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The Man Who Could Explain the $2 Billion Wirecard Mystery Is Missing

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On a cool Saturday evening in March, Jan Marsalek headed across Munich for dinner at the home of a friend. It was a welcome respite for the chief operating officer of German payment processor Wirecard AG, as the previous few weeks had been particularly exacting. Allegations of accounting fraud at the fintech company were growing louder, and the press, auditors, and even Wirecard’s board wanted answers—from Marsalek. The small group, including a Russian diplomat, dug into a barbecue spread washed down with ample amounts of vodka, and by the end of the evening Marsalek had consumed two bottles by himself. Then things got weird.

Marsalek, a trim Austrian with a buzz cut and a taste for bespoke suits, lay on the ground, muttering and crying for a good half-hour before his girlfriend scooped him up and drove him home. The other attendees shrugged it off as a response to the Wirecard grind—perhaps overly dramatic—or because he’d recently turned 40. But a few weeks later, it became clear something much bigger was afoot as Wirecard tumbled into insolvency and Marsalek went missing in one of Germany’s biggest corporate scandals ever.

Suspicions of wrongdoing had swirled around Wirecard for years, yet auditors signed off quarter after quarter on books that now appear to be clearly cooked. Every time new allegations of accounting irregularities surfaced, Wirecard pushed back with rosy forecasts and a clean bill of health from auditors, winning more time to stave off failure. But it was bound to collapse, and collapse it did after the company on June 22 said more than $2 billion in cash it had reported as missing likely never existed.

It took more than a decade for Wirecard’s stock to climb above €100, but only a few days for it to plummet into penny-stock territory. Wirecard’s fall has reverberated in Berlin’s political establishment, which had seen the company as an avatar of Germany’s tech ambitions, a new-economy juggernaut to rival Silicon Valley’s giants. The country’s biggest companies specialize in automotive and engineering—sturdy and reliable but with a whiff of yesteryear. Wirecard, which appeared to be booking fat profits processing online payments for companies worldwide, heralded a bright future. Chief Executive Officer Markus Braun built close ties at the chancellery, senior politicians toured Wirecard’s offices on the outskirts of Munich, and its executives joined official government delegations abroad.

That all ended last summer, and today German lawmakers are stepping up their inquest into the affair, grilling witnesses at regular virtual hearings. Braun is in detention, his wingman Marsalek is on the run, and regulators and top auditing firms are facing questions over their failure to spot the fraud.

This story is based on interviews with former colleagues and friends of Marsalek, who spoke on condition of anonymity to discuss private matters. Braun, who didn’t reply when contacted through his lawyer, is likely to remain behind bars for months while authorities prepare charges.

Hours after being suspended from his job on June 18, Marsalek vanished and is now on Interpol’s most-wanted list. Two photos of him—in one he’s sporting a thick beard and the other a day or two of stubble—are displayed on wanted posters and billboards at subway stations, bus stops, and traffic junctions across Germany.

Marsalek no longer replies to messages to his mobile phone, and his lawyer in Germany didn’t respond to a request for comment. On June 20, Marsalek texted Bloomberg News saying, “Sorry for all the trouble we’re causing.” Five days later, in an exchange with a confidant via the Telegram messaging app, he said he hadn’t “decided yet whether to return tomorrow or stay here with my friends”—without specifying where “here” might be. Media speculation over his whereabouts smacks of a spy novel: Is he hibernating in a compound outside Moscow? A secret hideaway in Turkey? A tropical island? German authorities have put a team of specialist manhunters on Marsalek’s trail, so far to no avail.

Marsalek joined Wirecard in 2000 as an IT project manager and quickly built a reputation for programming, gaining the attention of Braun, a fellow native of Vienna. The two Austrians made an odd alliance. As he rose in the company, Marsalek graduated from the typical coder garb of baggy jeans and T-shirt to tailored suits, starched shirts, and Vacheron Constantin timepieces. Braun went the other direction, exchanging his suit and tie for black turtleneck sweaters and rimless spectacles, styling himself as a Germanic Steve Jobs.

In the early 2000s, before Marsalek became COO, the duo often toured Munich’s nightclubs and were regulars at Pacha Bar, an expensive blend of watering hole, restaurant, and dance hall. On dimly lit leather sofas, Braun and Marsalek would crack open magnums of Champagne to toast successes. Unbeknown to Braun, Marsalek sometimes ordered tea to avoid getting overly drunk on the bubbly.

As Braun’s consigliere, Marsalek was tasked with keeping Wirecard’s global business humming—and expanding. A pillar of its early success came from transactions few others would touch, such as processing payments to businesses related to gambling and sex while obscuring the nature of the transactions. In payment processing, merchants are sorted into hundreds of categories, ranging from bakeries and betting parlors. Some Wirecard programmers have spoken openly about masking merchants’ identities, which can facilitate money laundering and circumvent laws banning online gambling. From that dross, the duo spun Wirecard into a global payment player.

Braun took the company public in 2005, and its shares rose dramatically as investors rushed to grab a piece of the market for online payments—making Braun a billionaire. After buying his 7% stake by pledging shares against a loan of €400 million ($475 million), Braun was fixated on Wirecard’s price, constantly urging his PR department to spew out releases about partnerships to stoke demand. In 2018, Wirecard replaced Germany’s second-largest lender, Commerzbank AG, in the benchmark DAX index. Shareholders “made a lot of money with Wirecard over the years, so they tended to believe the company,” says Leo Perry of Ennismore Fund Management in London, who shorted Wirecard’s stock prior to the collapse. “Most investors aren’t interested in truth, but in returns.”

Although Wirecard touted its roster of A-list customers such as discount grocer Aldi and French phone company Orange SA, the bulk of its revenue came from opaque outside partners that processed payments in countries where Wirecard held no license. The insolvency administrator sifting through what’s left of Wirecard now says the profits booked from those vendors were largely fictitious, and loans to the partners enabled Marsalek to funnel money out of the company. Wirecard said some 300,000 merchants used its platform in 2019, but the vast majority were tiny; only about 200 generated annual transactions above €100 million, and fewer than 20 cleared €1 billion. Authorities now allege that the bulk of Wirecard’s business came from bogus transactions with three companies, orchestrated by a small cadre around Marsalek. The insolvency lawyer’s report said that without those fake sales, Wirecard wouldn’t have been able to claim it made a profit.

Suspicions about Wirecard’s assets—initiated with investigations by the Financial Times—grew along with the company’s status. In February, just a few weeks before his barbecue breakdown, Marsalek made a trip to the Philippines to prove to increasingly skeptical auditors and his own supervisory board that Wirecard could access €1.9 billion it claimed to hold there. After greeting representatives from accounting firms EY and KPMG at the Manila airport, he took them on a tour of BDO Unibank and Bank of the Philippine Islands (BPI). There, Marsalek and bank employees produced documents showing the existence of the funds.

The auditors hadn’t come to establish whether the money was real. They simply wanted to know whether the sum should be accounted for as free cash or as some less-liquid financial asset. The math mattered because it helped lenders determine how risky it was to extend credit to Wirecard. The trip apparently helped dispel some of the accountants’ suspicions, though not for long as KPMG a month later said it couldn’t verify large payments into some trust accounts by partner merchants.

Back in Munich in mid-March, Marsalek was confronted by Wirecard’s new chairman, Thomas Eichelmann, who’d started digging into the company’s accounts after taking over the job in January. Demanding proof that the Manila money was available, Eichelmann suggested the company transfer €100 million from the two Philippine banks to Germany. With his concerns growing, he’d asked KPMG to conduct a special audit, and accountants there—fretting that something was seriously awry—boosted the required payment to €400 million.

Marsalek frantically engaged in circular transactions, wiring money to Manila to book it back to Germany in a desperate attempt to prove its existence, according to a person familiar with the details. But he couldn’t come up with the entire amount. Early on June 18, Marsalek sent a text message to an acquaintance that Wirecard was about to postpone its annual report because EY had indications that the €1.9 billion on the balance sheet was spurious—a revelation certain to set off a cataclysmic chain reaction. Still, Marsalek didn’t seem alarmed, telling his friend that he was continuing talks with the Filipino bank. Wirecard might even retract the delay that same day, he texted, though he admitted a U-turn could make the company a “national joke.”

Any hope he would reverse his fortunes and those of Wirecard were crushed later that day. Braun summoned Marsalek into his office, and the two sat side by side at a long conference table, with Braun doing the talking, according to an employee who briefly entered the room. If Marsalek tried to save his job, he was unsuccessful. Shortly after 6 p.m., Wirecard sent out a terse statement saying the COO had been suspended. Marsalek texted a friend that he would drop by that weekend in Starnberg, an affluent lakeside enclave south of Munich. He later canceled, saying he’d gone back home to Austria, and he’s been on the run since.

The wheels swiftly came off the Wirecard express. On June 22, the company stunned investors by disclosing “a prevailing likelihood” the €1.9 billion didn’t exist. The stock quickly lost 99% of its value, and within a week Wirecard said it was filing for insolvency. Never before had a company listed on the DAX gone bust.

Authorities have interviewed more than 100 potential witnesses in an effort to reconstruct the activities of Marsalek and his team and to understand who inside the company might have been complicit. Among the questions is whether Wirecard had ever been legitimate—or if it was built on criminal intent from the start. The company’s structure ensured that only a handful of senior employees likely knew that the numbers for processed transactions were inflated. The 200 people in Wirecard’s payment and risk department could see details of transactions and volumes only in the region where they were based, and few had access to global data.

After the scandal finally broke, both Manila banks, BPI and BDO, said the relationship purported by Wirecard and Marsalek was bogus and unauthorized. A preliminary investigation by BPI revealed that an unnamed “very junior officer” of the bank had signed one document, and another signature looked like an outright forgery. BDO said paperwork claiming the existence of a Wirecard account with the bank was falsified. “As far as we know, about a third of Wirecard’s revenue and 80% of its profits were fraudulent,” says Karthik Ramanna, a professor of business and public policy at the University of Oxford. “A random sample would detect that, and it’s outrageous that EY didn’t.” EY has said the missing money was the result of a complex criminal scheme so elaborate that it long went undetected by any outsiders.

Investigators say a purchase in India four years ago illustrates one way Marsalek and his entourage managed to pocket roughly €1.5 billion. In 2016, Wirecard agreed to pay a Mauritius fund called EMIF 1A as much as €340 million, depending on future profits, for Indian payment company Hermes I-Tickets Private Ltd. EMIF had bought Hermes for some $40 million just a few weeks earlier, generating a windfall for the fund. A suit by Hermes’s previous owners alleges that Marsalek and a friend were behind EMIF, and that they walked away with a huge profit after engineering the rapid resale.

Although Marsalek’s alliance with Braun was tight, it wasn’t always smooth. Braun was notorious for his short temper, and he didn’t mind berating Marsalek in public. Marsalek often deliberately ignored Braun’s calls on his mobile, and when he did pick up, he stoically let the outbursts wash over him.

Braun kept his distance from employees, gliding in and out of the underground parking garage in his chauffeured Maybach limousine before being whisked into an elevator and up to his office. Marsalek was more gregarious. He staged boozy parties in a suite at the five-star Munich Mandarin Oriental hotel, where he’d theatrically saber open bottles of Champagne, cheered on by friends and business partners.

And Marsalek spent much of his time not at Wirecard’s headquarters, but at a palatial residence a 15-minute drive away on tony Prinzregentenstrasse. The neoclassical mansion that rents for €50,000 a month has 20-plus rooms over four floors connected via a glass elevator. The salon was furnished with sofas and armchairs from Italian luxury brand Giorgetti. The two kitchens bulged with rows of cognac, vodka, and gin bottles. In the basement, Marsalek had two intensive-care beds and supplies of medication for the Covid-19 pandemic.

The conference room next to Marsalek’s office in the villa was kitted out with noise-absorbing wall coverings and an antenna directed at the Russian consulate across the street—though the purpose remains a mystery. There’s a box with a pair of dueling pistols, sturdy boots and combat pants, and artifacts such as stone temple fragments, possibly from the Syrian city of Palmyra, which Marsalek had boasted of visiting with Russian soldiers the day after it was liberated from the Islamic State group in 2016.

A five-minute drive away, at a boutique on posh Maximilianstrasse, a tailor has a cashmere coat lined in exotic fur that Marsalek ordered. The executive paid a €20,000 down payment in cash, but he never retrieved the garment or settled the final bill. It’s still waiting, though he’ll have to plop down the money he owes—and decide to come in from the cold. —With Karin Matussek, Birgit Jennen, Cecilia Yap, and Sarah Syed

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