Tuesday, October 20, 2020

Germany’s anti-money laundering unit failed to disclose warnings about Wirecard’s suspicious transactions


The anti-money laundering unit of Germany’s customs authority reportedly failed to share dozens of warnings with police that online payments company Wirecard was facilitating suspicious transactions even before the scandal broke in June.

The Financial Intelligence Unit (FIU) only handed over a small portion of the information it had about Wirecard’s transactions, broadcaster NDR and Süddeutsche Zeitung reported on Tuesday.

The FIU reportedly received a total of around 1,000 reports in connection with Wirecard, 97 of which were found to potentially offer information related to the Wirecard allegations. However, it only forwarded a fraction of them to the Bavarian state police and the responsible public prosecutor’s office in Munich, according to the reports.

The agency has been looking over the reports for offenses including falsification of accounts, fraud, embezzlement, market manipulation and insider trading, and says it is re-examining the evidence in light of new information.

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A spokesman for the Munich public prosecutor said that “only two reports from the FIU were received” before June 2020, both of which had triggered investigations.

The FIU says it has passed the information on 50 of the suspicious reports to the responsible law enforcement authorities, the majority of which originated after the scandal broke.

Widespread criticism

The unit has also been repeatedly criticized by police for delaying or withholding money laundering reports.

A total of four state justice ministries have filed formal complaints with the Federal Ministry of Justice against FIU, alleging that the unit had neglected to discover crimes outlined in the reports, or forwarded the reports too late.

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Left Party politician Fabio de Masi told NDR and Süddeutsche Zeitung that the unit’s process with the reports shows that the FIU is a “security time bomb,” and that “it urgently needs to be clarified whether it withheld information that would have allowed the criminal investigators in Bavaria to recognize the scandal earlier.”

Chairman of the Association of German Criminal Police Officers Sebastian Fiedler said the review process was a “security-policy catastrophe.” It can be considered certain that “there are countless other scandals in the data pool of the FIU,” said Fiedler. He also called on Federal Finance Minister Olaf Scholz to have the FIU’s process independently reviewed.

Wirecard started bankruptcy proceedings at the end of June after it was revealed that there was a €1.9-billion ($2.1 billion) gap in its accounts.


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