Wirecard: The fairy tale of the invented billions

Michael Jaffe has been speaking for several hours. Then the Wirecard insolvency administrator in the criminal trial against former CEO Markus Braun and two co-defendants gets to the heart of the scandal. "98 percent of the business never existed," explains the 62-year-old insolvency expert.

Specifically, allegedly profitable shares in Asia were merely fabricated and never actually existed. This is consistent with previous findings of the Munich Regional Court, where a trio of managers have been on trial since the end of 2022 for fraud, breach of trust, and accounting manipulation. Jaffe also has crucial information about alleged Wirecard billions in escrow accounts. "No €1.9 billion was stolen; the money was never there," the witness emphasizes.

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Jaffe's testimony carries weight. First as an expert witness, then as provisional, and finally as formal insolvency administrator, the lawyer has been involved in the investigation of what many experts consider to be the biggest economic scandal in post-war German history since the Wirecard bankruptcy on June 25, 2020. And he has played a central role.

For five years, he has been searching for assets to secure for creditors of all kinds. Around 53,000 claims totaling a good eight billion euros have been filed. If the supposedly highly lucrative third-party partner (TPA) business in Asia and the associated billions in trust funds had existed, the internationally scrutinizing Jaffe would have been happy to find them.

However, the 62-year-old is now certain that neither TPA transactions nor billions in trust funds ever existed, because he and his team spent five years turning over every stone in the convoluted Wirecard Group. Employees who would have been involved with the TPA deals by virtue of their function were interviewed – without result. "Nobody knew anything about it," the witness said. Even in vast amounts of secured company data, not a single trace was found. Given the €51 billion in business volume allegedly moved through TPA transactions, Jaffe considers this simply impossible.

After the bankruptcy, not a single customer from Asia contacted them. Things were quite different at a British Wirecard subsidiary with a modest €60 million in real business, Jaffe recalls. "Our phones were ringing off the hook," he says, describing the situation after merchants were cut off from Wirecard overnight.

They were flooded with calls, emails, and demands. Regarding the much larger TPA business in Asia, however, there remains a complete silence to this day. This leaves Jaffe, and evidently also Judge Markus Födisch, with only one conclusion: The TPA business was merely fictitious.

The most prominent defendant, Braun, and his former chief accountant Stephan von Erffa, who is sitting with him in the dock, nevertheless continue to insist they are innocent. They argue that the real fraudsters installed shadow companies to embezzle the missing billions. These perpetrators are primarily the co-defendant and confessed key witness Oliver Bellenhaus, as well as the fugitive former board member Jan Marsalek.

But Jaffe also debunks this story. He said he had examined nearly 100 alleged shadow companies. "We've gone through all of them," the witness assures. Half of them clearly had no contact with Wirecard. Others have credibly denied this. In no case were any activities detrimental to the payment service provider based in Aschheim near Munich identified. "We consider it impossible that any business was embezzled," Jaffe emphasizes.

Braun and Erffa listened to this testimony, which was devastating for their defense, without any discernible reaction. Braun remained unmoved even when the insolvency administrator told him about a manager's insurance policy he had personally taken out in the event of criminal offenses. Jaffe is expected to testify for two more days.