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Lawyer for Wirecard boss calls fraud trial allegations ‘absurd’ By Reuters

© Reuters. Former Wirecard CEO Markus Braun arrives in the courtroom as his trial continues, after the German payments company collapsed following a 2020 fraud scandal, in Munich, Germany Germany, December 12, 2022. REUTERS / Lukas Barth

By Jörn Poltz

MUNICH (Reuters) – Former Wirecard CEO Markus Braun began his defense in Germany’s biggest postwar fraud trial on Monday, as his lawyer dismissed allegations of wrongdoing at the against the defunct payment company as “absurd” and prejudicial.

Braun, 53, and two other managers are on trial for market manipulation and fraud and could face up to 15 years in prison if convicted.

Braun has always denied wrongdoing.

The collapse of Wirecard two years ago sent shock waves through the German political establishment and tarnished the country’s business reputation.

At the start of the trial last week, prosecutors accused Braun and others of being part of a gang that fabricated huge sums of phantom income through bogus transactions with corporate partners to mislead creditors and Investors.

They said the deception allowed Wirecard executives to siphon money from the company for years.

Braun’s defense attorney, Alfred Dierlamm, attempted to have those claims overturned in court on Monday. He told the court that Braun never sold his Wirecard shares and in fact took the initiative to bring in outside KPMG auditors to investigate Wirecard’s finances.

“It’s an absolutely absurd and wrong idea for a gang leader to act like this,” Dierlamm told the court.

He said Braun’s case had been compromised since Wirecard’s collapse and his client’s arrest in 2020, alleging prosecutors were biased and under pressure to find a culprit after another of Wirecard’s managers, Jan Marsalek fled abroad.

Braun’s attorney told the court that the main prosecution witness was the main perpetrator.

Dierlamm asked for the trial to be suspended to give the defense more time to review the documents, given the volume of “files that have been laid on our table”.

Founded in 1999 and based in the Munich suburb of Aschheim, Wirecard’s dramatic rise has transformed it from a payment processor for online pornography and gambling into a centerpiece for a new kind of German tech company that could rival the established titans of Europe’s biggest economy.

His disappearance rocked the German establishment, putting politicians who backed the company and regulators who took years to investigate on scrutiny.

After dispelling suspicions of wrongdoing from investors and journalists and successfully pressuring German authorities to investigate those scrutinizing its finances, Wirecard was forced to admit in June 2020 that €1.9 billion ($2 billion) was missing from its balance sheet.

Wirecard became the first-ever member of the blue chip stock index to file for insolvency, owing nearly $4 billion.

In court, Dierlamm questioned the credibility of statements made by Braun’s co-defendant, Oliver Bellenhaus, the former head of Wirecard’s Dubai subsidiary, who became a witness after surrendering to German authorities in 2020.

Bellenhaus’ attorney last week requested a reduced sentence for his client in recognition of his cooperation.

“Bellenhaus is not a key witness,” Dierlamm said. “Bellenhaus is the main perpetrator of a gang” whose sole purpose was to embezzle and embezzle company funds.

Another former executive, Stephan von Erffa, is also on trial. He publicly expressed regret over the events at Wirecard but denied orchestrating them. His lawyer said von Erffa did not wish to comment on the charges.

Marsalek, the former chief operating officer of Wirecard, is an international fugitive on Europe’s most wanted list whose whereabouts are unknown.

A verdict is not expected until 2024 at the earliest.

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