Wirecard's missing 1.9 billion euros

Wirecard's missing 1.9 billion euros
	FALSE
	"The German payments company Wirecard held 1.9 billion euros in cash in trustee accounts at banks in the Philippines, reflecting real profits from its business in Asia."
Domain	Business, Finance & Scams
Tactic	Fraud or Scam; Fabrication;
Era	Current
First seen	2015
Origin	Wirecard's audited financial statements and statements by its management, challenged by Financial Times reporting from 2015 onward
Last reviewed	2026-10-26
	Further reading: books on Business, Finance & Scams

Wirecard's missing 1.9 billion euros were at the center of the largest accounting fraud in postwar German history. Wirecard, a payments processor based near Munich, rose to become one of Germany's most valuable companies and a member of the DAX stock index. For years it rebuffed allegations of accounting irregularities, and German regulators sided with the company against its critics. In June 2020 the company admitted that 1.9 billion euros it claimed to hold in trustee accounts in the Philippines probably did not exist. Wirecard collapsed into insolvency days later, becoming the first DAX member to do so. The scandal exposed failures by auditors, regulators and the financial press, and its former chief operating officer remains a fugitive.

The claim

Wirecard presented itself as a fast-growing technology company processing card payments for merchants around the world. Its reported profits rose steadily, and a large part of them came from business in Asia handled through third-party partners, companies that processed payments on Wirecard's behalf in markets where it did not have its own licenses. Wirecard said profits from these partners were held in escrow accounts managed by a trustee. By 2019 it said these accounts held about 1.9 billion euros, a quarter of its balance sheet.

Wirecard joined the DAX in September 2018, replacing Commerzbank. At its peak its market value exceeded that of Deutsche Bank.

Origin

Questions about Wirecard's accounts circulated for years. Beginning in 2015, the Financial Times, led by reporter Dan McCrum, published a series of articles questioning its accounting. In early 2019 the paper reported that a senior Wirecard finance executive in Singapore was suspected of forging and backdating contracts, based on internal documents and a whistleblower.

Wirecard denied the allegations, accused the FT of colluding with short sellers and sued the paper. Germany's financial regulator, BaFin, responded by banning short selling of Wirecard shares in February 2019, the first time it had done so for a single company, and filed a criminal complaint against the FT journalists, accusing them of market manipulation. Prosecutors later dropped the investigation of the journalists.

What the evidence shows

Under pressure, Wirecard commissioned a special audit by KPMG. Published in April 2020, it said the auditors had been unable to verify that profits from the third-party business existed, because Wirecard had not provided the necessary documents.

In June 2020, Wirecard's longtime auditor, EY, refused to sign off on its 2019 accounts. EY said it had found evidence that confirmations of the 1.9 billion euros in balances, supposedly held at two banks in the Philippines, were spurious. Both banks said the documents were forgeries and that Wirecard was not their client. The central bank of the Philippines said the money had not entered the country's financial system.

Chief executive Markus Braun resigned on June 19, 2020, and was arrested days later. On June 22 Wirecard said there was a prevailing likelihood that the 1.9 billion euros did not exist. On June 25 it filed for insolvency. Investigators concluded that much of the third-party business had been fictitious for years and that profits had been inflated to attract investment and loans.

Jan Marsalek, the chief operating officer responsible for the Asian business, fled. He was later reported to be living in Russia and was linked by investigators to Russian intelligence, including in a British case in which several people were convicted of spying for Russia. Braun has denied wrongdoing, maintaining that he was a victim of fraud by others. His criminal trial in Munich began in December 2022 alongside other former executives, one of whom, the head of a Dubai subsidiary, testified for the prosecution.

Consequences

The scandal led to major reforms in Germany. BaFin's president and vice president left their posts, the regulator was restructured and given stronger powers, and a parliamentary inquiry criticized regulators, auditors and the government. Germany's auditor oversight body sanctioned EY, including barring it from taking on new audits of certain public-interest companies for two years. Investors lost billions of euros.

Why it persists

Wirecard is a case study in how national pride, institutional defensiveness and complexity can protect a fraud:

A national champion. Wirecard was seen as a rare German technology success story, and officials were inclined to defend it.
Shooting the messenger. Regulators investigated journalists and short sellers instead of the company.
Outsourced opacity. Routing profits through third parties in distant jurisdictions made verification difficult.
Auditor failure. For years the auditor accepted confirmations of cash balances without obtaining them directly from the banks.

Lessons for readers

Cash is the easiest asset to verify. When a company cannot show that its cash exists, treat that as a serious warning.
Be wary of profits that come mainly from partners or subsidiaries in places that are hard to check.
When a company attacks its critics rather than answering their questions, look more closely at the questions.
Regulators and auditors can fail, especially when a company has political or national importance.
Investigative journalism often uncovers fraud before official bodies do.

Sources

Dan McCrum, Money Men: A Hot Startup, a Billion Dollar Fraud, a Fight for the Truth (Bantam Press, 2022).
Dan McCrum, "House of Wirecard" and related reporting, Financial Times, 2015–2020.
KPMG, Report Concerning the Independent Special Investigation, Wirecard AG (April 2020).
Deutscher Bundestag, final report of the parliamentary committee of inquiry into Wirecard (2021).
Wirecard AG, ad hoc disclosures, June 18–25, 2020.