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July 9, 2020

US DoJ probes Wirecard for alleged bank fraud

The US Department of Justice (DoJ) is investigating the scandal-hit German payment company Wirecard’s role into a $100m bank-fraud conspiracy.

The DoJ is examining whether the company is involved in the alleged conspiracy, which is connected to an online marijuana marketplace, the Wall Street Journal (WSJ) has reported.

The Manhattan US Attorney’s office at the DoJ and the New York field office of the Federal Bureau of Investigation (FBI) are jointly examining the payment firm’s role in the conspiracy.

The authorities intend to find out whether Wirecard served as both, a payment processor and an offshore merchant bank, the report added.

According to WSJ, the authorities are considering many former or current executives of Wirecard for their possible involvement.

Moreover, according to the documents filed with the Southern District of New York, two businessmen have already been charged for the alleged bank fraud.

They have been accused of conspiring with third-party payment processors to trick US banks into approving credit-card payments for marijuana products.

This month, German prosecutors also widened their investigation into the company for suspected fraud, market manipulation and falsifying of accounts.

Reeling from a billion-dollar balance sheet scandal, Wirecard filed an application to open insolvency proceedings with the Munich District Court, last month.

Its auditors Ernest & Young (EY) said Wirecard owes ‎€4bn ($4.5bn) to creditors after it admitted that €1.9bn ($2.1bn) had gone missing from its books.

The scandal led to the arrest of former Wirecard CEO Markus Braun.

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