By Elizabeth Hearst
The German Financial Intelligence Unit (FIU) reportedly failed to share multiple warnings about the controversy-stricken German payment processing company Wirecard with German authorities.
The anti-money laundering unit did not report warnings that the company was facilitating suspicious transactions to the relevant authorities before the scandal broke in June, as reported by Deutsche Welle.
According to German broadcaster NDR and Süddeutsche Zeitung, the FIU only handed over a small portion of information it had amassed in relation to Wirecard’s transactions.
The FIU is reported to have received around 1,000 reports in connection with Wirecard. It is believed it included 97 reports which potentially offered information in connection with the allegations surrounding Wirecard. Yet, the intelligence unit only forwarded a tiny proportion of the reports to Bavarian state police and public prosecutors office in Munich, according to reports.
A spokesperson for the prosecutors said that “only two reports from the FIU were received” prior to June 2020, of which both resulted in investigations. However, the FIU declared that it had passed information on 50 suspicious reports to the relevant authorities, with the majority originating after the scandal broke.
The FIU were tasked with investigating reports for offences including falsification of accounts, fraud, embezzlement, market manipulation and insider trading, and pledges to re-examine the evidence in the wake of the controversy.
A spokesman for the Munich public prosecutor said that “only two reports from the FIU were received” before June 2020, both of which had triggered investigations.
The unit has been criticized for delaying or withholding existing money laundering money laundering reports from police. Four state justice ministries have also filed formal complaints with the Federal Ministry of Justice against the FIU. They allege that the body neglected to uncover crimes outlined in the reports, or forward the reports too late.
Left Party politician Fabio de Masi described the unit as a “security time bomb”, and said “it urgently needs to be clarified whether it withheld information that would have allowed the criminal investigators in Bavaria to recognise the scandal earlier”.
The Chairman of the Association of German Criminal Police Officers, Sebastian Fiedler labelled the review process as a “security-policy catastrophe” and added that “there are countless other scandals in the data pool of the FIU”.
The Wirecard scandal erupted in June after it emerged that there was a €1.9 Billion hole in its accounts. The subsequent investigation has led to the arrest of its former CEO Markus Braun and the company has been plunged into uncertainty.