Security & Fraud

DOJ Looks At Possible Wirecard Role In Purported $100M Bank Fraud

DoJ Looks Into Wirecard’s Possible Role In Purported $100M Bank Fraud

Adding to the series of legal difficulties for Wirecard, the Justice Department is looking to see if the German payments company had an essential part in a purported $100 million bank fraud case involving a digital cannabis firm, The Wall Street Journal reported, citing unnamed sources.

Two individuals have been charged in the purported fraud who allegedly worked with payment processors, among others, to confuse American banks into giving the green light to card payments for cannabis items, the WSJ reported.

Wirecard served as an intermediary for digital businesses, with the inclusion of electronic payments processing for travel firms and merchants, among others. The company, however, has faced investor claims that it made fake revenue with shell firms and third parties or purported to have funds that “wasn’t there” per the news outlet.

The FBI’s New York field office and the U.S. Attorney’s office in Manhattan are looking into whether Wirecard had a function in the purported conspiracy as foreign merchant bank and payment processor per unnamed sources in the WSJ report. Two unnamed sources also claimed that are authorities are looking into the potential participation of a number of present or past executives from the German payments company.

Wirecard, however, has not surfaced in public court filings or faced charges in the bank fraud case in the United States per the report.

On Tuesday (July 7), the administrator set by the court who was directing the insolvency of Wirecard AG noted that a number of investors have expressed interest in purchasing what remains of the German payments firm. Michael Jaffe said in a statement per a past report, “The aim is to find timely investor solutions in the interest of creditors, employees and customers.”

And a 46-year-old Wirecard executive was arrested in Germany for his alleged key role in a large global purported fraud case involving the firm. The individual was in control of Wirecard’s CardSystems Middle East and operated the division mainly from his Dubai apartment.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.