler,
and I have been,
for many years, a short seller.
Most people invest
thinking a share price will rise.
A short seller differs from an investor
by making money when a share price falls
and loses money when it increases.
The narrative
that's given around short sellers
is that they're there to just drive
the share prices down on companies
to seek a profit.
Certain areas of the investment community
would probably view short sellers
as loosely affiliated
with some sort of financial terrorist.
Now, the reality of the situation
is that most short sellers
would take a short position
because they think fundamentally
a stock is overvalued.
We are short sellers.
In fact, we're the only "short only,
woman only" fund out there in the world.
We exclusively make money
by betting against stocks,
betting that the prices
of those stocks will fall.
And we gain our conviction
around these bets
by doing a lot of deep investigative work
to make sure that we're right.
I mean, it's a lot like being
a financial detective.
I mean, what we look at are companies
that we think are generally up to no good.
I investigated Wirecard for two years.
I understood its business model perfectly.
It handled payments for online businesses
in pornography and online gambling,
but it wasn't illegal.
It was certainly
a big part of what we did,
and it made the company very strong
at the beginning.
Everything from poker companies,
casinos, bingo,
certainly also pornography.
But we didn't call them porn.
What would you call them?
Emotional content.
- Are you joking?
- I'm not joking.
The poker market in the US
was 50% of the global poker market.
But that all changed in 2006
when a new law in America made it illegal
to handle payments
for US citizens playing poker.
So Wirecard lost a major source of income.
But, in spite of this law,
the profits of Wirecard kept rising.
What company is able to do that?
This can't be right.
We're trying to write
the story, but it was complicated.
I'd go backwards and forwards
and basically got nothing.
At that point, I'd given up
because nobody seemed interested
in the Wirecard story.
And then I get this phone call.
So I went to meet this guy, Matt Earl.
I think he rang me up and said,
"Hey. Do you wanna go meet for lunch?"
He was a short seller.
And also he wrote blogs about frauds.
This thing called Zatarra.
The first time
I became aware of Wirecard
was when a reader of the blog that I wrote
reached out to me to say,
"Have you looked at this German payments
business, Wirecard?"
There was allegations
that Wirecard had been involved
in a money-laundering operation
in Florida.
There was press reports
that they had been processing
unlawful gambling-related monies
into the United States.
That was illegal.
So I thought, "Let's have a look at this."
The meeting was
in a Japanese restaurant in the city.
And so we sort of sit down,
you know, order, and it's like,
"Okay. What's going on?"
And Matt sort of slides under the table,
I think it was a Tesco carrier bag full,
this big sheaf of documents
about that thick.
And then he explained
this is the Zatarra report.
This is what he's been working on.
There's 120 pages of this stuff.
And the core of the Zatarra allegation
was everyone thinks Wirecard is this
big payment processor doing legit things,
and actually the heart of its business
is laundering money for criminals.
Money laundering is taking the proceeds
of crime and cleaning the money.
If you rob a bank
and have a big bag full of cash,
you might launder the money by making
it look like you earned the money.
And Wirecard was doing this
for various online businesses,
but the principle is the same.
What Wirecard would do
is if it was contentious,
say like gambling or porn,
miscode the transaction as something else.
Instead of putting a payment
as gambling, it might go,
"Actually, this is a florist."
Wirecard could get away with it
by taking advantage of various
little weaknesses in the system.
All the transactions would come
into the United States
via a UK company called Bluetool,
based in Consett, County Durham.
Consett is this little,
depressed ex-mining town up on the moors.
Now, you'd think that a company
that is sending hundreds of millions
of dollars over to the US
would have a significant office presence.
This was someone's house.
That seems sort of odd.
It is exactly like Ozark.
It's an out-of-the-way place
where they could launder
huge amounts of money.
We were approached
by somebody from up the street
from where we used to live.
And they asked if we just wanted
to have some free money.
They said all you had to do
was to sign your name,
and when you signed your name,
you got 50 quid.
The people who were listed
as the directors of these companies
had no idea about them.
But really, that company would be a shell
to hide the real owner,
which was, you know, a gambling website.
I mean, all you were told at the time
was that you would get letters
and all you had to do was post them back,
and that's all we've ever had to do.
So you've got a German bank
moving money through the north of England
in this remote, little town
for all these dodgy businesses elsewhere
in the world.
We're talking about maybe
billions of dollars hidden in the shadows.
And it just happened to be this little,
red-brick town in the north of England
was the perfect channel
to make it look legit.
They had literally set up
the whole infrastructure
to permit laundering of money
to take place.
So in my mind,
that rendered Wirecard worthless
because this was an illegal operation.
So yeah. I started shorting the company.
The idea was that I would go away
and do my own work,
and then Matt Earl's Zatarra report
would come out.
And then I could go,
"I've checked all of this."
"Look, there's some interesting parts
from it."
What I should have said is,
"Matt Earl is a short seller."
These people have bet against
the Wirecard share price,
so they have a big interest
in pushing the price down.
So read it with that in mind.
We highlight
the wrongdoings of companies.
And there is, obviously, a profit element
to it because if we're right,
then we make a return
on the capital that we've risked.
When the Zatarra report came out,
I sort of dashed back to the office.
I was like, "I've got to tell everyone,
and I want the scoop."
And so I wrote this quick piece.
I was in too much of a hurry,
and I didn't really stop to think
how the whole thing would look.
The Zatarra report had an immediate impact
on Wirecard's share price,
which fell, but it fell a lot further
after Dan published his post,
drawing attention to the Zatarra report.
From that one post,
a billion euros or more just vanish,
and that put us immediately in hot water.
The moment I realized that Wirecard
was going to be a troubling story
was when
the first lawyers' letters came in.
They were raising questions
about the relationship
between Dan and the authors
of the Zatarra report.
And there was this allegation
that somehow Dan was colluding
with short sellers,
people who are essentially betting
against the company's share price.
Uh, that's a pretty serious charge
because it's essentially suggesting
that one of the journalists has been
involved in share-price manipulation.
That's serious.
In Germany,
short sellers have a bad reputation.
The perception is because they are betting
on the share price dropping,
they are actively seeking
to destroy companies.
Jobs are lost and that can't be good.
The Zatarra Report
wasn't seen as credible.
The criticism was always,
"What kind of report is this?"
"There isn't enough evidence
to back up its claims."
"It's just mud-slinging
because German companies
do not make mistakes."
It was seen very strongly as an attack
on Germany itself, on German companies.
We were suddenly
under attack from all directions.
We had legal threats coming in,
anonymous phone calls just abusing us.
And it was unlike anything
we'd had previously.
It was relentless.
Twitter's just this whole total,
other free-for-all.
So you get people going, "Yeah.
You're a criminal, McCrum. Go to jail."
Then occasionally, there'd be threats.
"You're gonna get
what's coming to you," sort of thing.
There was a vehicle
that was parked outside my house
that started following me.
It was very unnerving.
I had the license plates noted down,
and that led back
to investigative agencies
that were working for Wirecard.
And then one day, Paul says
that somebody's been trying to listen in
to conversations in my office.
I said, "How?"
And he says, "Across the bridge."
He spotted this person.
Unbelievable, with a lookout.
And they got
this highly sensitive listening device
across the Thames into my office.
What the bloody hell's going on?
A few weeks
after I opened the short position,
I got a call from the Wirecard lawyer.
He says, "You are short-selling Wirecard."
I thought, "How did you figure that out?"
He read me all the transactions.
Date, time, amount, rate.
He knew everything.
Then he says, "We need to talk."
He arrived with two thugs.
They looked exactly
as you imagine thugs to be.
Straightaway they pushed me
and punched the wall with full force.
I admit I was really scared.
What company sends a bunch of thugs
to an investor's office?
After that,
I stopped looking into Wirecard.
I let it be.
And no one else looked closely
into Wirecard,
except Dan McCrum.
I'd been looking at Wirecard
for a year-and-a-half at that point
when Zatarra came out.
And so I was like,
"Surely regulators, investors
are gonna look at this and go,
'There's so much dirt.
We've got to look into it.'"
But nothing ever came of it.
Immediately,
the stock price rebounded.
My dear shareholders...
Dr. Braun
had the trust of the employees,
but he never looked relaxed.
He looked like a business consultant
in a room of people having a party.
...from these added values
for the consumer.
But when Dr. Braun was near,
Jan Marsalek was not far away.
Jan was hyper-cool.
He was mentored by Dr. Braun.
You had the feeling that Braun was proud
to have a fellow Austrian
that he could mentor
and be his right-hand guy
within the company.
Well, if I find a weak spot, but I'm...
Jan just oozed confidence.
He had very strong command of situations.
It's not working. It's not cold enough.
I didn't have a quarter of the confidence
that he had at a snip of a finger.
Wirecard does not operate as an acquirer.
Um, it can work with partners
in the background.
When you ask him if he had
a few minutes of his valuable time,
he would always say, "For you, always."
But he would say that to almost everyone.
Marsalek is a completely different type.
Extremely charming,
very approachable, a great communicator.
Everything Braun didn't have,
Marsalek had,
which is why they were a great team.
I think that very few people knew
who Jan Marsalek really was.
He is certainly
at the center of this scandal.
He is the one
who made sure that the turnover
was always the way his boss,
Braun, wanted.
The German Stock Exchange
is richer because of one company.
The payment-processing company,
Wirecard, from Aschheim near Munich
has made the leap
into the stock market premier league.
Wirecard's share price last year
was 77.40.
Today it stands at 189.40.
Our figures tell a story
of strong growth.
How our business is valued
is a question for the investors.
Wirecard has shaken up
the German stock exchange this week
and kicked the Commerzbank
out of the elite DAX index.
It's about
making the cake much bigger.
I'm in the business
of making the cake much bigger.
I've got a German CEO here
of the company Wirecard.
Um, and today, Markus Braun,
you guys are gonna replace
Commerzbank, in the DAX.
You're gonna be one of the big companies
on the benchmark index here.
What does that mean to you?
I think it brings a lot
of awareness, positive awareness.
Uh, it's good for investors.
But of course, in operative terms,
it doesn't change our strong strategy.
A lot of investors
believe in German values,
and now it has the DAX seal of approval.
So a lot of people thought a DAX company
would be tightly regulated
by the German authorities.
Who wouldn't be thrilled
to have money invested in Wirecard?
Wirecard, at the time,
was a big talking point
throughout the London market.
We'd had legal complaints,
but we brushed them off.
A while later, I was having lunch
with one of my stock-market sources,
and Wirecard came up.
He said, "You know
that they will pay you a lot of money
to stop writing about them."
And I laughed,
and I said, "Don't be stupid."
He said, "No, no, no. Definitely."
"They will pay you good money
not to write about them."
And he said, "Look. Go and talk to Gary."
- Gary and Tom.
- Gary. I'm Tom.
- What's with the glasses?
- Best without glasses.
Is it? I thought they look cool.
Gary is a great, old mate,
very active trader.
You know, he had a good ear
for what was happening.
And he basically said,
"What's this stuff
you've been writing about Wirecard?"
"Are you sure it's right?"
And Gary says, "'Cause I've got
a guy here who says it's all wrong."
"Actually, he wants to talk to you."
And I said, "Well, who is it?"
"It's a guy called Jan Marsalek."
I could've fallen off my chair.
You know,
Gary was a confidential source of mine.
How did Marsalek find out
that we knew each other?
It would have been around 2017.
One of my good friends came into the bar
where I usually get my breakfast
and had a little Post-It note
with a number on,
and a name, Jan Marsalek,
and said, "Can you call this fella?
It will be worth your while."
Didn't know what it meant at the time.
It's odd, but we might make some money.
We'll have a try.
So I phoned up and he said to me,
"Look. I'm prepared to pay you
a very substantial amount of money
to introduce me
to your good friend, Paul Murphy."
I said, "I'll talk to Paul."
Gary says, "This guy,
Jan Marsalek, is desperate to meet you."
"He will get on a plane and come to London
for lunch at the drop of a hat."
The immediate thought
was this is some sort of setup.
Because it's such a strange,
uh, thing to happen.
So I said yes to the lunch.
Basically, we wanted to see
whether Marsalek would offer me money
to stop writing about Wirecard.
That was the plan.
I was introduced to Jan Marsalek
for the first time.
He was obviously very sharp,
very careful in what he said.
On first impressions,
I was looking at a very well-dressed,
articulate, straight-talking man.
It was the Financial Times
versus Wirecard.
They were trying to find
any sort of information on Wirecard.
And then Wirecard were trying
to find information back.
It was quite awkward.
He talked at length
about how he had direct experience
of journalists who were taking bribes
to write negative articles.
I told him I'd never accepted a bribe,
and he said, "I know that, Paul."
"I've seen evidence
that you've never accepted a bribe."
And I thought,
"Ah, you've been through my bank account."
Uh, and he clearly had.
I kind of realized, at that point,
that he wasn't going to suddenly offer me
a bag of cash there at the table.
There were too many people
around the table.
It ended in Jan saying,
"I'm very happy that Paul's listened."
Paul said,
"We're gonna draw a line under this,
and FT will not keep regurgitating
this old stuff."
"However, if there's new stuff,
we will nail you."
And Jan was smiling.
"That's not gonna happen
because we're doing nothing wrong."
At that point,
I negotiated a fee for my PR.
I asked for a set fee of 500,000 euros.
He settled
on 32-and-a-half thousand euros a month
for six months,
but said, "Look. Can you keep me
in contact with the short sellers,
just so I know what's going on?"
And I felt a little bit like
a double agent, but Paul knew,
and Jan knew.
I launched
Safkhet Capital Management
in January of 2018.
We were just doing our own research,
looking for opportunities,
and a name
that came up consistently was Wirecard.
Because, finally, Wirecard is making
its first foray onto US soil.
Over 20-plus years, we've emerged
as a leader in payment solutions
in North America and beyond.
What was new at that time
was the fact
that Wirecard had acquired Citi's
North American prepaid-card business.
Prepaid cards are a very effective way
of laundering cash internationally,
including dirty money.
You don't need to put your name
on the card or open a bank account.
You can just have a card
with the Wirecard logo.
The amount of criminal activity
that could go on is alarming.
That was something
that we wanted to really dig into
and see if there was anything that related
to these allegations in Zatarra
that would now be occurring
on American soil.
Wirecard's offices
were in Conshohocken, Pennsylvania,
which is two hours from New York City.
So we decided
why not just drive over there
in Christina's beat-up...
...little Volkswagen?
We saw the Wirecard signs,
and then there was no security,
so we just walked up the stairs.
It was very large.
Really, it should maybe fit 600 people...
- A lot, yes.
- ...but there were maybe 30 people.
And then they asked us what we wanted,
and we said that we wanted to speak
to someone about buying prepaid cards.
He assured me that it's all very easy,
I could give those cards to who I wanted.
It's not a problem.
And then he said I could even get cards
up to $150,000
on a single card.
This was a massive shock.
And when we checked on the dark web
to buy prepaid cards that are
being resold on the dark web,
the most you can get is $10,000.
Fall of 2018,
where I finally just pinged Dan McCrum.
And said, "Hey.
We're looking at Wirecard in the US."
"I think we have something here."
Fahmi wasn't
the only short seller who contacted me
after Wirecard entered the DAX.
I was bombarded
with ideas by short sellers.
Some of them were obsessed
with money laundering.
Others were convinced
that Wirecard's business couldn't be real.
The problem was
that none of them had any proof.
They were all theories,
but then... when was it?
Sort of one Monday morning in October,
I get this funny email from Singapore.
Criminal behavior
at a big financial company.
Wirecard.
And so I get in touch
with Stefania Palma in Singapore.
In Singapore,
Wirecard was just absolutely pervasive.
Thousands of shops,
and merchants, and hotels
were using Wirecard's card machines.
Dan became aware
that there was a potential whistleblower
who had a lot of information
and was very keen
to speak to us as soon as possible.
The first meeting was at Changi Airport.
Going in,
I knew very little of who I was meeting.
I was definitely very cautious.
I found out his real name is Pav.
He'd been the head of legal
for Asia at Wirecard.
He had recently left the company
and was full of frustration and anger
in terms of what he had witnessed.
It was an extremely intense conversation
that lasted hours.
I realized the overwhelming volume
of information that he had.
I immediately gave Dan a call and said,
"This could be immense for us."
"I hope
that all of this checks out
because if it does,
we're just sitting on gold."
Okay. Holy shit.
This sounds like the real deal.
I think I need to come to Singapore.
We met out in the open
underneath Wirecard's old building.
We were extremely paranoid
about Wirecard's hacking capabilities.
We sort of relied on the fact
that the fountain covered the noise.
And he literally starts drawing diagrams
of how Wirecard works
and who the people are.
And then he explained
how he started working for Wirecard,
he gets contacted
by this woman on the finance team,
and she tells him this incredible story.
She'd been called into a room
in the Wirecard offices
with the rest of the finance team.
And her boss is this Indonesian guy
called Edo Kurniawan.
And he's really young
for the job. He's only 33.
And if you looked at his CV,
there's basically nothing there.
But somehow he's running
the Asian finance team,
and that is, by the way,
a very significant portion
of Wirecard's business.
So this woman goes into the meeting,
and suddenly, what Edo does,
is he starts drawing on a whiteboard.
And he's explaining
how they're gonna cook the books.
Almost like that scene where they're like,
"Here's the bank
and you guys will go in here,
and the van will be waiting outside."
Like a bank job.
And so she goes and tells Pav,
the lawyer in Singapore, about it.
Immediately Pav says,
"Right. We better look into this."
Within a matter of weeks,
there's a full-blown
internal investigation going on.
None of Wirecard's top brass
know anything about it.
And they start finding
all of these dodgy transactions.
So, Pav put together this presentation
for the key guys in Germany.
"Look at what we found."
Suddenly the message comes back
from Munich,
"Good work, guys.
We'll take it from here."
"Yeah. So we're gonna put Jan Marsalek
in charge of it."
It becomes clear very soon
that nothing's gonna happen.
And then Pav gets forced out,
but he takes copies
of the inbox of this guy Edo
and gives it to us.
Seventy gigs worth of data.
As soon as I got back from Singapore,
we knew we had to think about security.
We were very aware
that Wirecard was spying on us.
Dan had to operate in complete secrecy.
We were basically acting
on the basis
that anything on the FT network
was at risk of being compromised.
We got Dan set up
with an air-gapped laptop,
which had the modem ripped out
so that it can't be hacked.
So this pile of documents from Pav,
that went on the super-secure laptop.
So every morning, I have to sign out
the key to the big safe.
The key was about that long, which
gives you a sense of how big the safe was.
It was like a giant fridge.
Get out the laptop
and the files that I'm working on,
then go into my own little bunker.
A little room
in the middle of the building in the FT...
and start going
through the material we've got.
Six weeks of every day,
laptop out the safe,
go through all the emails, print them off,
try and work out what's going on.
Okay, right. That's the time.
Close it down again. Back in the safe.
Start again the next day.
I was just following trails
through the emails.
Sticking keyword searches
into Outlook, like "India," "Marsalek."
I had been puzzling
about this company for years
and suddenly...
it was like I was inside.
I was also trying to get Jan Marsalek.
I'd never met him.
I'd never spoken to him,
but I knew he was the enemy.
I just was looking
for anything to try and tie him
to what had happened in Singapore.
I could sort of see
he was always at the edge of it.
Like he was involved,
but I couldn't quite prove it.
But what we can do is we can boil it
just down to Edo Kurniawan,
this guy in the finance team.
But if Wirecard had fired this guy,
Edo, then we didn't have a story.
Edo was there,
and he was working on the audit.
It had to be a cover-up.
It goes up online.
Within seconds,
the Wirecard share price crashes.
In the space of three days,
we've knocked eight billion euros
off the value of the company.
Holy shit. The story's working.
That was the first moment
where I felt
that this could get really ugly.
I only heard about
the Financial Times' coverage secondhand.
NEW ATTACK ON WIRECARD
It was the typical bias.
They said, "It is a foreign conspiracy
against a German company."
"A German company is the victim
and must be protected."
Wirecard had hired
a famous lawyer in Bavaria.
The lawyer said
to the public prosecutor, Baumler-Hosl,
that Wirecard is under attack
by short sellers
and its very existence is in jeopardy.
Hildegard Baumler-Hosl contacted
the German financial regulator.
The regulator BaFin then said,
"We need to protect Wirecard."
And banned short-selling
of Wirecard shares.
And even filed criminal charges
against Dan McCrum and Stefania Palma.
And I was shocked,
and I called Dan immediately and I said,
"Dan, what the hell is going on?
What is this?"
BaFin,
the German Financial Regulator,
comes out and goes,
"We're going to look
into market manipulation."
What does that mean that they have?
Because we haven't been contacted by them,
we didn't know what the evidence was.
So it's like, "Well, okay.
What's been cooked up to say I'm a crook?"
Because I just don't understand
what's happening here.
I think at the very beginning,
I just truly could not believe that
after all the work we'd done,
that we would become the targets.
When you have the regulator one of
the most powerful financial markets
in Europe
sending a very clear sign
that they're coming for you,
you can either let that get to you,
or you try to sort of channel
all that rage and frustration
into the investigation,
really hitting the story, you know,
the hardest you ever have.
And I think you know
which option we went for.
I'm back in London in the bunker,
carrying on working.
I'd been looking
through Wirecard's customers,
and I started to realize
hundreds of millions of euros
of Wirecard's business
were provided
by just these three partners.
Al Alam, Senjo, and PayEasy.
At that point in time,
these three partner businesses contributed
to something
like half of Wirecard's global sales.
One of these partner businesses
was in the Philippines.
Uh, a business called PayEasy.
On paper, PayEasy was
this very important business to Wirecard.
We say to Stefania, "We need to find out
what is going on. Is this real?"
I remember going to this office
covered with logos of both PayEasy
and a bus company called Frhlich Tours.
There were drivers coming in and out.
It was clear
that the day-to-day operations
were, in fact, just the bus company.
This looks fishy.
I ended up driving
three hours north of Manila
in this region
that is actually famous for rice fields,
chasing after a company called ConePay,
another partner business for Wirecard.
And we finally find this address.
Someone's house.
This middle-aged man opened the door,
and the first thing I see is a table
with a brown Pomeranian
and a small white dog.
There were a couple
of middle-aged Filipino men
who were just grooming
these dogs.
Is this the headquarters
of a payments company?
It was obvious we were standing
in the middle of a family home,
at which point someone remembers,
"Wait. We got this in the mail,"
and they hand me an envelope.
I take the paper out and immediately see
Wirecard Bank letterhead,
ConePay,
and the address where we were standing.
I froze completely, and I remember shaking
because I knew at that point
that we had cracked the whole thing.
I'd spent years trying
to solve this puzzle.
What is the deal with Wirecard's business?
Is it doing all this money laundering?
Is it juicing its profits?
And suddenly, you're like,
"Holy shit."
"The whole thing's fake.
None of it's real."
It's just this incredible bluff.
They came up with this deepfake...
where they were using
these three business partners
to just invent a whole load of business.
From the outside,
it looked like a real company.
Thousands of people
thought they were working
on a legitimate enterprise.
It was the emperor's new clothes.
There's been a fresh report
from the FT,
and they're talking
about half of your worldwide revenue
and almost all of your reported profits
effectively coming
from three opaque partner companies
in recent years.
We do not get distracted
by all of this noise.
This financial thriller
continues with the latest punch-up
between Wirecard and the Financial Times.
Dan McCrum, for us, was the devil.
He kept on bringing things out
that made the stock price go down.
In February,
there were new articles and allegations
and the share price fell again.
At the end of March,
new accusations were published
and the share price collapsed once again.
A BILLIONAIRE ON THE DEFENSIVE
Senior management
at Wirecard very quickly said
that the basis of this report
was completely without merit.
There is a claim
that the Financial Times
deliberately caused the fall
in the Wirecard share price
so that speculators could cash in.
We thought
Dan McCrum was making a quick buck.
They were the bad guys,
and we were the good guys.
- Sound running.
- Okay. Let's start.
How do you personally go about scandals,
confusion, chaos?
Have you ever thought about resigning?
I've never thought
about resignation.
Can you exclude the possibility
of more dirty laundry airing
that will put the share price
under pressure?
We firmly reject
these serious allegations.
We think these allegations
are mainly market speculations.
At that point,
the FT had run a series
of really quite damaging allegations,
but Wirecard's share price just seemed
to go up and up and up.
People loved the company.
At the Frankfurt stock exchange,
Wirecard has announced its annual results,
increasing its profits by 35%,
an increase of 350 million,
and says it will continue
to grow this year.
Following a move
from the payments giant Wirecard,
shares jumping more than 6% there
after the company landed
a one-billion-dollar investment
from Japan's SoftBank group.
SoftBank investing a billion dollars
in German FinTech company Wirecard.
When news
of the SoftBank investment emerged,
we were dumbfounded.
In exchange for a 6% stake,
SoftBank will help the firm expand
to Japan and South Korea.
We couldn't believe it.
You know, we had put
what we thought was clear evidence
that this was a fraud on the table.
But SoftBank were about
to give this company 900 million euros.
At that point with Dan,
I started discussing
how we were going to actually present
evidence that was overwhelming.
This is a criminal enterprise.
So, Wirecard had to do something...
to stop us.
The next day,
I get a letter from Wirecard saying,
"We've got this tape recording
of this guy called Nick Gold,
and he knows that the FT story is coming,
and you're clearly in cahoots,
and you're corrupt."
My first thought was,
"Okay. Uh, this has to be a setup."
"This has got
to be Marsalek's dirty tricks again."
I had no idea who Nick Gold was.
I am Nick Gold.
Catch! That's it!
I'm an investor.
A bad investor, but an investor.
I first met Nick Gold by chance.
Gary Kilbey was having drinks
to celebrate his 60th birthday,
and Nick Gold was there.
I remember Paul Murphy.
We were both getting drunk together.
He told me if I needed a journalist,
and I had a story to report, he was one.
Drink as much as you can take, here!
And I phoned him months later,
and said, "Can I see you?"
He says, "I can't do it for two weeks,
'cause I'm stuck on Wirecard."
The minute he said,
"I'm stuck on Wirecard,"
I knew this was a no-brainer scenario.
He'll bring something out.
It can't be positive,
therefore this is free money.
I have to short-sell this company
within an inch of my life.
Which I did to the tune
of hundreds and hundreds of millions.
I've now taken a huge short position
in Wirecard,
which is probably known to them.
They're going to see
who the big shorts are.
So they now know Nick Gold
is a massive short seller.
I'm then on a beach in Cannes,
dancing on tables
and being a lunatic as I am,
and having a great time.
And somebody comes up to me
that I haven't seen in years.
He's a football agent.
I've known him forever.
He worked for me years ago,
and he says he's now gotten
the Kuwaiti National Investment Fund
and they're his partners
and he's got billions of pounds,
they'd like to invest in the stock market.
So could I help?
A few days later, I fly back to London
to meet the Kuwaiti Investment Fund.
Well, what happened is
a magnificent sheikh walked in
and his spokesperson next to him
walked in with my football guy,
and they sat down.
'Cause I'm with my friend,
I thought I could speak openly.
I then tell him there are billions
to be made short selling Wirecard.
And I know the company's going down
because the Financial Times
are writing an article,
and the company is fraudulent,
and that we were going
to build great big ships together.
This was as sheikh as you get.
He stank of affluence.
The man stank of money.
You could tell this is a proper sheikh.
As it turns out, I was wrong.
The sheikh left, and the guys stayed
to facilitate for the sheikh,
and I was left with those two.
- Hey. I'm Nick Gold.
- Hello, Nick. How are you?
What sort of size business
were you thinking of doing?
At the moment,
they are looking at investing 50 million.
Okay.
There was a short seller, Nick Gold,
who met with an investor
who secretly recorded him.
This is as good as it gets in terms of...
- We know the article's coming.
- Okay.
And I bet it's gonna be today.
We know now that this investor
was actually a private detective
who was hired
by someone associated with Wirecard.
So what Wirecard did was...
The sheikh wasn't real. It was fake.
The friend of mine,
that paid the guy four million,
he got my four million by the way,
that bastard.
Then I got a text message
from Paul Murphy saying,
"What the fuck have you done?"
This was a complete setup.
Oh, I was furious, absolutely furious
because Wirecard's found a way
of presenting evidence
that appeared to show
that I personally was in cahoots
with a guy
who was making money shorting the stock.
Within hours, all this detail
is in the hands of the German press,
who are writing articles saying,
"Here's clear evidence
that the FT's corrupt."
I was pretty pissed off,
actually. Pretty pissed off.
I was confident that we'd been set up,
but I have to protect
the reputation of the FT.
You know, I thought,
"Paul you're a brilliant reporter,
but you've done something really dumb."
"You're gonna have
to spend time in the sin bin."
And that meant
a rigorous external legal investigation
to show the world
that there was no truth in that.
That was the first time
that I really felt vulnerable.
You know, we were basically suspended.
So we have to sit and wait
for this investigation to happen.
But then the story gets weirder
and weirder.
I'm Jorg Schmitt
from theSddeutsche Zeitung.
I'm the chief editor
of the investigations team.
I was at my desk when I suddenly
got a call from an unknown number.
On the other end was a young woman.
She said,
"Are you interested in Wirecard?"
"Do you know Prinzregentenstrasse 61?"
"It's the secret office of Jan Marsalek."
Even colleagues closest
to Marsalek didn't know
that there was this second office
in the Prinzregentenstrasse.
He would meet
with a very illustrious circle of people,
do business, and host wild parties.
It's Marsalek's boy gang, I'd say.
We always find Martin W.,
who had been
in the Austrian secret service.
El-Obeidi,
a former Libyan intelligence officer.
Stani, a Russian who was supposedly
in Munich visiting his sick mother,
but we think he was probably an FSB man,
a Russian secret-service agent.
So suddenly
we had three former intelligence agents
who were in and around
the Prinzregentenstrasse.
And the thing is the Prinzregentenstrasse
is not just anywhere in Munich.
It is directly opposite
the Russian consulate.
There is obviously
a secret-service connection.
That electrified me.
Why might Marsalek be so interesting
to intelligence agencies?
Wirecard is a company
through which there are billions
of transactions every year.
And these payments are gold mines
for the secret services
because they show who could be compromised
because their creditcard information
could show porn usage,
brothel visits, or whatever else.
To have a source like Marsalek
who is always
on the move around the world,
that makes a lot of sense.
When the news came through
that Paul had been suspended,
Paul pulled me aside and basically said,
"Both Braun and Marsalek are Austrian."
"Ask around.
See what you can find in Vienna."
Someone recommended this politician
that was looking
at all kinds of political-corruption stuff
going on in Austria.
Stephanie Krisper.
Vienna is sadly mostly
an inviting terrain
for intelligence officers,
for dubious characters,
spies, economic spies.
We met on a boat in the Danube Canal.
I just sort of said,
"Do you know Jan Marsalek?"
She sat back a bit and pondered.
She knew someone that knows Jan,
but she had to be very careful
because he was fearful
of who Jan was involved with.
And so we arranged
to meet him at Caf Pruckel.
Stephanie walked in
and introduced me to this friend of hers.
What followed were probably
the most remarkable 20 minutes
in my short 14 years in journalism.
My name is Killian Kleinschmidt.
I'm a German National.
I've been working with the United Nations
on issues of migration and refugees.
I mean, that's something I know.
Um, how to deal
with large numbers of people on the move.
2016, Austria is building up
to the elections.
Um, I received an email
asking me whether I would be interested
to work on a project with Jan Marsalek.
I didn't know who that was.
I did not even know Wirecard.
A few days later,
we met in the famous restaurant,
the Kafer in Munich.
Extremely eloquent, smiling,
the Austrian smart-ass,
very smooth talker.
He stressed that he was very interested
to do a project in Libya.
Crossing the Sahara
in search of a better life,
these migrants are bound for Europe.
And this is where their long ride begins,
several days' drive
from the Libyan border.
He stressed this knowledge of Libya,
where he said he had been several times,
but that his real interest
was really to contribute
to the stabilization of Libya.
He presented himself as doing good work.
So we agreed that he would put in
200,000 euros to finance my team,
working with refugee camps in Libya.
It was fantastic. We liked it.
The relationship with Marsalek
was managed by two persons.
Wolfgang Gattringer, who used to work
in the Austrian Ministry of Interior,
and Brigadier Gustenau
from the Ministry of Defense of Austria.
Then popped up Colonel Andrey Chuprygin,
the former secret-service officer
from Russia.
He is presented not only as the guy
who works with Jan,
but also the guy
who coordinates Russian interests
in the Middle East and North Africa.
There should have been alarm bells.
In mid-February, we meet Marsalek
in the Prinzregentenstrasse,
just opposite
the Russian General Consulate in Munich.
It's an empty place. It's an old building.
Nice pieces of art.
There is Marsalek talking to Gattringer
and Gustenau and he said,
"I want to train and equip
a border-guard force
of 15, maybe 20,000 men in Libya."
Basically preventing people in distress
from crossing the border.
This is all very bad.
Border security in Libya was a topic that,
for a COO of a company like Wirecard,
wasn't normal in the slightest.
As time went on, I asked myself,
"What does he want in Libya?"
"And why does he seem
to be getting support
from within the Austrian government
for a project
that doesn't have humanitarian aims?"
For me, then that all clicked.
Migration is the theme which makes you win
or lose elections in Europe.
If you ignore negative trends
or if you let immigration go unchecked,
things will go downhill very quickly.
Jan Marsalek was acting as the in-between
for the Russians
and for the right-wing populist parties.
It is logical that if Russia
wants to destabilize Europe,
they would try to create anxiety
over supposed waves of refugees
to create a narrative
that heats the debate again.
Marsalek has very good contacts in Russia.
That's why it's plausible
that Jan Marsalek could have been trying
to set something up for the Russians.
My mind was going
at a million miles an hour.
It was clearly bonkers.
The COO of a German company
is not supposed to be involved
in encouraging
disruptive right-wing parties
to capitalize on migration problems,
or recruiting militiamen.
The idea would be crazy
were it not for the fact
that I just felt it rang true.
So Sam starts finding
about all these insane Russian links.
Now, we have to be, like,
state-security-level paranoid.
We're not even putting anything
in digital.
It all has to be handwritten,
and don't talk on the phone.
Paul heard about 28 private detectives
who were wandering around London,
following people.
I went after
the private investigators'
spying operation.
That led us to discovering
that the person bankrolling this operation
was a former Head of Foreign Intelligence
for the Libyan transitionary government.
Rami el-Obeidi.
We did know that Marsalek had interests
in Libya by that point.
Whoever hears the words,
"Libyan spy chief," and thinks,
"Oh, right. Yeah. That's totally fine"?
And so I'm sort of leaving the house
looking for cameras,
leave the office at different times,
catch different trains.
I'd be on the Tube,
you'd reach your stop and then you wait
until just before the doors close.
Then I'd jump out and sort of like,
"Did anyone else get off with me as well?"
That was the moment
when I felt nervous about my family.
This is Freddy McCrum, age three days.
That's what you worry about.
Because you'd do anything
to protect your children.
And the idea that you would put them
in danger for some story...
I mean, who wants to do that?
Um...
It's criminal to wiretap journalists.
It's criminal
to hack their email accounts.
The worst part was that this intimidation
was quite successful.
The Financial Times had launched
an internal inquiry into Dan McCrum,
and Wirecard made the most of this time,
and its market price kept rising.
They even got the German Chancellor
to promote the company in China.
All this happened in those months
when the Financial Times
didn't write anything critical
of Wirecard.
I went through a torrid time.
I wanted to get back at them.
I was livid.
Soon as the investigation was over,
when we get a clean bill of health,
I called in Paul and Dan.
I said, "The next story,
I want you to draw blood."
We had to find a way
to make it absolutely clear to everybody
that Wirecard was a fake.
We were angry,
and there was no hanging back.
It was the whole enchilada.
Wirecard is a fake,
its business isn't real,
and Markus Braun is lying to you.
And here are the documents that prove it.
This is how it is doing the fakery.
Here are the partners that don't exist.
Here are the customers who don't exist.
Here is everything you need
to switch on the blue lights,
go down to Wirecard HQ,
and arrest everyone.
The Financial Times suggest
that you've routed billions of euros
in payments
- to 34 names...
- Mm-hmm.
...through a partner company
in Dubai at Al Alam Solutions.
According to the FT,
more than half of the clients
have never heard of Al Alam.
Let me give you
a clear statement here.
This information is not authentic,
how it was presented by the FT.
We can completely reject
these allegations.
Dan McCrum's reporting
at the Financial Times,
of course, made us uneasy.
However, I just didn't have any visibility
of any transactions
in the Middle East or the Philippines.
It didn't really make sense to me
that they couldn't exist.
It was painful
because this is something you believed in.
We believed
that we had put a hole in Wirecard
that would bring the business down,
but it didn't come crashing down.
But this latest evidence
from the FT was difficult to ignore.
Now Wirecard has categorically rejected
the allegations of impropriety.
But on October 21st,
Wirecard appointed KPMG
to conduct a special audit,
just to confirm that they have not engaged
in any improper accounting practices.
Dr. Markus Braun, you've decided
to carry out an external audit
due to the allegations
that the FT have made.
The question is, "Why only now?"
Well, we reacted very quickly.
The newspaper article was published
only over a week ago.
At first, Braun didn't want this inquiry.
We reject these allegations 100%.
People at Wirecard must have known
that this is going to be troublesome.
When will the auditors present
their report?
I don't want to jump the gun,
but we think within a few months.
We believe
we will have results very quickly.
Holy shit. The story's working.
Finally, you know, we had an impact.
They haven't been able to brush it off.
There's been enough pressure
from their investors
that they've had
to appoint KPMG.
It felt like the stakes were high
at that point.
My name is Joachim Giehl.
I am Markus Braun's neighbor.
I always had the impression
that this man is under
a massive amount of pressure.
He greeted nobody as his neighbor.
He always just got in his car.
No hello, no nothing.
There was one day, around 8:30 p.m.,
I parked my car in the garage.
It was dark, and I saw Markus Braun
at the entrance to our building.
I saw him in the lamplight,
and he looked extremely tense.
He was surrounded by some men
whom I didn't recognize.
They seemed out of place.
They didn't look like businesspeople.
They looked like people
who work as security, bodyguards,
a group of thugs...
...or people like that.
They didn't look
like they were there to protect him.
Rather, I thought they were there...
...to do a job.
Dr. Markus Braun
and Jan Marsalek's relationship
definitely deteriorated.
In December 2019,
we had a Christmas party for our team,
and Jan Marsalek arrived
somewhat unexpectedly.
And then he said... in a smiling fashion,
"Martin, if you stole 100,000
from the company,
I would not have respect for you."
"If you're gonna steal it
from the company,
you have to steal millions,
hundreds of millions."
While this was happening,
Braun comes up with this fantastic idea.
His biggest yet.
The plan was to take over Deutsche Bank,
Germany's biggest bank.
It was called "Project Panther,"
a plan for a hostile takeover.
A large consulting company
put a document together
which showed how it could make sense
to merge an old bank
with a new tech company.
The "Wirebank,"
or whatever it would have been called.
The idea was
if you merged these two companies,
with the Deutsche Bank balance
being so much bigger than Wirecard's,
that then maybe the fraud at Wirecard
would somehow get swept under the rug.
If you've got a bank like Deutsche Bank,
you can hide a lot of bad numbers
inside a bank that big.
It's sort of genius, really.
It's a bit like instead of having
a getaway car,
it's just gone into the bank
and taken over.
And if they'd done that, you know,
Markus Braun would have been
the genius financier,
who was now running one of the
world's largest financial institutions.
It was essentially
Braun's last roll of the dice.
Wirecard's existing auditors, EY,
were taking extra steps
to check that 1.9 billion of cash,
which Wirecard claimed, actually existed.
Wirecard essentially said
that 1.9 billion euros was sitting
in two Philippine banks.
On this occasion,
the auditors wanted real proof
that Wirecard had access
to the money it claimed,
which, of course, Wirecard couldn't do
because the money didn't exist.
So everybody wanted to know,
would EY find out the truth?
That night, I couldn't sleep...
because I wanted to be prepared.
Whatever I could get my hands on,
as far as shares of Wirecard,
I got it because, you know, in my gut,
I knew it was going to happen that day.
We got close to 100 million
at the, you know, peak of Wirecard
until I ran out of shares to short.
That morning,
I'm up at six o'clock
waiting for something to happen.
Suddenly this announcement pops up.
Auditors can
no longer locate 1.9 billion
that are said to be
in escrow accounts in Asia.
The two banks
in the Philippines
where the 1.9 billion was supposed to be
said today
that they had no business relations
with the payments processor.
The documents were faked.
As soon as I saw that,
I just knew it's completely game over.
The share price crashes.
The short sellers can all see it.
They start selling
every single Wirecard share
they can get their hands on
and finally make a fortune from it.
How do you simply miss
a couple of billion dollars?
The share price plunged by 70%.
Fucking hell. We did it!
You know...
...I mean, we did it.
We finally got those bastards.
When you make money,
obviously it's great.
You know, we're happy for our investors
and it's a huge win.
Our satisfaction,
the excitement is in the hunt,
but Wirecard was our biggest winner,
and I suspect it'll be our biggest winner,
um, for a long while.
Ladies and gentlemen,
on behalf
of the management board of Wirecard,
I would like to give
the following explanation.
The press conference that night
was like The Muppet Show.
Braun reads from the teleprompter.
The death sentence
has already been handed out,
and he's still making it seem
as if he's going to announce
an amazing quarterly report next month.
Right now,
it cannot be ruled out that Wirecard
has become the damaged party
in a fraud case
of considerable proportions.
Within a week,
Wirecard has been placed
into administration. It's gone bust.
Former CEO of Wirecard
has been arrested
on suspicion of falsifying accounts.
And Markus Braun has been arrested.
But Jan Marsalek just disappears.
Where is the COO
of the insolvent payment processor,
Wirecard, the Austrian, Jan Marsalek?
Wirecard's former
Chief Operating Officer, Jan Marsalek
may have returned to the Philippines.
He arrived on June 23.
That was two days ago
and left yesterday morning
bound for China.
An agent always has an escape route.
We knew that Marsalek was in the office
until that Friday afternoon.
He supposedly said
he had to go to the Philippines
to clear the whole thing up.
He went for dinner
with Martin W. that evening.
Martin W., who he knew
from the Prinzregentenstrasse
and who used to be
in the Austrian secret service
together with an Austrian,
right-wing politician
booked Marsalek a flight.
Marsalek paid close to 8,000 in cash...
and then his trail disappeared.
He didn't go to the Philippines.
It doesn't make sense.
He couldn't have entered the country
because of quarantine regulations.
There are databases
where you can check flight data.
Since 2015,
he flew at least 60 times to Russia.
And there was one flight
from a small airport near Vienna to Minsk.
It's not far from Moscow.
The border to Russia is not controlled,
and that's where the trail is lost.
After that, it's just rumors.
We don't know for certain if Marsalek
was actually a secret-service informant
or not.
Jan Marsalek was
very well-connected
in the secret service parallel world,
and that's why I think he won't be
that easy to find.
We know
that he's online occasionally
via an old Telegram account.
I can check again.
He's been online every few months.
The last time was on May 27, 2021.
The German parliament has started
a political inquiry into Wirecard,
one of the biggest scandals
of the German republic.
A financial disaster for those
who invested their money in Wirecard.
It was
the first DAX-listed company to go bust.
I think that Wirecard's inner circle
who knew what was really going on
was very small.
Certainly Marsalek.
The fascinating question is,
"What did Braun know about all this?"
He wasn't emotional.
He was very tense.
And then he gave
a short opening statement.
"All I can say... is we were all deceived."
"I'm a victim."
And then his lawyer said
he won't answer any further questions.
He really sat there for three hours
and didn't answer.
Reliving the whole experience now,
I feel naive
in not having seen certain things.
I do believe, personally,
that there's a possibility he did not know
what Jan Marsalek was doing,
but I think
it was his responsibility to know.
I think so far,
we only know the tip of the iceberg.
Unless Jan Marsalek turns up somewhere
and breaks his silence,
only then will we get the full story.
If Jan's out there,
I'd love to talk to him.
I mean, I've spent years trying
to get inside his head.
Who was it
who was committing the fraud within?
You know,
what did he and Markus Braun talk about?
Was it a relief
when it came crashing down?
That's kind of interesting, right?
I got a call from a source.
He asks me,
"Have you ever looked into Wirecard?"
"The payment processor? No."
"It's a very strange company."
"Companies are being set up."
"Money comes in, money goes out."
That is totally spooky.
He'd been called by foreign friends
who used to work in intelligence agencies,
and they warned him,
"Are you interested in Wirecard?"
"Keep your hands off it."
Scandal involving a German
digital payments company, Wirecard.
Mr. Braun, reports about your business
read like a financial thriller.
How do you
simply miss a couple of billion dollars?
Bogus sales,
balance sheet manipulations,
many allegations.
How bad is it going to get?
Money laundering, gambling, porn,
helping terrorist organizations.
It was
the Financial Times versus Wirecard.
They were trying to find information,
and then Wirecard were trying
to find information back.
It was a total deepfake.
It looked like a bank,
but it was actually a robbery.
The former COO,
Jan Marsalek, is on the run.
The biggest fraud scandal
in German history.
There's
an international manhunt for Jan Marsalek.
It's unbelievable how something
like this can survive for so long.
It was clear to me
this was going to be a huge story.
Scammers take advantage
of people's desires.
In Germany, the desire was,
"We want to be at the front of the pack."
Germany's industry is extremely successful
but very old, very traditional.
These famous German brands
like Siemens, Daimler, BMW, Volkswagen,
these are all very old companies.
That's why German politicians
and German business people
are often asked,
"Where are actually your new companies?"
We want a major, global,
digital champion of our own
like in Silicon Valley.
The German Google, the German Facebook.
And Wirecard played
on that desire beautifully.
Discover Wirecard.
We develop financial technologies
that make payments mobile, seamless,
and almost invisible.
Partner up with Wirecard,
the world's leading innovation driver
in digital financial technology.
He's a hero, a rock star.
Please give a very warm welcome
to the CEO and CTO of Wirecard,
Dr. Markus Braun.
Good morning, ladies and gentlemen.
Wirecard was like the German PayPal.
And in one sentence,
that's our business model.
Wirecard the processor
for online trade, online shops.
They make sure when I buy something,
the money gets from my credit card
to the online retailer.
It's not about owning data,
but it's about the algorithms
that deliver a value out of data.
There's a company founder dressed
in a black turtleneck
with a neat turn of phrase...
The business model delivers a value-add,
and where there is a value-add,
you have the money to reinvent.
...who presents himself as a visionary.
The "Steve Jobs of the Alps."
My name is Martin Osterloh.
I worked for Wirecard for 16 years.
When I joined in 2005,
we were about 130, 150 people.
When I left Wirecard,
there were over 6,500 individuals.
Wirecard is one of
the fastest-growing
financial commerce platforms.
When at Wirecard,
there was an extremely proud sense
of being a big German technology company.
Wirecard jumped
on the digital train in the '90s
that continues to pick up speed,
and now Wirecard
has even overtaken Deutsche Bank
with their worth placed
at over 20 billion.
A symbol
for the new era of the finance sector.
This was a company on the rise.
It grew unlike any other company
we'd seen in Germany.
And that rise, that immense growth,
led many people to believe in it.
New, successful,
global, profitable
and German politicians were proud
to be able to say,
"Hey. We have a FinTech company!"
When the chancellor went to China,
she actually campaigned
for Wirecard in 2019 with Xi Jinping.
Everyone in Germany
believed in this company.
No one would have believed
that this was the work of gangsters.
Being a journalist,
you get to do all sorts of things
which you're not supposed to.
You're exposing secrets.
The first time
I ever heard the word Wirecard,
I was looking for dodgy companies
to write about.
Corporate frauds, things like that,
because they make great stories.
I was chatting
to this Australian hedge-fund manager.
He's like, "So would you be interested
in some German gangsters?"
I think he looked to the accounts
and thought it was a fraud.
So I made a note,
"Wirecard, something to look into."
From the outside,
it looked like a legitimate enterprise.
I mean, it had 6,000 people.
It had offices.
The profits were great.
And so I think
it just sort of fitted into this,
"Online payments.
That's growing quickly, isn't it?"
But this big pile of documents,
which showed all these deals
Wirecard had done in Asia,
and something about them
just seemed a bit off,
that they didn't quite seem real.
Outside of Europe,
we see a growth of 25%
strongly driven by new regions,
by developing regions of Asia.
Wirecard didn't appear
to grow by adding customers,
like Spotify might add subscribers.
It was buying its growth
by buying businesses, mostly in Asia.
But, basically, the numbers don't add up.
I tried to talk to Wirecard.
They were like, "We're very busy dealing
with our results. We can't talk to you."
Normal companies don't do that
when Financial Times knocks on the door.
So, I persisted.
Eventually, they put Markus Braun
on the phone.
"We are a software company
which has a bank as a daughter."
There were many weird things
about that conversation.
Wirecard always had the same playbook
each time it was criticized.
It would say that the critics
were in league with short sellers
seeking to manipulate the share price.
My name is Tobias Bosler,
and I have been,
for many years, a short seller.
Most people invest
thinking a share price will rise.
A short seller differs from an investor
by making money when a share price falls
and loses money when it increases.
The narrative
that's given around short sellers
is that they're there to just drive
the share prices down on companies
to seek a profit.
Certain areas of the investment community
would probably view short sellers
as loosely affiliated
with some sort of financial terrorist.
Now, the reality of the situation
is that most short sellers
would take a short position
because they think fundamentally
a stock is overvalued.
We are short sellers.
In fact, we're the only "short only,
woman only" fund out there in the world.
We exclusively make money
by betting against stocks,
betting that the prices
of those stocks will fall.
And we gain our conviction
around these bets
by doing a lot of deep investigative work
to make sure that we're right.
I mean, it's a lot like being
a financial detective.
I mean, what we look at are companies
that we think are generally up to no good.
I investigated Wirecard for two years.
I understood its business model perfectly.
It handled payments for online businesses
in pornography and online gambling,
but it wasn't illegal.
It was certainly
a big part of what we did,
and it made the company very strong
at the beginning.
Everything from poker companies,
casinos, bingo,
certainly also pornography.
But we didn't call them porn.
What would you call them?
Emotional content.
- Are you joking?
- I'm not joking.
The poker market in the US
was 50% of the global poker market.
But that all changed in 2006
when a new law in America made it illegal
to handle payments
for US citizens playing poker.
So Wirecard lost a major source of income.
But, in spite of this law,
the profits of Wirecard kept rising.
What company is able to do that?
This can't be right.
We're trying to write
the story, but it was complicated.
I'd go backwards and forwards
and basically got nothing.
At that point, I'd given up
because nobody seemed interested
in the Wirecard story.
And then I get this phone call.
So I went to meet this guy, Matt Earl.
I think he rang me up and said,
"Hey. Do you wanna go meet for lunch?"
He was a short seller.
And also he wrote blogs about frauds.
This thing called Zatarra.
The first time
I became aware of Wirecard
was when a reader of the blog that I wrote
reached out to me to say,
"Have you looked at this German payments
business, Wirecard?"
There was allegations
that Wirecard had been involved
in a money-laundering operation
in Florida.
There was press reports
that they had been processing
unlawful gambling-related monies
into the United States.
That was illegal.
So I thought, "Let's have a look at this."
The meeting was
in a Japanese restaurant in the city.
And so we sort of sit down,
you know, order, and it's like,
"Okay. What's going on?"
And Matt sort of slides under the table,
I think it was a Tesco carrier bag full,
this big sheaf of documents
about that thick.
And then he explained
this is the Zatarra report.
This is what he's been working on.
There's 120 pages of this stuff.
And the core of the Zatarra allegation
was everyone thinks Wirecard is this
big payment processor doing legit things,
and actually the heart of its business
is laundering money for criminals.
Money laundering is taking the proceeds
of crime and cleaning the money.
If you rob a bank
and have a big bag full of cash,
you might launder the money by making
it look like you earned the money.
And Wirecard was doing this
for various online businesses,
but the principle is the same.
What Wirecard would do
is if it was contentious,
say like gambling or porn,
miscode the transaction as something else.
Instead of putting a payment
as gambling, it might go,
"Actually, this is a florist."
Wirecard could get away with it
by taking advantage of various
little weaknesses in the system.
All the transactions would come
into the United States
via a UK company called Bluetool,
based in Consett, County Durham.
Consett is this little,
depressed ex-mining town up on the moors.
Now, you'd think that a company
that is sending hundreds of millions
of dollars over to the US
would have a significant office presence.
This was someone's house.
That seems sort of odd.
It is exactly like Ozark.
It's an out-of-the-way place
where they could launder
huge amounts of money.
We were approached
by somebody from up the street
from where we used to live.
And they asked if we just wanted
to have some free money.
They said all you had to do
was to sign your name,
and when you signed your name,
you got 50 quid.
The people who were listed
as the directors of these companies
had no idea about them.
But really, that company would be a shell
to hide the real owner,
which was, you know, a gambling website.
I mean, all you were told at the time
was that you would get letters
and all you had to do was post them back,
and that's all we've ever had to do.
So you've got a German bank
moving money through the north of England
in this remote, little town
for all these dodgy businesses elsewhere
in the world.
We're talking about maybe
billions of dollars hidden in the shadows.
And it just happened to be this little,
red-brick town in the north of England
was the perfect channel
to make it look legit.
They had literally set up
the whole infrastructure
to permit laundering of money
to take place.
So in my mind,
that rendered Wirecard worthless
because this was an illegal operation.
So yeah. I started shorting the company.
The idea was that I would go away
and do my own work,
and then Matt Earl's Zatarra report
would come out.
And then I could go,
"I've checked all of this."
"Look, there's some interesting parts
from it."
What I should have said is,
"Matt Earl is a short seller."
These people have bet against
the Wirecard share price,
so they have a big interest
in pushing the price down.
So read it with that in mind.
We highlight
the wrongdoings of companies.
And there is, obviously, a profit element
to it because if we're right,
then we make a return
on the capital that we've risked.
When the Zatarra report came out,
I sort of dashed back to the office.
I was like, "I've got to tell everyone,
and I want the scoop."
And so I wrote this quick piece.
I was in too much of a hurry,
and I didn't really stop to think
how the whole thing would look.
The Zatarra report had an immediate impact
on Wirecard's share price,
which fell, but it fell a lot further
after Dan published his post,
drawing attention to the Zatarra report.
From that one post,
a billion euros or more just vanish,
and that put us immediately in hot water.
The moment I realized that Wirecard
was going to be a troubling story
was when
the first lawyers' letters came in.
They were raising questions
about the relationship
between Dan and the authors
of the Zatarra report.
And there was this allegation
that somehow Dan was colluding
with short sellers,
people who are essentially betting
against the company's share price.
Uh, that's a pretty serious charge
because it's essentially suggesting
that one of the journalists has been
involved in share-price manipulation.
That's serious.
In Germany,
short sellers have a bad reputation.
The perception is because they are betting
on the share price dropping,
they are actively seeking
to destroy companies.
Jobs are lost and that can't be good.
The Zatarra Report
wasn't seen as credible.
The criticism was always,
"What kind of report is this?"
"There isn't enough evidence
to back up its claims."
"It's just mud-slinging
because German companies
do not make mistakes."
It was seen very strongly as an attack
on Germany itself, on German companies.
We were suddenly
under attack from all directions.
We had legal threats coming in,
anonymous phone calls just abusing us.
And it was unlike anything
we'd had previously.
It was relentless.
Twitter's just this whole total,
other free-for-all.
So you get people going, "Yeah.
You're a criminal, McCrum. Go to jail."
Then occasionally, there'd be threats.
"You're gonna get
what's coming to you," sort of thing.
There was a vehicle
that was parked outside my house
that started following me.
It was very unnerving.
I had the license plates noted down,
and that led back
to investigative agencies
that were working for Wirecard.
And then one day, Paul says
that somebody's been trying to listen in
to conversations in my office.
I said, "How?"
And he says, "Across the bridge."
He spotted this person.
Unbelievable, with a lookout.
And they got
this highly sensitive listening device
across the Thames into my office.
What the bloody hell's going on?
A few weeks
after I opened the short position,
I got a call from the Wirecard lawyer.
He says, "You are short-selling Wirecard."
I thought, "How did you figure that out?"
He read me all the transactions.
Date, time, amount, rate.
He knew everything.
Then he says, "We need to talk."
He arrived with two thugs.
They looked exactly
as you imagine thugs to be.
Straightaway they pushed me
and punched the wall with full force.
I admit I was really scared.
What company sends a bunch of thugs
to an investor's office?
After that,
I stopped looking into Wirecard.
I let it be.
And no one else looked closely
into Wirecard,
except Dan McCrum.
I'd been looking at Wirecard
for a year-and-a-half at that point
when Zatarra came out.
And so I was like,
"Surely regulators, investors
are gonna look at this and go,
'There's so much dirt.
We've got to look into it.'"
But nothing ever came of it.
Immediately,
the stock price rebounded.
My dear shareholders...
Dr. Braun
had the trust of the employees,
but he never looked relaxed.
He looked like a business consultant
in a room of people having a party.
...from these added values
for the consumer.
But when Dr. Braun was near,
Jan Marsalek was not far away.
Jan was hyper-cool.
He was mentored by Dr. Braun.
You had the feeling that Braun was proud
to have a fellow Austrian
that he could mentor
and be his right-hand guy
within the company.
Well, if I find a weak spot, but I'm...
Jan just oozed confidence.
He had very strong command of situations.
It's not working. It's not cold enough.
I didn't have a quarter of the confidence
that he had at a snip of a finger.
Wirecard does not operate as an acquirer.
Um, it can work with partners
in the background.
When you ask him if he had
a few minutes of his valuable time,
he would always say, "For you, always."
But he would say that to almost everyone.
Marsalek is a completely different type.
Extremely charming,
very approachable, a great communicator.
Everything Braun didn't have,
Marsalek had,
which is why they were a great team.
I think that very few people knew
who Jan Marsalek really was.
He is certainly
at the center of this scandal.
He is the one
who made sure that the turnover
was always the way his boss,
Braun, wanted.
The German Stock Exchange
is richer because of one company.
The payment-processing company,
Wirecard, from Aschheim near Munich
has made the leap
into the stock market premier league.
Wirecard's share price last year
was 77.40.
Today it stands at 189.40.
Our figures tell a story
of strong growth.
How our business is valued
is a question for the investors.
Wirecard has shaken up
the German stock exchange this week
and kicked the Commerzbank
out of the elite DAX index.
It's about
making the cake much bigger.
I'm in the business
of making the cake much bigger.
I've got a German CEO here
of the company Wirecard.
Um, and today, Markus Braun,
you guys are gonna replace
Commerzbank, in the DAX.
You're gonna be one of the big companies
on the benchmark index here.
What does that mean to you?
I think it brings a lot
of awareness, positive awareness.
Uh, it's good for investors.
But of course, in operative terms,
it doesn't change our strong strategy.
A lot of investors
believe in German values,
and now it has the DAX seal of approval.
So a lot of people thought a DAX company
would be tightly regulated
by the German authorities.
Who wouldn't be thrilled
to have money invested in Wirecard?
Wirecard, at the time,
was a big talking point
throughout the London market.
We'd had legal complaints,
but we brushed them off.
A while later, I was having lunch
with one of my stock-market sources,
and Wirecard came up.
He said, "You know
that they will pay you a lot of money
to stop writing about them."
And I laughed,
and I said, "Don't be stupid."
He said, "No, no, no. Definitely."
"They will pay you good money
not to write about them."
And he said, "Look. Go and talk to Gary."
- Gary and Tom.
- Gary. I'm Tom.
- What's with the glasses?
- Best without glasses.
Is it? I thought they look cool.
Gary is a great, old mate,
very active trader.
You know, he had a good ear
for what was happening.
And he basically said,
"What's this stuff
you've been writing about Wirecard?"
"Are you sure it's right?"
And Gary says, "'Cause I've got
a guy here who says it's all wrong."
"Actually, he wants to talk to you."
And I said, "Well, who is it?"
"It's a guy called Jan Marsalek."
I could've fallen off my chair.
You know,
Gary was a confidential source of mine.
How did Marsalek find out
that we knew each other?
It would have been around 2017.
One of my good friends came into the bar
where I usually get my breakfast
and had a little Post-It note
with a number on,
and a name, Jan Marsalek,
and said, "Can you call this fella?
It will be worth your while."
Didn't know what it meant at the time.
It's odd, but we might make some money.
We'll have a try.
So I phoned up and he said to me,
"Look. I'm prepared to pay you
a very substantial amount of money
to introduce me
to your good friend, Paul Murphy."
I said, "I'll talk to Paul."
Gary says, "This guy,
Jan Marsalek, is desperate to meet you."
"He will get on a plane and come to London
for lunch at the drop of a hat."
The immediate thought
was this is some sort of setup.
Because it's such a strange,
uh, thing to happen.
So I said yes to the lunch.
Basically, we wanted to see
whether Marsalek would offer me money
to stop writing about Wirecard.
That was the plan.
I was introduced to Jan Marsalek
for the first time.
He was obviously very sharp,
very careful in what he said.
On first impressions,
I was looking at a very well-dressed,
articulate, straight-talking man.
It was the Financial Times
versus Wirecard.
They were trying to find
any sort of information on Wirecard.
And then Wirecard were trying
to find information back.
It was quite awkward.
He talked at length
about how he had direct experience
of journalists who were taking bribes
to write negative articles.
I told him I'd never accepted a bribe,
and he said, "I know that, Paul."
"I've seen evidence
that you've never accepted a bribe."
And I thought,
"Ah, you've been through my bank account."
Uh, and he clearly had.
I kind of realized, at that point,
that he wasn't going to suddenly offer me
a bag of cash there at the table.
There were too many people
around the table.
It ended in Jan saying,
"I'm very happy that Paul's listened."
Paul said,
"We're gonna draw a line under this,
and FT will not keep regurgitating
this old stuff."
"However, if there's new stuff,
we will nail you."
And Jan was smiling.
"That's not gonna happen
because we're doing nothing wrong."
At that point,
I negotiated a fee for my PR.
I asked for a set fee of 500,000 euros.
He settled
on 32-and-a-half thousand euros a month
for six months,
but said, "Look. Can you keep me
in contact with the short sellers,
just so I know what's going on?"
And I felt a little bit like
a double agent, but Paul knew,
and Jan knew.
I launched
Safkhet Capital Management
in January of 2018.
We were just doing our own research,
looking for opportunities,
and a name
that came up consistently was Wirecard.
Because, finally, Wirecard is making
its first foray onto US soil.
Over 20-plus years, we've emerged
as a leader in payment solutions
in North America and beyond.
What was new at that time
was the fact
that Wirecard had acquired Citi's
North American prepaid-card business.
Prepaid cards are a very effective way
of laundering cash internationally,
including dirty money.
You don't need to put your name
on the card or open a bank account.
You can just have a card
with the Wirecard logo.
The amount of criminal activity
that could go on is alarming.
That was something
that we wanted to really dig into
and see if there was anything that related
to these allegations in Zatarra
that would now be occurring
on American soil.
Wirecard's offices
were in Conshohocken, Pennsylvania,
which is two hours from New York City.
So we decided
why not just drive over there
in Christina's beat-up...
...little Volkswagen?
We saw the Wirecard signs,
and then there was no security,
so we just walked up the stairs.
It was very large.
Really, it should maybe fit 600 people...
- A lot, yes.
- ...but there were maybe 30 people.
And then they asked us what we wanted,
and we said that we wanted to speak
to someone about buying prepaid cards.
He assured me that it's all very easy,
I could give those cards to who I wanted.
It's not a problem.
And then he said I could even get cards
up to $150,000
on a single card.
This was a massive shock.
And when we checked on the dark web
to buy prepaid cards that are
being resold on the dark web,
the most you can get is $10,000.
Fall of 2018,
where I finally just pinged Dan McCrum.
And said, "Hey.
We're looking at Wirecard in the US."
"I think we have something here."
Fahmi wasn't
the only short seller who contacted me
after Wirecard entered the DAX.
I was bombarded
with ideas by short sellers.
Some of them were obsessed
with money laundering.
Others were convinced
that Wirecard's business couldn't be real.
The problem was
that none of them had any proof.
They were all theories,
but then... when was it?
Sort of one Monday morning in October,
I get this funny email from Singapore.
Criminal behavior
at a big financial company.
Wirecard.
And so I get in touch
with Stefania Palma in Singapore.
In Singapore,
Wirecard was just absolutely pervasive.
Thousands of shops,
and merchants, and hotels
were using Wirecard's card machines.
Dan became aware
that there was a potential whistleblower
who had a lot of information
and was very keen
to speak to us as soon as possible.
The first meeting was at Changi Airport.
Going in,
I knew very little of who I was meeting.
I was definitely very cautious.
I found out his real name is Pav.
He'd been the head of legal
for Asia at Wirecard.
He had recently left the company
and was full of frustration and anger
in terms of what he had witnessed.
It was an extremely intense conversation
that lasted hours.
I realized the overwhelming volume
of information that he had.
I immediately gave Dan a call and said,
"This could be immense for us."
"I hope
that all of this checks out
because if it does,
we're just sitting on gold."
Okay. Holy shit.
This sounds like the real deal.
I think I need to come to Singapore.
We met out in the open
underneath Wirecard's old building.
We were extremely paranoid
about Wirecard's hacking capabilities.
We sort of relied on the fact
that the fountain covered the noise.
And he literally starts drawing diagrams
of how Wirecard works
and who the people are.
And then he explained
how he started working for Wirecard,
he gets contacted
by this woman on the finance team,
and she tells him this incredible story.
She'd been called into a room
in the Wirecard offices
with the rest of the finance team.
And her boss is this Indonesian guy
called Edo Kurniawan.
And he's really young
for the job. He's only 33.
And if you looked at his CV,
there's basically nothing there.
But somehow he's running
the Asian finance team,
and that is, by the way,
a very significant portion
of Wirecard's business.
So this woman goes into the meeting,
and suddenly, what Edo does,
is he starts drawing on a whiteboard.
And he's explaining
how they're gonna cook the books.
Almost like that scene where they're like,
"Here's the bank
and you guys will go in here,
and the van will be waiting outside."
Like a bank job.
And so she goes and tells Pav,
the lawyer in Singapore, about it.
Immediately Pav says,
"Right. We better look into this."
Within a matter of weeks,
there's a full-blown
internal investigation going on.
None of Wirecard's top brass
know anything about it.
And they start finding
all of these dodgy transactions.
So, Pav put together this presentation
for the key guys in Germany.
"Look at what we found."
Suddenly the message comes back
from Munich,
"Good work, guys.
We'll take it from here."
"Yeah. So we're gonna put Jan Marsalek
in charge of it."
It becomes clear very soon
that nothing's gonna happen.
And then Pav gets forced out,
but he takes copies
of the inbox of this guy Edo
and gives it to us.
Seventy gigs worth of data.
As soon as I got back from Singapore,
we knew we had to think about security.
We were very aware
that Wirecard was spying on us.
Dan had to operate in complete secrecy.
We were basically acting
on the basis
that anything on the FT network
was at risk of being compromised.
We got Dan set up
with an air-gapped laptop,
which had the modem ripped out
so that it can't be hacked.
So this pile of documents from Pav,
that went on the super-secure laptop.
So every morning, I have to sign out
the key to the big safe.
The key was about that long, which
gives you a sense of how big the safe was.
It was like a giant fridge.
Get out the laptop
and the files that I'm working on,
then go into my own little bunker.
A little room
in the middle of the building in the FT...
and start going
through the material we've got.
Six weeks of every day,
laptop out the safe,
go through all the emails, print them off,
try and work out what's going on.
Okay, right. That's the time.
Close it down again. Back in the safe.
Start again the next day.
I was just following trails
through the emails.
Sticking keyword searches
into Outlook, like "India," "Marsalek."
I had been puzzling
about this company for years
and suddenly...
it was like I was inside.
I was also trying to get Jan Marsalek.
I'd never met him.
I'd never spoken to him,
but I knew he was the enemy.
I just was looking
for anything to try and tie him
to what had happened in Singapore.
I could sort of see
he was always at the edge of it.
Like he was involved,
but I couldn't quite prove it.
But what we can do is we can boil it
just down to Edo Kurniawan,
this guy in the finance team.
But if Wirecard had fired this guy,
Edo, then we didn't have a story.
Edo was there,
and he was working on the audit.
It had to be a cover-up.
It goes up online.
Within seconds,
the Wirecard share price crashes.
In the space of three days,
we've knocked eight billion euros
off the value of the company.
Holy shit. The story's working.
That was the first moment
where I felt
that this could get really ugly.
I only heard about
the Financial Times' coverage secondhand.
NEW ATTACK ON WIRECARD
It was the typical bias.
They said, "It is a foreign conspiracy
against a German company."
"A German company is the victim
and must be protected."
Wirecard had hired
a famous lawyer in Bavaria.
The lawyer said
to the public prosecutor, Baumler-Hosl,
that Wirecard is under attack
by short sellers
and its very existence is in jeopardy.
Hildegard Baumler-Hosl contacted
the German financial regulator.
The regulator BaFin then said,
"We need to protect Wirecard."
And banned short-selling
of Wirecard shares.
And even filed criminal charges
against Dan McCrum and Stefania Palma.
And I was shocked,
and I called Dan immediately and I said,
"Dan, what the hell is going on?
What is this?"
BaFin,
the German Financial Regulator,
comes out and goes,
"We're going to look
into market manipulation."
What does that mean that they have?
Because we haven't been contacted by them,
we didn't know what the evidence was.
So it's like, "Well, okay.
What's been cooked up to say I'm a crook?"
Because I just don't understand
what's happening here.
I think at the very beginning,
I just truly could not believe that
after all the work we'd done,
that we would become the targets.
When you have the regulator one of
the most powerful financial markets
in Europe
sending a very clear sign
that they're coming for you,
you can either let that get to you,
or you try to sort of channel
all that rage and frustration
into the investigation,
really hitting the story, you know,
the hardest you ever have.
And I think you know
which option we went for.
I'm back in London in the bunker,
carrying on working.
I'd been looking
through Wirecard's customers,
and I started to realize
hundreds of millions of euros
of Wirecard's business
were provided
by just these three partners.
Al Alam, Senjo, and PayEasy.
At that point in time,
these three partner businesses contributed
to something
like half of Wirecard's global sales.
One of these partner businesses
was in the Philippines.
Uh, a business called PayEasy.
On paper, PayEasy was
this very important business to Wirecard.
We say to Stefania, "We need to find out
what is going on. Is this real?"
I remember going to this office
covered with logos of both PayEasy
and a bus company called Frhlich Tours.
There were drivers coming in and out.
It was clear
that the day-to-day operations
were, in fact, just the bus company.
This looks fishy.
I ended up driving
three hours north of Manila
in this region
that is actually famous for rice fields,
chasing after a company called ConePay,
another partner business for Wirecard.
And we finally find this address.
Someone's house.
This middle-aged man opened the door,
and the first thing I see is a table
with a brown Pomeranian
and a small white dog.
There were a couple
of middle-aged Filipino men
who were just grooming
these dogs.
Is this the headquarters
of a payments company?
It was obvious we were standing
in the middle of a family home,
at which point someone remembers,
"Wait. We got this in the mail,"
and they hand me an envelope.
I take the paper out and immediately see
Wirecard Bank letterhead,
ConePay,
and the address where we were standing.
I froze completely, and I remember shaking
because I knew at that point
that we had cracked the whole thing.
I'd spent years trying
to solve this puzzle.
What is the deal with Wirecard's business?
Is it doing all this money laundering?
Is it juicing its profits?
And suddenly, you're like,
"Holy shit."
"The whole thing's fake.
None of it's real."
It's just this incredible bluff.
They came up with this deepfake...
where they were using
these three business partners
to just invent a whole load of business.
From the outside,
it looked like a real company.
Thousands of people
thought they were working
on a legitimate enterprise.
It was the emperor's new clothes.
There's been a fresh report
from the FT,
and they're talking
about half of your worldwide revenue
and almost all of your reported profits
effectively coming
from three opaque partner companies
in recent years.
We do not get distracted
by all of this noise.
This financial thriller
continues with the latest punch-up
between Wirecard and the Financial Times.
Dan McCrum, for us, was the devil.
He kept on bringing things out
that made the stock price go down.
In February,
there were new articles and allegations
and the share price fell again.
At the end of March,
new accusations were published
and the share price collapsed once again.
A BILLIONAIRE ON THE DEFENSIVE
Senior management
at Wirecard very quickly said
that the basis of this report
was completely without merit.
There is a claim
that the Financial Times
deliberately caused the fall
in the Wirecard share price
so that speculators could cash in.
We thought
Dan McCrum was making a quick buck.
They were the bad guys,
and we were the good guys.
- Sound running.
- Okay. Let's start.
How do you personally go about scandals,
confusion, chaos?
Have you ever thought about resigning?
I've never thought
about resignation.
Can you exclude the possibility
of more dirty laundry airing
that will put the share price
under pressure?
We firmly reject
these serious allegations.
We think these allegations
are mainly market speculations.
At that point,
the FT had run a series
of really quite damaging allegations,
but Wirecard's share price just seemed
to go up and up and up.
People loved the company.
At the Frankfurt stock exchange,
Wirecard has announced its annual results,
increasing its profits by 35%,
an increase of 350 million,
and says it will continue
to grow this year.
Following a move
from the payments giant Wirecard,
shares jumping more than 6% there
after the company landed
a one-billion-dollar investment
from Japan's SoftBank group.
SoftBank investing a billion dollars
in German FinTech company Wirecard.
When news
of the SoftBank investment emerged,
we were dumbfounded.
In exchange for a 6% stake,
SoftBank will help the firm expand
to Japan and South Korea.
We couldn't believe it.
You know, we had put
what we thought was clear evidence
that this was a fraud on the table.
But SoftBank were about
to give this company 900 million euros.
At that point with Dan,
I started discussing
how we were going to actually present
evidence that was overwhelming.
This is a criminal enterprise.
So, Wirecard had to do something...
to stop us.
The next day,
I get a letter from Wirecard saying,
"We've got this tape recording
of this guy called Nick Gold,
and he knows that the FT story is coming,
and you're clearly in cahoots,
and you're corrupt."
My first thought was,
"Okay. Uh, this has to be a setup."
"This has got
to be Marsalek's dirty tricks again."
I had no idea who Nick Gold was.
I am Nick Gold.
Catch! That's it!
I'm an investor.
A bad investor, but an investor.
I first met Nick Gold by chance.
Gary Kilbey was having drinks
to celebrate his 60th birthday,
and Nick Gold was there.
I remember Paul Murphy.
We were both getting drunk together.
He told me if I needed a journalist,
and I had a story to report, he was one.
Drink as much as you can take, here!
And I phoned him months later,
and said, "Can I see you?"
He says, "I can't do it for two weeks,
'cause I'm stuck on Wirecard."
The minute he said,
"I'm stuck on Wirecard,"
I knew this was a no-brainer scenario.
He'll bring something out.
It can't be positive,
therefore this is free money.
I have to short-sell this company
within an inch of my life.
Which I did to the tune
of hundreds and hundreds of millions.
I've now taken a huge short position
in Wirecard,
which is probably known to them.
They're going to see
who the big shorts are.
So they now know Nick Gold
is a massive short seller.
I'm then on a beach in Cannes,
dancing on tables
and being a lunatic as I am,
and having a great time.
And somebody comes up to me
that I haven't seen in years.
He's a football agent.
I've known him forever.
He worked for me years ago,
and he says he's now gotten
the Kuwaiti National Investment Fund
and they're his partners
and he's got billions of pounds,
they'd like to invest in the stock market.
So could I help?
A few days later, I fly back to London
to meet the Kuwaiti Investment Fund.
Well, what happened is
a magnificent sheikh walked in
and his spokesperson next to him
walked in with my football guy,
and they sat down.
'Cause I'm with my friend,
I thought I could speak openly.
I then tell him there are billions
to be made short selling Wirecard.
And I know the company's going down
because the Financial Times
are writing an article,
and the company is fraudulent,
and that we were going
to build great big ships together.
This was as sheikh as you get.
He stank of affluence.
The man stank of money.
You could tell this is a proper sheikh.
As it turns out, I was wrong.
The sheikh left, and the guys stayed
to facilitate for the sheikh,
and I was left with those two.
- Hey. I'm Nick Gold.
- Hello, Nick. How are you?
What sort of size business
were you thinking of doing?
At the moment,
they are looking at investing 50 million.
Okay.
There was a short seller, Nick Gold,
who met with an investor
who secretly recorded him.
This is as good as it gets in terms of...
- We know the article's coming.
- Okay.
And I bet it's gonna be today.
We know now that this investor
was actually a private detective
who was hired
by someone associated with Wirecard.
So what Wirecard did was...
The sheikh wasn't real. It was fake.
The friend of mine,
that paid the guy four million,
he got my four million by the way,
that bastard.
Then I got a text message
from Paul Murphy saying,
"What the fuck have you done?"
This was a complete setup.
Oh, I was furious, absolutely furious
because Wirecard's found a way
of presenting evidence
that appeared to show
that I personally was in cahoots
with a guy
who was making money shorting the stock.
Within hours, all this detail
is in the hands of the German press,
who are writing articles saying,
"Here's clear evidence
that the FT's corrupt."
I was pretty pissed off,
actually. Pretty pissed off.
I was confident that we'd been set up,
but I have to protect
the reputation of the FT.
You know, I thought,
"Paul you're a brilliant reporter,
but you've done something really dumb."
"You're gonna have
to spend time in the sin bin."
And that meant
a rigorous external legal investigation
to show the world
that there was no truth in that.
That was the first time
that I really felt vulnerable.
You know, we were basically suspended.
So we have to sit and wait
for this investigation to happen.
But then the story gets weirder
and weirder.
I'm Jorg Schmitt
from theSddeutsche Zeitung.
I'm the chief editor
of the investigations team.
I was at my desk when I suddenly
got a call from an unknown number.
On the other end was a young woman.
She said,
"Are you interested in Wirecard?"
"Do you know Prinzregentenstrasse 61?"
"It's the secret office of Jan Marsalek."
Even colleagues closest
to Marsalek didn't know
that there was this second office
in the Prinzregentenstrasse.
He would meet
with a very illustrious circle of people,
do business, and host wild parties.
It's Marsalek's boy gang, I'd say.
We always find Martin W.,
who had been
in the Austrian secret service.
El-Obeidi,
a former Libyan intelligence officer.
Stani, a Russian who was supposedly
in Munich visiting his sick mother,
but we think he was probably an FSB man,
a Russian secret-service agent.
So suddenly
we had three former intelligence agents
who were in and around
the Prinzregentenstrasse.
And the thing is the Prinzregentenstrasse
is not just anywhere in Munich.
It is directly opposite
the Russian consulate.
There is obviously
a secret-service connection.
That electrified me.
Why might Marsalek be so interesting
to intelligence agencies?
Wirecard is a company
through which there are billions
of transactions every year.
And these payments are gold mines
for the secret services
because they show who could be compromised
because their creditcard information
could show porn usage,
brothel visits, or whatever else.
To have a source like Marsalek
who is always
on the move around the world,
that makes a lot of sense.
When the news came through
that Paul had been suspended,
Paul pulled me aside and basically said,
"Both Braun and Marsalek are Austrian."
"Ask around.
See what you can find in Vienna."
Someone recommended this politician
that was looking
at all kinds of political-corruption stuff
going on in Austria.
Stephanie Krisper.
Vienna is sadly mostly
an inviting terrain
for intelligence officers,
for dubious characters,
spies, economic spies.
We met on a boat in the Danube Canal.
I just sort of said,
"Do you know Jan Marsalek?"
She sat back a bit and pondered.
She knew someone that knows Jan,
but she had to be very careful
because he was fearful
of who Jan was involved with.
And so we arranged
to meet him at Caf Pruckel.
Stephanie walked in
and introduced me to this friend of hers.
What followed were probably
the most remarkable 20 minutes
in my short 14 years in journalism.
My name is Killian Kleinschmidt.
I'm a German National.
I've been working with the United Nations
on issues of migration and refugees.
I mean, that's something I know.
Um, how to deal
with large numbers of people on the move.
2016, Austria is building up
to the elections.
Um, I received an email
asking me whether I would be interested
to work on a project with Jan Marsalek.
I didn't know who that was.
I did not even know Wirecard.
A few days later,
we met in the famous restaurant,
the Kafer in Munich.
Extremely eloquent, smiling,
the Austrian smart-ass,
very smooth talker.
He stressed that he was very interested
to do a project in Libya.
Crossing the Sahara
in search of a better life,
these migrants are bound for Europe.
And this is where their long ride begins,
several days' drive
from the Libyan border.
He stressed this knowledge of Libya,
where he said he had been several times,
but that his real interest
was really to contribute
to the stabilization of Libya.
He presented himself as doing good work.
So we agreed that he would put in
200,000 euros to finance my team,
working with refugee camps in Libya.
It was fantastic. We liked it.
The relationship with Marsalek
was managed by two persons.
Wolfgang Gattringer, who used to work
in the Austrian Ministry of Interior,
and Brigadier Gustenau
from the Ministry of Defense of Austria.
Then popped up Colonel Andrey Chuprygin,
the former secret-service officer
from Russia.
He is presented not only as the guy
who works with Jan,
but also the guy
who coordinates Russian interests
in the Middle East and North Africa.
There should have been alarm bells.
In mid-February, we meet Marsalek
in the Prinzregentenstrasse,
just opposite
the Russian General Consulate in Munich.
It's an empty place. It's an old building.
Nice pieces of art.
There is Marsalek talking to Gattringer
and Gustenau and he said,
"I want to train and equip
a border-guard force
of 15, maybe 20,000 men in Libya."
Basically preventing people in distress
from crossing the border.
This is all very bad.
Border security in Libya was a topic that,
for a COO of a company like Wirecard,
wasn't normal in the slightest.
As time went on, I asked myself,
"What does he want in Libya?"
"And why does he seem
to be getting support
from within the Austrian government
for a project
that doesn't have humanitarian aims?"
For me, then that all clicked.
Migration is the theme which makes you win
or lose elections in Europe.
If you ignore negative trends
or if you let immigration go unchecked,
things will go downhill very quickly.
Jan Marsalek was acting as the in-between
for the Russians
and for the right-wing populist parties.
It is logical that if Russia
wants to destabilize Europe,
they would try to create anxiety
over supposed waves of refugees
to create a narrative
that heats the debate again.
Marsalek has very good contacts in Russia.
That's why it's plausible
that Jan Marsalek could have been trying
to set something up for the Russians.
My mind was going
at a million miles an hour.
It was clearly bonkers.
The COO of a German company
is not supposed to be involved
in encouraging
disruptive right-wing parties
to capitalize on migration problems,
or recruiting militiamen.
The idea would be crazy
were it not for the fact
that I just felt it rang true.
So Sam starts finding
about all these insane Russian links.
Now, we have to be, like,
state-security-level paranoid.
We're not even putting anything
in digital.
It all has to be handwritten,
and don't talk on the phone.
Paul heard about 28 private detectives
who were wandering around London,
following people.
I went after
the private investigators'
spying operation.
That led us to discovering
that the person bankrolling this operation
was a former Head of Foreign Intelligence
for the Libyan transitionary government.
Rami el-Obeidi.
We did know that Marsalek had interests
in Libya by that point.
Whoever hears the words,
"Libyan spy chief," and thinks,
"Oh, right. Yeah. That's totally fine"?
And so I'm sort of leaving the house
looking for cameras,
leave the office at different times,
catch different trains.
I'd be on the Tube,
you'd reach your stop and then you wait
until just before the doors close.
Then I'd jump out and sort of like,
"Did anyone else get off with me as well?"
That was the moment
when I felt nervous about my family.
This is Freddy McCrum, age three days.
That's what you worry about.
Because you'd do anything
to protect your children.
And the idea that you would put them
in danger for some story...
I mean, who wants to do that?
Um...
It's criminal to wiretap journalists.
It's criminal
to hack their email accounts.
The worst part was that this intimidation
was quite successful.
The Financial Times had launched
an internal inquiry into Dan McCrum,
and Wirecard made the most of this time,
and its market price kept rising.
They even got the German Chancellor
to promote the company in China.
All this happened in those months
when the Financial Times
didn't write anything critical
of Wirecard.
I went through a torrid time.
I wanted to get back at them.
I was livid.
Soon as the investigation was over,
when we get a clean bill of health,
I called in Paul and Dan.
I said, "The next story,
I want you to draw blood."
We had to find a way
to make it absolutely clear to everybody
that Wirecard was a fake.
We were angry,
and there was no hanging back.
It was the whole enchilada.
Wirecard is a fake,
its business isn't real,
and Markus Braun is lying to you.
And here are the documents that prove it.
This is how it is doing the fakery.
Here are the partners that don't exist.
Here are the customers who don't exist.
Here is everything you need
to switch on the blue lights,
go down to Wirecard HQ,
and arrest everyone.
The Financial Times suggest
that you've routed billions of euros
in payments
- to 34 names...
- Mm-hmm.
...through a partner company
in Dubai at Al Alam Solutions.
According to the FT,
more than half of the clients
have never heard of Al Alam.
Let me give you
a clear statement here.
This information is not authentic,
how it was presented by the FT.
We can completely reject
these allegations.
Dan McCrum's reporting
at the Financial Times,
of course, made us uneasy.
However, I just didn't have any visibility
of any transactions
in the Middle East or the Philippines.
It didn't really make sense to me
that they couldn't exist.
It was painful
because this is something you believed in.
We believed
that we had put a hole in Wirecard
that would bring the business down,
but it didn't come crashing down.
But this latest evidence
from the FT was difficult to ignore.
Now Wirecard has categorically rejected
the allegations of impropriety.
But on October 21st,
Wirecard appointed KPMG
to conduct a special audit,
just to confirm that they have not engaged
in any improper accounting practices.
Dr. Markus Braun, you've decided
to carry out an external audit
due to the allegations
that the FT have made.
The question is, "Why only now?"
Well, we reacted very quickly.
The newspaper article was published
only over a week ago.
At first, Braun didn't want this inquiry.
We reject these allegations 100%.
People at Wirecard must have known
that this is going to be troublesome.
When will the auditors present
their report?
I don't want to jump the gun,
but we think within a few months.
We believe
we will have results very quickly.
Holy shit. The story's working.
Finally, you know, we had an impact.
They haven't been able to brush it off.
There's been enough pressure
from their investors
that they've had
to appoint KPMG.
It felt like the stakes were high
at that point.
My name is Joachim Giehl.
I am Markus Braun's neighbor.
I always had the impression
that this man is under
a massive amount of pressure.
He greeted nobody as his neighbor.
He always just got in his car.
No hello, no nothing.
There was one day, around 8:30 p.m.,
I parked my car in the garage.
It was dark, and I saw Markus Braun
at the entrance to our building.
I saw him in the lamplight,
and he looked extremely tense.
He was surrounded by some men
whom I didn't recognize.
They seemed out of place.
They didn't look like businesspeople.
They looked like people
who work as security, bodyguards,
a group of thugs...
...or people like that.
They didn't look
like they were there to protect him.
Rather, I thought they were there...
...to do a job.
Dr. Markus Braun
and Jan Marsalek's relationship
definitely deteriorated.
In December 2019,
we had a Christmas party for our team,
and Jan Marsalek arrived
somewhat unexpectedly.
And then he said... in a smiling fashion,
"Martin, if you stole 100,000
from the company,
I would not have respect for you."
"If you're gonna steal it
from the company,
you have to steal millions,
hundreds of millions."
While this was happening,
Braun comes up with this fantastic idea.
His biggest yet.
The plan was to take over Deutsche Bank,
Germany's biggest bank.
It was called "Project Panther,"
a plan for a hostile takeover.
A large consulting company
put a document together
which showed how it could make sense
to merge an old bank
with a new tech company.
The "Wirebank,"
or whatever it would have been called.
The idea was
if you merged these two companies,
with the Deutsche Bank balance
being so much bigger than Wirecard's,
that then maybe the fraud at Wirecard
would somehow get swept under the rug.
If you've got a bank like Deutsche Bank,
you can hide a lot of bad numbers
inside a bank that big.
It's sort of genius, really.
It's a bit like instead of having
a getaway car,
it's just gone into the bank
and taken over.
And if they'd done that, you know,
Markus Braun would have been
the genius financier,
who was now running one of the
world's largest financial institutions.
It was essentially
Braun's last roll of the dice.
Wirecard's existing auditors, EY,
were taking extra steps
to check that 1.9 billion of cash,
which Wirecard claimed, actually existed.
Wirecard essentially said
that 1.9 billion euros was sitting
in two Philippine banks.
On this occasion,
the auditors wanted real proof
that Wirecard had access
to the money it claimed,
which, of course, Wirecard couldn't do
because the money didn't exist.
So everybody wanted to know,
would EY find out the truth?
That night, I couldn't sleep...
because I wanted to be prepared.
Whatever I could get my hands on,
as far as shares of Wirecard,
I got it because, you know, in my gut,
I knew it was going to happen that day.
We got close to 100 million
at the, you know, peak of Wirecard
until I ran out of shares to short.
That morning,
I'm up at six o'clock
waiting for something to happen.
Suddenly this announcement pops up.
Auditors can
no longer locate 1.9 billion
that are said to be
in escrow accounts in Asia.
The two banks
in the Philippines
where the 1.9 billion was supposed to be
said today
that they had no business relations
with the payments processor.
The documents were faked.
As soon as I saw that,
I just knew it's completely game over.
The share price crashes.
The short sellers can all see it.
They start selling
every single Wirecard share
they can get their hands on
and finally make a fortune from it.
How do you simply miss
a couple of billion dollars?
The share price plunged by 70%.
Fucking hell. We did it!
You know...
...I mean, we did it.
We finally got those bastards.
When you make money,
obviously it's great.
You know, we're happy for our investors
and it's a huge win.
Our satisfaction,
the excitement is in the hunt,
but Wirecard was our biggest winner,
and I suspect it'll be our biggest winner,
um, for a long while.
Ladies and gentlemen,
on behalf
of the management board of Wirecard,
I would like to give
the following explanation.
The press conference that night
was like The Muppet Show.
Braun reads from the teleprompter.
The death sentence
has already been handed out,
and he's still making it seem
as if he's going to announce
an amazing quarterly report next month.
Right now,
it cannot be ruled out that Wirecard
has become the damaged party
in a fraud case
of considerable proportions.
Within a week,
Wirecard has been placed
into administration. It's gone bust.
Former CEO of Wirecard
has been arrested
on suspicion of falsifying accounts.
And Markus Braun has been arrested.
But Jan Marsalek just disappears.
Where is the COO
of the insolvent payment processor,
Wirecard, the Austrian, Jan Marsalek?
Wirecard's former
Chief Operating Officer, Jan Marsalek
may have returned to the Philippines.
He arrived on June 23.
That was two days ago
and left yesterday morning
bound for China.
An agent always has an escape route.
We knew that Marsalek was in the office
until that Friday afternoon.
He supposedly said
he had to go to the Philippines
to clear the whole thing up.
He went for dinner
with Martin W. that evening.
Martin W., who he knew
from the Prinzregentenstrasse
and who used to be
in the Austrian secret service
together with an Austrian,
right-wing politician
booked Marsalek a flight.
Marsalek paid close to 8,000 in cash...
and then his trail disappeared.
He didn't go to the Philippines.
It doesn't make sense.
He couldn't have entered the country
because of quarantine regulations.
There are databases
where you can check flight data.
Since 2015,
he flew at least 60 times to Russia.
And there was one flight
from a small airport near Vienna to Minsk.
It's not far from Moscow.
The border to Russia is not controlled,
and that's where the trail is lost.
After that, it's just rumors.
We don't know for certain if Marsalek
was actually a secret-service informant
or not.
Jan Marsalek was
very well-connected
in the secret service parallel world,
and that's why I think he won't be
that easy to find.
We know
that he's online occasionally
via an old Telegram account.
I can check again.
He's been online every few months.
The last time was on May 27, 2021.
The German parliament has started
a political inquiry into Wirecard,
one of the biggest scandals
of the German republic.
A financial disaster for those
who invested their money in Wirecard.
It was
the first DAX-listed company to go bust.
I think that Wirecard's inner circle
who knew what was really going on
was very small.
Certainly Marsalek.
The fascinating question is,
"What did Braun know about all this?"
He wasn't emotional.
He was very tense.
And then he gave
a short opening statement.
"All I can say... is we were all deceived."
"I'm a victim."
And then his lawyer said
he won't answer any further questions.
He really sat there for three hours
and didn't answer.
Reliving the whole experience now,
I feel naive
in not having seen certain things.
I do believe, personally,
that there's a possibility he did not know
what Jan Marsalek was doing,
but I think
it was his responsibility to know.
I think so far,
we only know the tip of the iceberg.
Unless Jan Marsalek turns up somewhere
and breaks his silence,
only then will we get the full story.
If Jan's out there,
I'd love to talk to him.
I mean, I've spent years trying
to get inside his head.
Who was it
who was committing the fraud within?
You know,
what did he and Markus Braun talk about?
Was it a relief
when it came crashing down?
That's kind of interesting, right?