Economy

Bank fraud in the USA: This is the role Wirecard played

Peter Kneffel, picture alliance via Getty Images

Oliver H. is sitting in the courtroom in New York on March 8th and reads out excerpts from chat logs and e-mails at the request of the prosecutor. It becomes particularly uncomfortable when the F-word is used in the chats with the two defendants. Oliver H. is the main witness for the New York prosecutors in a trial in which a German and an American are charged with bank fraud. We have been reporting on the case and the evidence of Wirecard’s involvement in alleged fraud since November 2020.

Oliver H. not only shares his first name with the Wirecard key witness Oliver B. of the Munich public prosecutor’s office, but also unique insights into Wirecard’s business, which the USA is now investigating. Accordingly, the lawyers of Marsalek confidante Hamid “Ray” Akhavan tried to obtain that files from his iPad and cell phone would not be included as evidence. Unsuccessful – because Oliver H. was not only involved in the alleged bank fraud from the start, but has also been cooperating with the FBI since October 2018. Several clues, such as Akhavan’s friendship with Jan Marsalek or the offer of a deposit payment from a Wirecard manager to Ruben Weigand, as well as questions about the summons to Wirecard, suggested that Wirecard was also involved in alleged bank fraud. Now, on the first day of the trial, Oliver H. spoke about Wirecard and Marsalek.

Marijuana purchases disguised as face creams from Europe

The trial involves a large marijuana seller whom the two defendants allegedly helped cover up transactions. Because credit card providers in several US states do not want to accept payments for marijuana sales, a California marijuana dealer has found another way with the help of the two defendants Akhavan and Weigand. As we reported in November, customers paid for marijuana and received a bill from a European online shop. Instead of grass, face cream, dog food or green tea were billed. Because such a declaration to banks is a criminal offense, there is now a charge of bank fraud in the amount of 150 million US dollars.

Oliver H. now provides first insights into how he, the two defendants Akhavan and Weigand and other accomplices are said to have organized the alleged bank fraud. He also reads out the emails he exchanged with ex-Wirecard manager Jan Marsalek. Marsalek is said to have referred him to an email address belonging to the defendant Ruben Weigand. The aforementioned e-mail address plays a central role for the prosecutors, because it was through this e-mail that the marijuana dealers communicated with the payment processors from Europe.

In addition, Oliver H. explains that he should have submitted applications with false information to Wirecard for the bogus companies that were used to disguise the payments. Akhavan, Weigand, Oliver H. and their accomplices are said to have built an infrastructure of bogus companies, associated websites, customer service and initiated payment providers in order to conceal marijuana payments from credit card providers. In the formulation of the applications to Wirecard and two other payment providers who were also involved, Oliver H. is said to have received help from the two defendants.

Akhavan’s lawyers believe that Oliver H. is belittling his own role in the alleged fraud. Lawyers for the two defendants deny the allegations of bank fraud and say that there was no financial damage, only that the banks’ right to information was violated.

A proven Wirecard model

Wirecard has already gained some experience with the obfuscation of transactions in the USA. In the early 2000s, a wave of regulation hit the US gambling industry. That ultimately led to the George W. Bush administration banning online gambling payments in 2006. Wirecard recognized the opportunity presented by the ban and offered to have US payments processed by European payment providers and bogus companies. The former Wirecard manager Jörn Leogrande describes in his book “Bad Company” how Wirecard forged a business model out of the situation: “They built small online shops through which payments are processed in an unsuspicious manner,” writes Leogrande in his book. “The customer who plays online poker will only find an unsuspicious store on their credit card statement.”

Leogrande writes that between 2003 and 2006, the majority of US poker players’ deposits went through fictional flower shops. Later, when Visa and Mastercard noticed the large number of payments with flowers, according to Leogrande, Wirecard had to diversify and use additional shops: “Shops with dietary supplements, with travel tickets, or with any kind of perishable goods.”

Jan Marsalek as the head behind the illegal “flower shops”

The solution leads back to Jan Marsalek, as Leogrande describes. It was called Click2Pay and it was developed for casino payments in the USA, “and probably the reason why Jan – like many other high-ranking Wircard managers – never went to the USA in the years that followed.”

Because the scam was caught by the US authorities in 2010 at the latest. According to the authors of the book “The Wirecard Story”, a German resident in Florida is said to have acted as a middleman for Wirecard. The middleman cooperated with the authorities at the time and the name Wirecard was not used in the process. In 2020, the former Bafin boss Felix Hufeld spoke about the fact that Wirecard Bank AG had carried out prohibited transactions for US gaming providers.

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