Wirecard’s former chief financial officer charged with fraud

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Munich prosecutors have charged Wirecard’s former chief financial officer with fraud more than three years after the payments company collapsed in one of Germany’s biggest corporate scandals.

Burkhard Ley, who was CFO from 2006 to 2017 and then worked as an external adviser to Wirecard, was on Thursday charged with fraud, breach of trust, accounting and market manipulation.

Ley was arrested in 2020 after the once high-flying payments group crashed into insolvency. He was released in November of that year after spending four months in police custody.

The charges against Ley come as the trial of Wirecard’s former chief executive Markus Braun and two other former executives continues. The trial, which started a year ago, is expected to run until at least next summer.

Wirecard was valued at more than €24bn at its peak and feted as a rare German tech success. It failed in June 2020 after disclosing that €1.9bn in corporate cash linked to outsourced operations in Asia did not exist.

Munich prosecutors allege that Ley deceived Wirecard’s investors and creditors by inventing the outsourced business in Asia. According to prosecutors, the operations, which accounted for half the company’s revenue and almost all its profits, were used to inflate its results and share price.

Braun, Oliver Bellenhaus, a former Dubai-based executive, and Stephan von Erffa, Wirecard’s former head of accounting, have been accused by prosecutors of similar deception.

Ley denied the charges. In a statement on Thursday, his lawyers said: “Our client did not take part in criminal activity that is asserted in the indictment.”

The evidence to support the charges was “highly controversial” and in large parts based on “dubious statements” from Bellenhaus, who during the trial has implicated Ley, the statement said.

Braun and von Erffa also deny wrongdoing and accuse Bellenhaus, who turned chief witness for prosecutors, of fabricating the allegations.

Braun claims that Wirecard’s outsourced operations were real. During his trial, the ex-chief has blamed Wirecard’s former second-in-command, Jan Marsalek, who has been on the run since June 2020, and Bellenhaus of having embezzled the proceeds from the operations.

In a letter sent by his lawyer to the court this summer, Marsalek claimed that Wirecard’s third-party acquiring operations survived the group’s collapse and continue to exist.

Under German law, Munich’s district court will now assess the charges that prosecutors have made against Ley and decide whether to put the former CFO on trial.