The Garda National Economic Crime Bureau (GNECB) raided the Irish office of failed Munich-based electronic payments provider Wirecard on Thursday, as it seeks to assist German authorities in their fraud investigation into the group, according to local news sources.
Wirecard filed for insolvency last month, owing creditors €4 billion after disclosing a €1.9 billion hole in its accounts that its auditor EY said was the result of a sophisticated global fraud.
“Following receipt of a mutual legal assistance treaty from German authorities, the Garda National Economic Crime Bureau began a search under warrant at a financial services provider with a business premises in Dublin city centre today, Thursday, July 9th, 2020,” the Garda press office said in a statement.
Last week the Garda reportedly said it was aware of the situation when asked if the organisation was looking into the activities of the Wirecard UK &Ireland, Dublin-based unit of the German group. However, it declined to comment further.
Wirecard had seen its low-profile Dublin-based business caught up an external investigation in recent months amid reports of accounting irregularities across a number of the group’s international operations, including Singapore, Dubai and India, sources revealed.
Wirecard’s board hired KPMG last October to investigate a series of allegations that had appeared in the Financial Times and other publications alleging the company had reported higher revenues and profits based on fictitious customer sales.
One of the Financial Times allegations was that a Wirecard partner company, Dubai-based Al Alam Solutions, a so-called third-party acquirer which helps retailers accept credit card transactions, had routed sales in the names of suspect clients through subsidiaries of the German group in Dubai and Dublin.
KPMG could neither verify nor disprove the claims, according to its report.
Wirecard’s former chief operating officer Jan Marselek remains listed as a director of Wirecard UK & Ireland, according to Companies Registration Office filings, even though he was fired by the German parent on June 18th after its auditor EY refused to sign off on the group’s accounts.
Munich prosecutors obtained arrest warrants against former group chief executive Markus Braun and Marsalek on June 22nd. Braun turned himself in that day, but Marsalek has disappeared.
The raid by the Garda of Wirecard’s Dublin office marks a further widening of the German investigation. Munich prosecutors arrested the head of Wirecard’s Dubai subsidiary on Monday after he travelled from the Middle Eastern country and turned himself into authorities.
Wirecard UK & Ireland’s former auditors, a small Dublin firm called BCK, reportedly resigned its role in early 2018. BCK ceased trading last year as its partners moved to other firms. Sources said that the former managing partner of BCK, Tony Kelly, declined to comment on the firm’s work.