# I. How the fraud investigation unfolded
Wirecard AG (Wirecard) was founded in Germany in 1999 and established itself as one of the first providers of digital payment processing solutions. In 2018, Wirecard became the fourth most valuable company in the German financial sector and joined the blue-chip DAX 30 stock market index as its market value reached EUR 22.5 billion (USD 25.3 billion).
Despite Wirecard’s seemingly meteoric rise in the German fintech market, journalists and short-sellers repeatedly raised questions about the company’s money laundering compliance checks and its accounting practices.
In March 2010, Market Watch, an online stock market news source, cited the FBI’s finding that Wirecard’s subsidiary Wirecard Bank facilitated the transfer of USD 5.7 million in illegal online gambling proceeds into the US in 2009. The Munich prosecutors confirmed that they had been notified of the allegation.
In April 2015, the Financial Times (FT) newspaper launched a reporting series on Wirecard, which points out alleged inconsistencies in the company’s balance sheets from 2008 to 2014.
In February 2016, a report by Zatarra, a boutique firm of investment professionals and researchers, claimed that it had found evidence that a UK-based subsidiary of Wirecard helped to launder offshore betting proceeds back into the US, and that Wirecard helped its merchant clients in Asia to bypass money laundering controls of payment networks.
The next year, the German newspaper Süddeutsche Zeitung and public broadcaster NDR, relying on the leaked “Paradise Paper” documents, reported that Wirecard Bank maintained accounts for offshore gambling operators and processed payments for German gamblers.
In January 2018, the US-based Southern Investigative Reporting Foundation questioned the whereabouts of the fund that Wirecard, in 2015, was supposed to use to acquire an India-based payment processing business.
