Wirecard witness admits guilt but pins German fraud blame on ex-CEO

Wirecard AG

19/12/2022 11:12

By Christina Amann
       MUNICH, Dec 19 (Reuters) - The key prosecution witness
in Germany's biggest post-war fraud trial admitted guilt on
Monday in a scam that led to Wirecard's collapse, but said the
company was a "swindle" from the start with former chief
executive Markus Braun at its core.
    Wirecard's downfall two years ago shook the German business
establishment, putting politicians who had backed it and
regulators who took years to investigate allegations against the
payments company under intense scrutiny.
    Oliver Bellenhaus, who was head of Wirecard's subsidiary in
Dubai, became a key witness in the case after turning himself in
to German authorities in 2020. 
    Bellenhaus is on trial along with former CEO Braun, who
denies wrongdoing and accuses others of running a shadow
operation without his knowledge, and one other high-ranking
manager of the defunct blue-chip company. 
    They face charges including fraud and market manipulation
and if convicted could be jailed for up to 15 years.
    Florian Eder, a lawyer for Bellenhaus, told Reuters that the
cooperation of his client should result in a "very significant
reduction" in his sentence.
    At the start of the trial earlier this month, prosecutors
accused the defendants of being part of a gang that invented
vast sums of phantom revenue through bogus transactions with
partner companies to mislead creditors and investors. 
    Prosecutors said the deception allowed managers to siphon
money out of Wirecard for years.
    "Small lies became big lies ... It was a swindle from the
beginning," Bellenhaus told the court, saying he deeply
regretted his involvement and the damage it caused.
    In testimony last week, Braun's lawyers alleged that
Bellenhaus was the main perpetrator of the fraud at Wirecard,
which began processing payments for pornography and online
gambling and rose to be a DAX company worth $28 billion.
    But Bellenhaus told the court on Monday it was "blind
loyalty" to Braun, whom he described as an "absolutist CEO",
that had landed him in court in Munich.
    "Braun gave the marching orders and everyone followed."
    Founded in 1999 and based in the Munich suburb of Aschheim,
Wirecard became a showpiece for a new type of German tech
company that could compete with the established titans of
Europe's largest economy.
    But after successfully lobbying German authorities to
investigate those who were scrutinising its finances, Wirecard
was eventually forced to admit in June 2020 that 1.9 billion
euros were missing from its balance sheet.        
    A verdict is not expected until 2024 at the earliest.   
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PREVIEW-Wirecard in the dock as Germany's biggest fraud trial
starts     urn:newsml:reuters.com:*:nL8N32V3ZB
TIMELINE-The rise and fall of Wirecard     urn:newsml:reuters.com:*:nL8N32V2I0
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 (Additional reporting Marta Orosz; Writing by Tom Sims; Editing
by Alexander Smith)
 ((Tom.Sims@thomsonreuters.com; +49 30 220 133 645;))