Thursday 2 July 2020 10:07 am

Regulator told about Wirecard 'link to laundering' last year

The financial watchdog was reportedly warned last year that Wirecard had alleged links to a scheme that used bogus online stores to conceal the processing of high-risk payments.

The Financial Conduct Authority (FCA) was given details of an operation where allegedly fake sites were used as a front for channeling gambling proceeds through the payments system, according to the Times.

Read more: Wirecard offices raided by Munich prosecutors over missing €1.9bn

Yesterday the newspaper reported that senior Wirecard staff had been linked to a network of British firms associated with alleged money laundering.

Employees were reportedly shareholders in a “company creation operation” in Consett, County Durham, which was subsequently shut down after a government investigation.

The watchdog is said to have been presented with evidence of a “transaction laundering” network that had a series of supposed connections to the now insolvent German payment firm.

Before the Open: Get the jump on the markets with our early morning newsletter

Transaction laundering helps disguise payments for things like weapons, pornography and gambling payments. In this case, the Times reports Wirecard was accused of being linked to a scheme processing European gambling proceeds, where online gaming is restricted.

Yesterday, German prosecutors raided Wirecard offices in Germany and two locations in Austria. It is part of a probe into the €1.9bn blackhole in its accounts, which led to the firm filing for insolvency last week.

Its auditor EY said there were “clear indications that this was an elaborate and sophisticated fraud”.

Read more: Wirecard ‘relied on small number of customers’

The regulator today said: “We cannot comment on specific allegations but we treat all such information seriously and take it into consideration in the supervision of our firms.”

Wirecard was contacted for comment.

Share: