Former Wirecard chief executive Markus Braun has been accused by Munich prosecutors of committing multi-year fraud and arrested a second time after the June collapse of the German payments group.
Prosecutors now suspect Wirecard’s accounting fraud started in 2015 when Braun and other suspects allegedly agreed to inflate Wirecard’s income in an attempt to mislead investors.
Once a standard-bearer for Germany’s tech sector, Wirecard collapsed last month after acknowledging multi-year accounting fraud and warning that the € 1.9bn of cash on its books probably “didn’t exist.”
Investigators have expanded their investigation into the company’s fall to include other former executives, prosecutors said during a press conference on Wednesday.
A Munich judge revoked Braun’s € 5m bail after the investigation against the former chief executive and other former Wirecard executives was expanded.
Former Wirecard chief financial officer Burkhard Ley and the group’s chief accounting officer Stephan von Erffa were also detained, a spokeswoman for the Munich prosecutor’s office said.
The new arrests mean that four Wirecard employees have been detained by the German authorities. Earlier this month, Oliver Bellenhaus, the head of a Dubai-based Wirecard subsidiary in the center of the fraud, reported to Munich prosecutors. A Bellenhaus attorney said last week that Bellenhaus “faced individual responsibility, unlike others.”
Jan Marsalek, the former director of operations, is wanted under an international arrest warrant. Braun has previously denied wrongdoing.
Prosecutors say banks and other investors in the following years allocated € 3.2 billion to Wirecard. “Due to Wirecard’s insolvency, those funds are likely to be lost,” the spokeswoman said. “In the interrogations, we were told of a strictly hierarchical system that was shaped by esprit de corps and pledges of loyalty to the CEO as leader.”
Prosecutors said a suspect had become a primary witness and that this person’s cooperation had helped significantly advance the investigation.
