Wirecard witness admits guilt but blames ex-CEO for German fraud

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By Christina Aman

MUNICH (Reuters) – The main prosecution witness in Germany’s biggest post-war fraud trial admitted guilt on Monday in a scam that led to the collapse of Wirecard, but said the company was a ” scam” from the start with former chief executive Markus Braun at its heart.

Wirecard’s fall 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 ran Wirecard’s Dubai subsidiary, 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 the others of running a shadow operation without his knowledge, and another high-ranking director of the defunct blue chip company.

They face charges of fraud and market manipulation and, if convicted, could be jailed for up to 15 years.

Florian Eder, a lawyer for Bellenhaus, told Reuters his client’s cooperation should lead to 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 fabricated huge sums of phantom income through bogus transactions with partner companies to mislead creditors and investors .

Prosecutors said the deception allowed managers to siphon money from Wirecard for years.

“Little lies became big lies… It was a scam from the start,” Bellenhaus told the court, saying he deeply regretted his involvement and the damage it caused.

In testimony last week, Braun’s attorneys alleged that Bellenhaus was the main perpetrator of the fraud at Wirecard, which began processing payments for pornography and online gambling and became a corporation. DAX worth $28 billion.

But Bellenhaus told the court on Monday it was “blind loyalty” to Braun, whom he described as an “absolutist CEO”, that brought him to court in Munich.

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“Braun gave the marching orders and everyone followed.”

Founded in 1999 and based in the Munich suburb of Aschheim, Wirecard has become the centerpiece of a new kind of German tech company capable of competing with the established titans of Europe’s biggest economy.

But after successfully pressuring German authorities to investigate those scrutinizing its finances, Wirecard was finally forced to admit in June 2020 that it was missing 1.9 billion euros from its balance sheet.

A verdict is not expected until 2024 at the earliest.

(Additional reporting by Marta Orosz; Writing by Tom Sims; Editing by Alexander Smith)

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