"Then came June 2020, when, in the midst of an audit, Wirecard could not locate €1.9 billion in assets it claimed were being held somewhere in the world"
EY audited them for years without asking about the missing billions.
You can't make this up. EY screwed up, but they could not have reasonably assumed that someone sets up a fake bank branch.
https://newsinfo.inquirer.net/1441886/ex-dotr-exec-others-fa...
“The NBI said Arellano, an employee at the BPI branch in Malate, Manila, had admitted to receiving P10 million for issuing bogus bank certification documents that Tolentino and his law office needed as the supposed local trustee of Wirecard.”
I guess it goes to show that if you are dealing with enough cash to bribe third world governments then all kinds of new fraud schemes become possible.
As the responsible manager for IT (usually CTO - internal SOX was a different matter) I have been "asked" by EY (and KPMG) about IT setups and security several times for audits. And I could have told them whatever I like, the people were right out of university with no clue about the matter and in no position to ask the right questions except reading their checklist; I always had the impression they only knew half the words they were reading.
A billion dollars can buy a lot of grift.
But I guess bean counters aren't the demographic for heist or confidence movies so maybe the Hollywood ending didn't occur to them.
People litteraly went to the banks in Asia during the extraordinary audit, something that is not usually done during "normal" audits.
And yes, I also hate when I misplace my billions. Especially since I have yet to relocate them...
I think you're joking, but I'm not sure. I work in trading, and I've been on the receiving end of that phone call. As I recall, it was around 9PM in the US, my work phone rang and could see from the caller ID that it was from our London office. There were no greetings, first words I hear were "We're missing over a billion dollars. You need to find it...NOW."
When I received that call, it was in the middle of the 2008 financial crisis. The daily PnL swings were wild, and it wasn't always clear on the cause. FX volatility was insane. We did all of our PNL reporting in USD, but held a lot of foreign assets.
There was no malfeasance; I'd just taken ownership of the system a week or two before, and a nightly job had silently failed. Perl job on Windows, extracting data from a 3rd party trading system that wasn't built w/ integrations in mind, feeding it into in-house systems. It was a very flimsy house of cards. A gentle breeze in the night would knock it over. Rewrote the integration in Python, hooked everything up into our monitored job scheduler. Had to do some janky UI automations in Python until we got the vendor to add a proper CLI-based reporting mechanisms. It was a "fun" ride, but I eventually got my evenings back. Did cause the end of a relationship, though, so there's that.
There are strict rules and guidelines around verifying an asset. The auditor isn't supposed to "believe the documents" - they need to form an independent opinion.^1
If the auditor is unable to obtain sufficient appropriate audit evidence to verify the asset, they can issue a qualified opinion due to a scope limitation.
^1 https://www.accaglobal.com/gb/en/member/discover/cpd-article...
Occurrences of 'litterally' your comments:
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
Occurrences of 'litteraly' in your comments:
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
I really hate it when I leave my billions somewhere in the world and can't remember where.
https://www.independent.co.uk/news/uk/crime/secretary-who-ha...
A throwback to the ancient world to the Middle Ages, hiding spies among the clergy!
They are also openly supporting invasion of Ukraine as a kind of "holy war".
The russian word for "non-government organization" is "foreign agent".
Unfortunately, there is typically a big revolving door between them and any tax institution. Why toil for decades in underpaid public roles, when you can step into the gilded world of consultancy and double or treble your salary? It's like the yacht scene in The Wolf of Wall Street, except in real life most civil servants take the corrupting deal (and I can't even blame them).
Most audits are just “does the documentation support the reporting”.
I feel like this is pointing out something like, “More criminals drive Ford trucks than any other truck” which is true, but just because more people drive that brand than any other?
Reminds me of https://xkcd.com/1138/
When Dan McCrum was under threat of arrest in Germany, that was because Paul Murphy, Dan's editor, did in fact give away to some of his contacts the fact that they were coming out with a negative story on Wirecard and the time it would be published. Murphy has form for trading his own scoops with stock traders for favours. The Wirecard recording of one of Murphy's mates talking about shorting Wirecard to take advantage of the story is accurate and had Murphy (but I very much doubt McCrum) bang to rights.
McCrum's explanation for this is that Murphy's associates knew the exact time of the story being released because they had happened to guess it by sheer luck. Clearly if that's what Murphy told him he should have been a little more skeptical.
Ultimately the FT's internal investigation into Paul Murphy's behaviour and BaFin's into McCrum's work were abandoned for the same reason: the Wirecard revelations were legit, and much more serious than Murphy's breaches of journalistic ethics.
https://www.newyorker.com/magazine/2023/03/06/how-the-bigges...
The stories about the threats against the journalist Dan McCrum who was investigating Wirecard between 2014 and 2020 are mental.
I've just checked and McCrum has shared this link as well on Twitter so I count that as a reason to trust it.
I ahve to say, I am impressed a little bit. Just puzzled about the whole goal of this operation. And bit worried the Wirecard management standing trial right now, can use this to get away with the fraud they actively engaged in.
"British prosecutors say that from 2020 to 2023, Marsalek ran a ring of five U.K. based Bulgarians who are alleged to have spied for Russia, directing them to gather information on people with the aim of helping the Kremlin abduct them. Officials say Marsalek was used by Russian intelligence services as a middleman to put distance between them and the spy network as it targeted individuals across Europe."
...
"While running Wirecard, Marsalek helped the GRU, Russia’s military intelligence agency, and the SVR, its main overseas spying organization, pay intelligence officers and informants and funnel money into conflict zones in the Middle East and Africa, according to the officials.
At the same time, these Western officials suspect Marsalek was gathering information on other customers of Munich-based Wirecard, most notably Germany’s main BND intelligence agency and the Federal Criminal Office, the country’s equivalent of the FBI, and handing it over to Moscow."
...
"Germany’s foreign intelligence service, the BND, as well as the country’s equivalent of the FBI, the BKA, told parliament during a public inquiry that ran from September 2020 to June 2021 that they had used Wirecard credit cards and bank accounts for their agents abroad as well as for paying informants at home and abroad. Senior German intelligence officials confirmed this to The Wall Street Journal. "
...
"Marsalek ordered Wirecard Bank employees to breach data-protection and other rules to compile data about clients, according to testimony by former executives to German prosecutors. Several intelligence officials said it could have provided information about intelligence agents’ work. Wirecard’s former chief product officer, Susane Steidl, said Marsalek had overruled objections to collecting customer data and told her in 2019 he needed the data for the BND—something the agency categorically denies."
Right now there is still NASDAQ traded "Freedom Holding Corp" (FRHC) originated from Kazahstan with primary business of fueling sanctioned Russian money and doing other shady business in ex-USSR. Everyone knows they mass open accounts for Russia residents remotely and no one cares.
It's not like there are no other banks doing the same, but none of them are owned by US-based entity traded on NASDAQ. SEC certainly wont care until it implode on thousands of retail investors. Going after crypto is far more important.
And there are more financial institutions that have banking licenses around the globe (including US, EU and UK) with primary source of income from money laundering and again no one cares until they grow too big or scam all their customers and investors.
I'm a Russian guy (with a Freedom bank KZ account), who publicly condemn the barbaric invasion and thus is threatened by the homeland's so called authorities. A guy who left Russia after the war has started in order to stop at least paying taxes that fuel this war (and to avoid being sent to the frontline as well). Who have been living, working and paying taxes in the EU since then. I want the war to stop ASAP from the very first day. As well as having the responsible maniacs to face the trial.
And I see many of the sanctions counter-productive.
Can you imagine what it took to get my savings (before calling it "blood money", keep in mind, that I always supported the opposition, never worked for the government-affilated entities and tried my best to prevent this war) to the European banks with all this witch-hunt and passport-based discrimination.
Would you really prefer my money to stay in Russia and work for the benefit of the war?
Why they are still being allowed to operate and have not been shutdown is a mystery to me.
I guess this needs a coordinated effort of complaints and letters to SEC, FED, congresspeople.
SEC is going after everything related to crypto, but gives no damns about some bs money laundering operation being traded on NASDAQ. This is exactly what Wirecard was in EU, but on smaller scale.
The good news is, you're now living in a free society. You're paying taxes, you're probably following the law, too. You'll be fine here. Also, the Ruble will fall, it is just a question of when. Plus, you won't have to participate in a war economy making the useless war crap, or being cannon fodder. You made a brave, life changing decision, and part of that is saying farewell to your past.
Also, I don't know if it is possible for Russian people to use cryptocurrency but what I'd consider is go to China and buy some cryptocurrency there, then exfiltrate that to EU. Or something like that, I don't know. You'd be taxed either way (or have it not declared ...). The problem with stuff like this is, it can be used for good and bad. As such, you're collateral damage.
Shutting down would undoubtedly help, on the other side, understanding systems and beneficiaries needs to be handled in a different manner.
UPD: In any case my point is not talking about this situation specifically, but just pointing out US has it's own Wirecard and likely are there far more than one example. This is just one I know.
I'm not SEC to know that.
> Is it really just that no one cares?
There was some investigation by Hindenburg Research, but since it's mostly OSINT with bunch of forum screenshots and public records it did not gain that much publicity:
https://hindenburgresearch.com/freedom/
PS: Just to be clear my source of information is not some journalist aricle or Hindenburg Research. I just opened said bank account for myself along with many many other people who never in their life been to Kazakhstan.
And of course USSR had Eastern Germany for 40+ years - enough to develop deep networks and poison the minds.
Speaking as a Russian, I find this assertion very questionable. Lithuanian and Latvian are far closer to East Slavic languages, for one thing. But even among West European languages, Spanish is easier IMO.
In general, Russia borrowed a lot of science and engineering stuff from Germany, and definitely the military, but when it comes to governance - no, not really.
Even the events around the current conflict seem not to have shaken the society, from what I witness. The Green parties wishes on the topic of heat pumps or people coming to their country whose skin color is not white have more revolutionary potential than Russians right around the corner or people blowing up their gas pipelines.
They are too busy with themselves and stuff like that is just embarrassing. It only serves as filling material for your everyday complaining orgy every single morning at work. Stuff a healthy German citizen leaves behind them at Feierabend.
... which are the most efficient way to wean us off of Russian gas. The Greens have pushed for years now to get rid of fossil fuel dependencies, turns out they did have a point all those decades.
[0]: https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Massn...
TR got its own full-bank license a few months ago [1], it makes sense for them to consolidate stuff in-house instead of paying third parties for their services. That is useful as a startup with a few thousand customers, as the requirements of actually building a bank tech stack are quite massive, but TR has >4M customers now and makes a profit [2].
[1] https://www.capital.de/geld-versicherungen/trade-republic-er...
[2] https://www.businessinsider.de/gruenderszene/fintech/neobrok...
The missing 1.9 billions would be an interesting asset for e.g. NK secret services, but for Russia it's a drop in a bucket.
The fraud at Wirecard started before Marsalek seems to have been recruited as a Russian asset; the GRU probably didn’t even know it was happening until fairly late in the game. As frauds tend to do, it snowballed, until you’re setting up a Potemkin bank branch in the Philippines to get your auditor off your back about the couple billion Euros in cash you claim to have.
Still, I can think of a few reasons why an intelligence service might want to be connected to the wealthy COO of a company that processes payments for porn websites and offshore casinos…
"British prosecutors say that from 2020 to 2023, Marsalek ran a ring of five U.K. based Bulgarians who are alleged to have spied for Russia, directing them to gather information on people with the aim of helping the Kremlin abduct them. Officials say Marsalek was used by Russian intelligence services as a middleman to put distance between them and the spy network as it targeted individuals across Europe."
...
"While running Wirecard, Marsalek helped the GRU, Russia’s military intelligence agency, and the SVR, its main overseas spying organization, pay intelligence officers and informants and funnel money into conflict zones in the Middle East and Africa, according to the officials.
At the same time, these Western officials suspect Marsalek was gathering information on other customers of Munich-based Wirecard, most notably Germany’s main BND intelligence agency and the Federal Criminal Office, the country’s equivalent of the FBI, and handing it over to Moscow."
...
"Germany’s foreign intelligence service, the BND, as well as the country’s equivalent of the FBI, the BKA, told parliament during a public inquiry that ran from September 2020 to June 2021 that they had used Wirecard credit cards and bank accounts for their agents abroad as well as for paying informants at home and abroad. Senior German intelligence officials confirmed this to The Wall Street Journal. "
...
"Marsalek ordered Wirecard Bank employees to breach data-protection and other rules to compile data about clients, according to testimony by former executives to German prosecutors. Several intelligence officials said it could have provided information about intelligence agents’ work. Wirecard’s former chief product officer, Susane Steidl, said Marsalek had overruled objections to collecting customer data and told her in 2019 he needed the data for the BND—something the agency categorically denies."
One can only wonder what SBU was doing in the meantime...
This is an idea you hear quite often, but seems very unlikely to be actually true. Internet's truly big businesses are the truly big businesses of the big tech companies
And they browse porn at work more than you think.
Story time:
Stupid youngster me is tasked with getting the "tape out" of one of our microprocessors designs to Taiwan. I dutifully calculate that at the current rate of upload, it's going to take almost a week in spite of the fact that we have a solid OC-3 that should make short work of it. That's not going to fly. So ... off to IT I go...
"Hi, Mr. IT, I've got a bandwidth problem getting this tapeout to Taiwan. Can you bump my traffic in priority so I can get this out?"
Tap ... tap ... tap.
"Sigh. Yes, Mr. Exuberant Youngster, we can solve this. Give it an hour."
"Thanks." I troop back up to my desk.
5 minutes later a global email appears from Mr. IT ...
"Hi, folks. We're starting a system audit sweep of all the computers for inappropriate access. Yes, you know what that means, all those videos that you shouldn't be watching at work ... yeah, stop that, post haste. We should be done 48 hours from now. Thanks."
A quite remarkable amount of clicking in the cubicle farm suddenly begins. And, of course, my bandwidth suddenly jumps through the roof.
I ... am ... agog.
I walk back up to Mr. IT: "Erm ... thanks. But, what just ... happened? And ... why?"
Mr. IT, with a huge grin replies:
"No problem. You needed bandwidth; so I got you bandwidth. As for why? Well, I can go through the work of prioritizing your traffic which requires that I log into the external gateway, set up rules, get them correct, let you upload, remember the reset the rules and not hose the entire company while doing so. Or I can get all dipshits watching porn at work to stop for a day or two by announcing a system audit. Which do you think is easier and less error prone for me?"
Youngster me got an important lesson that day that there are often multiple solutions to the same problem.
Look at most news stories these days. There's some kind of conflict, two parties don't agree on something, and they report both "sides" of the story. Because the writers don't know what really occurred, it's common that a news story will give equal weight to lies and truth (or semi-truth and semi-truth).
In the insanity of normal society, this is actually promoted as a good thing. News stations pat themselves on the back for being "fair and balanced", and use it as proof of being "unbiased".
It's the opposite of unbiased, when there's no bias there are no "sides". You can't take both sides in a conflict, each "side" being a heavily biased opinion in itself, and combine them together to create a lack of bias. That's not how it works, two conflicting partial truths don't equal a whole truth, two conflicting partial truths just create cognitive dissonance (FUD).
Now look at this news story, it's quite different from what I described above. It's proper investigative journalism where the goal is cutting through opinions and second-hand information to find the actual truth. It's a major accomplishment and something to be applauded.
In my heavily-biased opinion, it's the job of a free press to seek and report the truth, to create new stories like this one, not to report "both sides".
And to illustrate when I'm saying, look at what happens to be the #1 story on my Google News at this moment: https://www.cnn.com/2024/02/29/middleeast/gaza-food-truck-de...
CNN doesn't know exactly what happened, there's conflicting stories, and all we know for sure is that a bunch of hungry Palestinians were just killed while trying to get food. Here's what CNN found:
According to Palestine it's Israel's fault.
According to Israel it's Palestine's fault.
Yes, clear as mud. It's the perfect kind of reporting for adding to the controversy and acting like there's no clear right & wrong, or viable solutions to the conflict. It's how I would do things if I wanted to extend the war as long as possible. However, I'm biased toward peace and preservation of life, so it's quite clear to me what's causing food riots and subsequent massacres.
I'm not going to get into the politics of that, but I do wish that news orgs would report the necessary context for understanding what "so-and-so claims" really means and letting people have all the information they need so they can judge how many grains of salt are appropriate. A little bit of he-said, she-said is necessary in breaking news, but there should be a lot of caveats that go along with reporting like that.
Understanding this context, seeing all the threads, and there's really not much to untangle. If anything, this was entirely predictable. Nobody should be surprised that starvation was enough to provoke a violent conflict between Palestinians and the IDF.
I believe the news media is here to provide clarity, not add to confusion. The problem is that when things are a tangled mess, the media has a lot more to report on. Truth is cut and dry, but when there's a mystery you can just keep going on and on and on... I still remember all the news about OJ Simpson, so much to report and so few facts!
But it does inform me sometimes!
Cost of doing business.
I remember that earlier in the war, when some kind of rocket struck a hospital in Gaza, Israel and Hamas also blamed each other - then President Biden said as far as his intelligence goes, it was Hamas and I think that's the consensus now? We might never know for sure, but in the immediate aftermath of the hit the options for a media outlet were basically "we don't know" or "it was definitely the side we don't like". The truthful answer until someone's done the investigation is the former, but that gets you the kind of article on CNN that you're pointing out.
I profoundly disagree. People want two other, completely different things:
1. People want to be given information to confirm their own biases and preconceived notions
2. People want to be able to not have to actually do anything or change anything because of any new information.
Putin is not in that place because he's somehow an extremely talented (or extremely lucky) person. Putin is there because that's what most of the Russian elite wants. Once he's gone, the Russian elite will put there somebody else who will fit them the most. It would not be reasonable to expect any drastic difference given the unchanging circumstances.
The thought that Putin is holding a whole country hostage to his freakish ideas is a very depressing one, but when you think of it it's actually an optimistic one because it implies that a positive change could be coming. But in my view, the reality is even more depressing. And in my view, the reality is that he has both the elites' support and the popular support.
A good proxy for the Russian situation would be China. They have changed the guy a couple of times in the last 30 years but the policy stayed mostly the same. The only things that can bring a change are either a coup (not likely in Russia) or a black horse like Gorbachev.
Didn't Elizabeth Holmes do that too?
Never trust people who consciously dress like Steve Jobs on days other than Halloween.
Just don't wear a black one and you're fine.
- HSBC was fined about $2.5b all in all by US govt in 2010’s (one of largest ever) for laundering $900m for cartels over multiple years. The Sinaloa branch (not NYC, Zurich, Greenwich, London… but Sinaloa) was their highest performing branch for a long stretch
- Why exactly would a German unicorn payment processors’ COO be a longterm agent… GRU’s infiltration of German finance and energy industry for laundering and energy markets access is an open secret.
Also compared to the US, Germany has given about 60 billion total aid (including the EU share + refugee cost) if I calculate it correctly, while the US has given 75 billion. So it gives much more per GDP.
https://twitter.com/Jay_Bibo_Mario/status/172166701009283103...
I don't know if that assignment has been confirmed by any other source, but we do know that the visits have happened. They are even documented in radio archives. According to present day public broadcasting journalists, those actually happen to be the oldest known public recordings of Scholz.
... also Kim Dotcom who I met personally before going on a run to Asia. He too had cardboard cutouts of himself as a cartoon character all over his Munich office of DataProtect. Funny that Kim Schmitz managed to settle in NZ and not Russia. He is an outlier, probably lacked the RU connection back then.
https://www.goodreads.com/book/show/9319468-kingpin
Especially liked the part where he is asked "so why do you keep your piles of cash in Pelican cases"? "Because they float."
https://news.ycombinator.com/item?id=39560440
Entities like PayPal and Stripe are complaining they want less EU banking regulation.
> Marsalek's grandfather, [Hans Maršálek](https://en.wikipedia.org/wiki/Hans_Mar%C5%A1%C3%A1lek), was a member of the Austrian resistance and later a suspected spy for the Soviet Union.
And following the link to Hans Maršálek's page:
> He was long suspected of being a Soviet asset. Recently uncovered documents indicate that are grounds to believe he was responsible for helping the Soviets kidnap at least four people and illegally render them to Moscow for torture and interrogation.
While I am not surprised that a socialist persecuted under the Nazis would join Soviet efforts, this is some useful backstory in understanding why Marsalek the younger apparently had no reserves in collaborating with the KGB.
And as a russian who came to states as a refugee it also boils my blood to see how much my former homeland is stirring the pots and slinging sh*t around the world and how many people can be bought. It is all going to end in a huge explosion 1917 style and a disaster for so many.
that is a breach on a Hanssen level
I am guessing there is a mental hurdle in committing larger and larger crimes, but having “permission” from a government spy agency probably makes such things easier.
It’s ok to commit this crime - I have permission so it’s not really a crime.
The point is, no-one sees themselves as the bad guy.
https://irp.fas.org/congress/1992_rpt/bcci/11intel.htm
> "The unofficial story of BCCI's links to U.S. intelligence is complicated by the inability of investigators to determine whether private persons affiliated with U.S. intelligence were undertaking actions such as selling U.S. arms to a foreign government outside ordinary channels on their own behalf, or ostensibly under sanction of a U.S. government agency, policy, or operation."
