Late in the spring of 2020, Jan Marsalek, an Austrian bank executive, was suspended from his job. He was a widely admired figure in the European business community—charismatic, trilingual, and well travelled. Even at his busiest, as the chief operating officer of Wirecard, Germany’s fastest-growing financial-technology company, he would assure subordinates who sought a minute of his time that he had one, just for them. “For you, always,” he used to say. But he would say that to almost everyone.
Marsalek’s identity was inextricable from that of the company, a global payment processor that was headquartered outside Munich and had a banking license. He had joined in 2000, on his twentieth birthday, when it was a startup. He had no formal qualifications or work experience, but he showed an inexhaustible devotion to Wirecard’s growth. The company eventually earned the confidence of Germany’s political and financial élite, who considered it Europe’s answer to PayPal. When Wirecard wanted to acquire a Chinese company, Chancellor Angela Merkel personally took up the matter with President Xi Jinping.
Then, on June 18, 2020, Wirecard announced that nearly two billion euros was missing from the company’s accounts. The sum amounted to all the profits that Wirecard had ever reported as a public company. There were only two possibilities: the money had been stolen, or it had never existed.
The Wirecard board placed Marsalek on temporary leave. The missing funds had supposedly been parked in two banks in the Philippines, and Wirecard’s Asia operations were under Marsalek’s purview. Before leaving the office that day, he told people that he was going to Manila, to track down the money.
That night, Marsalek met a friend, Martin Weiss, for pizza in Munich. Until recently, Weiss had served as the head of operations for Austria’s intelligence agency; now he trafficked in information at the intersection of politics, finance, and crime. Weiss called a far-right former Austrian parliamentarian and asked him to arrange a private jet for Marsalek, leaving from a small airfield near Vienna. The next day, another former Austrian intelligence officer allegedly drove Marsalek some two hundred and fifty miles east. Marsalek arrived at the Bad Vöslau airfield just before 8 p.m. He carried only hand luggage, paid the pilots nearly eight thousand euros in cash, and declined to take a receipt.
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Philippine immigration records show that Jan Marsalek entered the country four days later, on June 23rd. But, like almost everything about Wirecard, the records had been faked. Although Austrians generally aren’t allowed dual citizenship, Marsalek held at least eight passports, including diplomatic cover from the tiny Caribbean nation of Grenada. His departure from Bad Vöslau is the last instance in which he is known to have used his real name.
The rise of Wirecard did not occur in a vacuum. Rather, it reflected a convergence of factors that made the past half decade “the golden age of fraud,” as the hedge-fund manager Jim Chanos has put it. In the aftermath of the 2008 financial crisis, governments sought to revive depressed economies, and central banks suppressed interest rates, making it cheaper for businesses to get loans. The venture-capital and tech worlds, awash in easy money, developed a culture of selling narratives and vaporware—lofty and sometimes fantastical ideas, with no clear path to implementation. Redditors shared their yolo trades; offshore crypto exchanges posted their own tokens as collateral for multibillion-dollar loans. In late 2021, amid the investing frenzy, a CNBC guest—the author of such books as “Trade Like a Stock Market Wizard” and “Think & Trade Like a Champion,” who charges people a thousand dollars a month for “private access” to his market research—recommended a tech company called Upstart, asserting that its earnings were “very powerful” and that the company had “a good-looking name.”
“What do they do?” the host asked.
“Uh, excuse me?”
“What does Upstart do?”
“Uh, well . . . I’m, I’m . . . I’m sorry.”
“What kind of company is it?”
“Yeah, I’m not . . . You’re breaking up,” the guest said. (Upstart’s share price has since dropped by ninety-five per cent.)
It was against this backdrop that German institutions supported Wirecard. The country’s traditional industry is in cars and energy systems—BMW, Volkswagen, Daimler, Siemens. Wirecard represented the nation’s challenge to Silicon Valley, its leap into financial technology and the digital era. “German politicians were proud to be able to say, Hey, we have a fintech company!” Florian Toncar, a German parliamentarian, observed. Wirecard’s rising stock price was regarded as a sign that the business was dependable, that its critics were clueless or corrupt. The German business newspaper Handelsblatt called Wirecard’s C.E.O. a “mastermind” who had “come across the German financial scene like the Holy Spirit.” But it was not regulators or auditors who ultimately took the company down; it was a reporter and his editors, in London.
Dan McCrum often jokes that his marriage was a minor fraud—his wife met him when he was a banker, but she ended up with a journalist instead. When McCrum was in his mid-twenties, he worked at Citigroup in London for four years, “which was long enough to look around the room and think, Hang on, there’s nobody I want to be here,” he told me. One evening, he went out for dinner with a group of colleagues “and everybody was bitching about their jobs,” he said. A young woman suggested that they go around the table and share their real aspirations, most of which required years of training or an advanced degree. “And when it came to me, without hesitation, I was, like, ‘I’d be a journalist,’ ” he said. “And the woman who had asked the question just looked at me as if I were a bit stupid and said, ‘Well, you know, you can just do that.’ ”
The timing was serendipitous; eighteen months later, in July, 2008, as a fledgling reporter at the Financial Times, McCrum was sent to New York, where he witnessed the collapse of Lehman Brothers and the chaos that ensued. By the end of the year, Bernie Madoff’s Ponzi scheme had unravelled, leaving investors some sixty-five billion dollars poorer. “It felt as if we were through the looking glass,” McCrum recalled. “If a fraud of that magnitude was hiding in plain sight, then anything could be fake.”
In the summer of 2014, McCrum was casting about for story ideas in London when a hedge-fund manager asked him, “Would you be interested in some German gangsters?” He added, “Be careful.”
In 2000, a year after Wirecard was formed, it nearly imploded—partly because it had hired Jan Marsalek to oversee its transition to the mobile era. “The first warning sign was when the company’s systems crashed and Wirecard’s engineers traced the problem to Marsalek’s desk,” McCrum later wrote, in a book called “Money Men,” from 2022. “In an ‘accident,’ he’d routed all of the company’s internet traffic through his own PC, rather than the dedicated hardware in the server room—a set-up ideal for snooping.” But Marsalek, a talented hacker, couldn’t be fired; his job was to rebuild from scratch the software that the company used to process payments, “and the project was too important and too far along to start over with someone new.”
Around the same time, a German businessman named Paul Bauer-Schlichtegroll was trying to move into online payments, focussing on pornography. There was no shortage of demand, but it was the end of the age of dial-up Internet, and Bauer-Schlichtegroll’s payment systems were clunky. When he learned that Wirecard could process credit- and debit-card transactions, he offered to buy it. Wirecard refused. But the company was struggling, and after its offices were burglarized it became insolvent. Bauer-Schlichtegroll bought what was left of it for half a million euros.
In the early two-thousands, Wirecard’s company culture resembled that of a frat house. Marsalek took new hires for bottle service at night clubs, and sometimes sent clients back to their hotels with models in tow. When Wirecard signed a live-streaming porn service as a client, Marsalek’s colleague Oliver Bellenhaus, who often played Call of Duty at the office, hooked up his laptop to a TV and paid for a private session. It was ten-thirty in the morning. “Touch your nose,” Bellenhaus and another salesman instructed a topless woman onscreen, to test if the service was really live. The woman complied; the men burst out laughing, and carried on with more orders, as colleagues filed by. “Touch your nose” became a running joke at the office.
Wirecard’s new C.E.O. was a tall, somewhat awkward consultant from Vienna named Markus Braun. He lacked Marsalek’s charisma and affability, but he claimed to have a Ph.D. in social and economic sciences, which gave outsiders the impression that he was a quiet visionary. Under his leadership, Wirecard expanded its payment processing to the world of online gambling—legal in some jurisdictions, prohibited in many others. Wirecard skirted rules by acquiring companies in other countries and routing payments through them. “By allowing third parties to serve as the primary processor or acquirer, Wirecard is not directly identified” by Visa or Mastercard, a critical investor report later noted. “Some of these partners may ultimately lose their own license, but Wirecard’s remains intact.”
The core tenet of the business was that for anything to be sold there must be a way to pay. The fewer the options for payment, the higher the fees; the higher the legal risk, the more complex the transaction.
In 2004, Bauer-Schlichtegroll saw an opportunity to transform Wirecard into a publicly listed company, whose shares could be traded on an open exchange. He bought a failing telephone-service provider that was listed on the Frankfurt stock market. With the help of lawyers, Bauer-Schlichtegroll implemented a process known as a reverse takeover, which allowed for listing with less regulatory scrutiny. “Like a parasite devouring its host from the inside, Wirecard was injected into the corporate shell, emerging to walk the stock market in its place,” McCrum wrote.
The following year, having raised capital from the investing public, Braun arranged for Wirecard to buy a small German bank, for about eighteen million euros. To observers, it seemed as if Braun had overpaid; the company could have applied for its own banking license for as little as a million euros. But Braun’s acquisition procedure—as with the stock listing—let the company achieve the desired outcome while avoiding regulatory scrutiny, which would have likely ended in rejection. By owning a bank, the investor report explained, Braun “created a bridge between online and offline cash.” For Wirecard, eighteen million euros wasn’t the price of doing business; it was the price of being able to do business at all.
In October, 2006, the United States passed a law that made it illegal to take bets online. The act was an existential threat to Wirecard’s business. Most major payment processors cut off their American clients from gambling. Wirecard, however, exploited a loophole: the law allowed “games of skill,” which theoretically included poker. In 2007, the company acquired another payments entity, an Irish firm that specialized in online poker, and fired its auditor. That year, Wirecard reported a surge in revenue of sixty-two per cent. Bauer-Schlichtegroll gradually sold his entire stake in the company.
Wirecard had carved out a profitable, if tenuous, operation. But the major poker companies began to ditch Wirecard and its affiliates, to work with better-run businesses; pornography, meanwhile, was now ubiquitous and free. In 2009, although the business was struggling, Braun prepared for investors an unrealistic set of projections that showed a forty-five-degree line of profits and growth, and soon afterward the chief operating officer quit.
Braun appointed Marsalek, who was then twenty-nine, as the new C.O.O. Marsalek sought out new, scammy business partners in the unregulated world of nutraceuticals—açai-berry powder, weight-loss tea. The scheme, McCrum later wrote, “was to get hold of a credit or debit card number by offering ‘risk-free’ trials, then sting the customer with charges buried in small print that were nigh impossible to cancel.” Visa was aggressively shutting down accounts that were associated with fraud, so, according to McCrum, Marsalek spread the payments “over many different Merchant IDs, to keep the number of complaints below the threshold which drew attention.” But it wasn’t enough: Visa froze Wirecard’s accounts, and issued more than twelve million dollars in penalties—facts that Braun withheld from shareholders.
By now, a German investor named Tobias Bosler had discovered irregularities on Wirecard’s balance sheet. He eventually suspected that the company was also miscoding illegal gambling transactions as legal ones, so he asked a friend in America to transfer money to a Wirecard-affiliated poker site. “The money went to the poker Web site, but on the monthly statement it showed a French online store for mobile phones,” Bosler told me.
In 2010, the U.S. government charged a German man living in Florida, who was linked to Wirecard, with money laundering. (He pleaded guilty to a lesser charge, of conducting an unlicensed money-transfer operation, and has claimed not to know who paid his legal fees.) Wirecard had apparently laundered at least a billion and a half dollars’ worth of gambling proceeds, through deliberate miscoding alone, and the German man had transferred to American gamblers some seventy million dollars, with funds originating from Wirecard Bank. When news of the indictment was made public, Wirecard’s share price dropped more than thirty per cent. Braun announced a pivot to Asia.
In the fall of 2014, Dan McCrum noticed that Wirecard had bought many small companies in Asia that no one had ever heard of. The official explanation was that the acquisitions had “local strengths,” which Wirecard helped to grow on a “synergistic basis.” No one seemed to care any longer about the accusations of money laundering in Florida. The company had simply denied any connection, and the investing public had slowly bought into the idea that Wirecard had a wildly profitable Asia division; the firm’s stock valuation surged past four billion euros.
Over coffee in London, a hedge-fund manager named Leo Perry shared with McCrum his theory: Wirecard’s primary business model was to lie to the public, claiming huge profits, so that investors would push up its share price. However, “faking profits, you end up with a problem of fake cash,” Perry said. “At the end of the year, the auditor will expect to see a healthy bank balance—it’s the first thing they check. So what you have to do is spend that fake cash on fake assets”—dormant shell companies in Asia, reported as profitable investments.
A week later, McCrum headed to Manama, the capital of Bahrain, where a company called Ashazi Services was supposedly licensing Wirecard’s payment-processing software for a fee of four million euros a year. McCrum spent his first day in the country hunting for the Ashazi office. But there was no trace of it at its listed address. The next day, he set out to find Ashazi’s corporate lawyer, Kumail al-Alawi, at an office down a trash-strewn alley behind a fried-chicken joint. A man waved him in, and told him that Alawi no longer worked there. But he had Alawi’s number, and, after a quick phone call, McCrum was given directions to an empty parking lot. Alawi arrived in a dust-covered car. “They’re still working on the building, nobody can ever find it,” he said. He and McCrum approached a construction site and walked into what appeared to be the only occupied office—white walls, cheap furniture, and a couple of ferns.
“Ashazi, Ashazi,” Alawi muttered, as if he were hearing the name for the first time. He produced a folder, containing a few registration papers, and suggested to McCrum that he call the woman who was listed as Ashazi’s founder, a local actress and TV presenter. McCrum reached her by phone, but she had no recollection of the Ashazi contract, and suggested that he ask her business partner in the Philippines. The business partner had heard of Ashazi, but said that he was involved only in marketing—he thought that the actress was running the company.
McCrum concluded that Ashazi’s online presence was “stacked with lies,” as he later put it. (Alawi claims to have no memory of McCrum.) And, as far as McCrum could discern from the documents, the licensing fee had never been paid to Wirecard. Back in London, he brought his findings to the F.T.’s features editor. But that editor “didn’t really know what to do with it,” Paul Murphy, who had launched Alphaville, a blog at the paper, told me. “The F.T. doesn’t have an investigative tradition—it’s not like the Guardian or the New York Times.” A story in print “has to be understandable to the whole breadth of readers,” he went on, whereas “Alphaville had ditched that idea. Alphaville was doing hard-core, hard-core finance.”
Murphy brought McCrum onto his team. “I needed someone who had the kind of hard-core technical ability to take balance sheets apart,” Murphy told me. Although McCrum didn’t yet have enough evidence to use the word “fraud” in print, Murphy, as he recalled, encouraged McCrum, “Just use Alphaville as a platform, to get out your suspicions.”
The resulting series, “House of Wirecard,” ran in the spring of 2015. But even Alphaville’s finance-savvy readership struggled to make sense of the material. “This article could do with a paragraph that states, in plain english, what the author’s point is,” one reader commented. “There are a lot of facts presented, but their significance is lost on me.”
Wirecard’s response was less ambivalent. It spent much of the next few years seeking to create the impression that it was the victim of a criminal conspiracy between short sellers—who make money when a stock craters—and journalists, whom they paid off.
In 2016, a pair of short sellers in London released an anonymous, hundred-page inquiry called the Zatarra Report, alleging a litany of criminal activity at Wirecard. The report occasionally veered into conspiracy theories that were unsubstantiated or simply untrue. In the ensuing months, the company spent almost four hundred thousand euros on private investigators, to unmask and humiliate the authors of the report. Before long, their e-mail inboxes were spammed with phishing links and gay porn. Their correspondences were hacked. After McCrum wrote about the Zatarra Report, he was targeted, too, and soon he was driven to the edge of paranoia: he started logging license-plate numbers, checking hedgerows for cameras, and sleeping with a hammer under his bed.
It was not the first time Wirecard had pursued its detractors; in 2008, the company threatened Tobias Bosler, the investor in Munich. He had bet against Wirecard’s share price, telling no one about his position, but a Wirecard lawyer managed to track him down anyway. “I got a call from this lawyer, and he said, ‘You are short Wirecard,’ ” Bosler recalled. “He started reading my trades. He said the date, the time stamp, the number of shares—he had all the details of my transactions.” A few days later, the lawyer and two Turkish boxers arrived at Bosler’s office. The boxers backed him into a corner. One of them punched the wall next to his head; the other threatened his life. Terrified, Bosler closed his short positions. (He provided the German authorities with information about Wirecard’s money-laundering activities, but nothing ever came of it.) “No one else looked closely into Wirecard, until Dan McCrum,” he said.
“People have this view of finance—that it is, you know, all suited and booted,” Murphy told me. But, in his experience, the appearance of respectability usually ends at the façade of the banks. In the United Kingdom, gambling winnings aren’t subject to any taxes, so speculators have created a parallel market, to trade on tips and inside information; using a strategy known as “spread betting,” they are technically gambling on the directions of stock prices without taking possession of any company shares. They trade on margin, and routinely blow up their accounts. “These guys can be worth twenty million one day and nothing the next,” Murphy told me. It is here, among the “bandits,” as he affectionately calls them, that he finds many of his best sources. “A lot of them are really kind of rough,” he said, over a lunch of champagne and fish sandwiches at the restaurant Sweetings, his favorite haunt. “But they have mathematical brains, you know? They can do numbers, and they can do odds.”
Murphy, who is sixty, has been covering the London finance scene for so long that he still answers his phone by announcing his surname, as if on a landline with no caller I.D. In 2016, he got a call from one of his bandits, a businessman, spread-betting speculator, and night-club owner from Essex named Gary Kilbey. “What’s this stuff you lot are writing about Wirecard?” Kilbey asked. “Are you sure it’s right?”
“Yeah, it’s fucking right,” Murphy replied.
“I’ve got a guy who says it’s all wrong,” Kilbey said. “He doesn’t like Dan. He wants to talk to you.” That guy was Jan Marsalek; he had got another spread-betting speculator (who had previously pleaded guilty to securities fraud) to employ Kilbey as an intermediate.
“Tell him to fuck off,” Murphy said.
Almost two years passed before Marsalek made another overture. Again, the approach was indirect; another of Murphy’s sources casually mentioned to him over a lunch of lobster linguini that Marsalek would pay him “good money” to stop publishing reports about Wirecard. “I’m serious,” the man said. “I’ve heard ten million thrown about.”
Marsalek wanted to meet Murphy for lunch, and would fly in from Munich for the occasion, with Kilbey and his son, Tom, a former reality-TV star, in attendance. (Marsalek paid the Kilbeys more than a hundred thousand pounds each to broker the meal.) A few weeks later, Murphy walked into a steak house near Hyde Park, wired with a microphone, hoping to catch Marsalek dangling a bribe. He was without backup: three of Murphy’s colleagues were supposed to film the interaction with a hidden camera, sewn into a handbag, but Marsalek had changed the venue at the last minute.
Marsalek was at the table, dressed in a blue suit. He greeted Murphy warmly. Wagyu steak, sparkling water, fine wine. Marsalek wanted Murphy to know that, in his experience, journalists could easily be bought. But he spoke carefully; there was no explicit offer. At one point, Marsalek insinuated that Murphy and McCrum were under surveillance, noting that “friends” of his had reported to him that the two men lived “very normal lives.” Murphy suspected that another diner—a man, sitting alone—was running countersurveillance. When the bill came, according to Murphy, Marsalek paid with a credit card made of gold.
“He was obviously interesting—he knew people, and he was throwing a lot of money around,” Murphy told me. “So I started developing Marsalek as a potential source.”
At another lunch, Murphy promised that the F.T. wouldn’t publish more stories based on Wirecard’s past indiscretions, and Marsalek swore to Murphy that there was nothing new to find. They shook hands. After Murphy walked out of the restaurant, Gary Kilbey told Marsalek, “Look, if you are lying, Paul will find out. He will find out, and you’ll be buried.”
To Murphy, it seemed significant that many of Marsalek’s extracurricular activities had some tie to the Russian state. Wirecard had no business presence there, no subsidiaries. But Marsalek travelled to Russia constantly—often on private jets, sometimes landing after midnight and leaving before dawn. According to the investigative outlet Bellingcat, his international travel was closely monitored by the F.S.B., Russia’s primary security service. “His immigration dossier numbers 597 pages, much more than any foreigner’s file we have come across in over five years of investigations,” Bellingcat’s lead Russia investigator reported, years later. In Munich, Marsalek decorated his office with a collection of Russian ushanka military hats and a set of matryoshka dolls depicting the past century of Russian leaders, from a tiny Lenin to a bloated Putin. He also hosted secret gatherings at a mansion across the street from the Russian consulate in Munich, which he rented for six hundred and eighty thousand euros a year.
In Vienna, Marsalek and Braun mingled with far-right politicians who held openly pro-Russia views. Both men became paying members of an organization called the Austrian-Russian Friendship Society, and set up business deals with its general secretary, Florian Stermann. In late 2015, Stermann asked Wirecard to donate twenty thousand euros to the Society, to help pay for its fifteenth-anniversary gala, titled From Russia with Love, a lavish, all-night affair featuring trapeze artists and a Putin impersonator. Marsalek agreed, but asked that Wirecard’s name be omitted from the corporate-sponsorship list.
In 2016, Marsalek helped facilitate a deployment of Russian mercenaries into Libya. An American businessman—who had partnered with Wirecard on an electronic-payments startup—had invested in a cement plant near Benghazi, and he needed the facility cleared of unexploded remnants of war. Marsalek suggested one of his Russian friends, Stanislav Petlinsky, an executive at a security company.
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