Money Men Review: Inside the Wirecard Scandal

In 2014, Dan McCrum, a banking analyst turned FinancialTimes journalist, was approached by an Australian hedge fund manager about a German company called Wirecard. The upstart company was making waves in financial markets, and the unlikely trajectory of its shares had sparked the interest of a few short sellers, who were seeking information about it, looking to bet that its stock price would fall.

Founded around the turn of this century as a way to process payments for pornography and gambling websites, Wirecard had grown at lightning speed through multiple acquisitions and blossomed into a payments processor if important that at some point its CEO was planning to take over Germany. main lender, Deutsche Bank. The company had grown from a market capitalization of 300 million euros in 2006, when it was first admitted to the German TecDAX index, to 4.2 billion euros in 2014, and analysts were optimistic about her future, though few seemed to understand what she was really doing.

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But despite this optimism, the company exhibited many characteristics of deception: strange acquisitions of small businesses in Asia; a general manager who had lingered in his position for 12 years. He had been fined by Mastercard through “miscoded” payments after disguising money for gambling, which is heavily restricted in the US, as transactions for other services. McCrum’s first meeting with Wirecard chief executive Markus Braun was disconcerting. “We’re an internet company with a bank as a daughter,” Braun told the reporter.

Over the next few years, McCrum sued Wirecard to uncover a fraud so audacious it took the company’s auditor, Ernst & Young, years to believe it. His book, Money Men: A hot start-up, a billion-dollar fraud, a fight for the truthis the result, detailing her determination to expose the lies at the heart of the business, and her growing bewilderment as she ignores his attempts to uncover its secrets.

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By the time his prosecution ended in 2020, McCrum, his sources, and the colleagues who aided him had faced criminal charges and received collateral threats of violence from various private investigators and heavyweights. In one case, violence wasn’t just threatened: a hedge fund manager was punched in the side of the head while walking her dog. At one point, McCrum nearly lost his job.

But his report forced the company’s hand, leading it to hire accountancy firm KPMG to conduct an internal investigation. The publication of KPMG’s report in April 2020 led Wirecard to admit that the €1.9 billion it had claimed to have on its balance sheet “probably did not exist”.

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McCrum also discovered sheer incompetence among the company’s executives, especially the two men at the top. Alongside Braun, who lied to the financial markets to save time, was COO Jan Marsalek, a fast-talking Austrian whose demeanor grows increasingly bizarre as the situation continues. story unfolds. Marsalek reportedly cashed in on millions from a particularly dodgy Indian deal and appeared to collude with Russia to plan a coup in Libya, after bragging that he had the recipe for Novichok.

Despite such behavior, at the time of the KPMG report, the company was valued at 15 billion euros. Marsalek fled to Belarus and is now on Europol’s most wanted list; Braun was formally charged with fraud in March of this year. Wirecard, whose shares plunged following the report, filed for insolvency in June 2020.

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The book tells the story of the dodgy dealings of the characters at the head of Wirecard and the fraud that brought him down. It’s swashbuckling, with McCrum chasing Wirecard executives, whistleblowers and various hangers through gleaming offices in Munich, across international borders and even into fake offices in Asia. But it also highlights the boring bureaucracy that makes up much of business journalism: Caffè Nero coffeehouses with sources; hours spent browsing documents; the frustrating arguments with lawyers over whether a story was sourced enough to print.

McCrum’s story may sound like a crime drama, but it’s actually a testament to the value of old-fashioned reporting and the editors who hire the people who do it. At a time when social media increasingly makes facts seem irrelevant, it’s a reminder that the truth is always worth pursuing.

Money Men: A hot start-up, a billion-dollar fraud, a fight for the truth
By Dan McCrum
Bantam Press, 352 pages, £20

About Victoria Rothstein

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