Downloaded from YTS.MX
In Autumn 2019, I got a call from a source.
Official YIFY movies site: YTS.MX
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 Fröhlich 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 the Süddeutsche 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 Café 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?