Adjudicated DE DAX

Wirecard AG: 1.9 Billion Euro Fictitious Cash Fraud

German DAX-30 payments firm Wirecard fabricated one quarter of its consolidated balance sheet (1.9 billion euros), falsely claiming the cash was held in trustee escrow accounts in the Philippines.

CASE PROFILE & BENCHMARKS

Target Issuer: Wirecard AG (DE).
Fraud Period: January 1, 2015 to June 18, 2020.
Reported Overstatement: $2.1B.
Total Fines & Penalties: $0.
Maximum Incarceration: No prison sentence.
Independent Auditor: Ernst & Young LLP.
Primary Schemes: fictitious cash and assets, fictitious revenue, audit failure.
Enforcement Status: ADJUDICATED (contested).

OVERSTATEMENT $2.1B EUR reported

TOTAL PENALTIES $0 Civil & disgorgement

PRISON TIME None No prison sentence

FIRST ACTION June 22, 2020 Initial proceeding

DETECTION METHOD Investigative Journalism (Dan McCrum, Financial Times) & KPMG Forensic Audit Discovery source

PRIMARY REGULATOR Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) DE

ACCOUNTING MECHANICS FOR THIS CASE

HOW IT WAS DONE

The regulatory record states Wirecard reported massive growth through 'Third-Party Acquiring' (TPA) partners in Dubai, Singapore, and the Philippines. Because Wirecard supposedly lacked local processing licenses, these TPAs collected customer funds and deposited profits into trustee escrow accounts. In reality, the TPA volumes were completely fabricated. When KPMG and subsequently EY attempted to confirm the bank balances directly with BDO Unibank and BPI in the Philippines, the banks revealed that the confirmation letters were forged and the accounts did not exist.

Applicable Scheme Classifications:

fictitious cash and assets → fictitious revenue → audit failure →

CHARGED RESPONDENTS & OUTCOMES

3 NAMED PARTIES

Respondent	Role	Disposition & Judicial Outcome	Prison	Civil Penalty	O&D Bar
Wirecard AG	ISSUER	Filed insolvency in June 2020; DAX index member wiped out completely.	None	$0	No
Markus Braun	CEO	Arrested by Munich prosecutors, placed on criminal trial for commercial gang fraud.	None	$0	BARRED
Jan Marsalek	OTHER	Fled Germany via Austria and Belarus; Interpol Red Notice issued; fugitive.	None	$0	BARRED

RED FLAGS OBSERVED PRIOR TO DISCOVERY

EARLY SIGNALS

CASH FLOW TO NET INCOME DIVERGENCE 2018 Massive reported profits while company repeatedly raised debt to fund operations AUDITOR CHANGE FREQUENCY 2020 KPMG special audit refused to certify authenticity of Asia revenues DAYS SALES OUTSTANDING SPIKE 2019 TPA receivables stretched to over 240 days with zero physical cash withdrawals

ENFORCEMENT ACTIONS & PRIMARY DOCKETS

PRIMARY SOURCE CITATIONS

foreign regulator WA 21-Wp 5410-2020/0002

Filing Date: June 22, 2020

BaFin Special Accounting Enforcement Order: Wirecard AG

German BaFin ordered special accounting examination following audit qualification and missing €1.9B.

Provisions: Securities & Corporate Law Compliance

Disposition: neither admit nor deny View Primary Record ↗

Source: German Federal Financial Supervisory Authority (BaFin) & APAS • Official Jurisdiction: DE • Licence: Official Work (§ 5 German Copyright Act / UrhG), reproduced with attribution

TIMELINE OF EVENTS

CHRONOLOGY

January 30, 2019 • Press Investigation

Financial Times publishes Dan McCrum's investigation into forged contracts at Wirecard Singapore.

April 28, 2020 • Audit Report

KPMG publishes independent forensic audit stating it could not verify existence of €1B in cash balances.

June 18, 2020 • Audit Refusal

EY refuses to sign 2019 accounts; Wirecard acknowledges €1.9B in cash likely does not exist.

June 25, 2020 • Insolvency

Wirecard AG files for insolvency with Munich district court.

FINANCIAL CRIME REFERENCE SERIES

Cross-Domain Investigation Network

Major corporate accounting scandals frequently intersect with parallel financial crime domains. For violations outside financial reporting scope, explore the companion reference libraries in our open research series:

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Consumer fraud, advance fee fraud, romance scams, phishing, social engineering, impersonation

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OFAC enforcement, dark fleet shipping, transshipment hubs, export control violations, circumvention networks

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Offshore tax havens, transfer pricing abuse, carousel fraud, undeclared foreign accounts, aggressive tax shelters