The former head of accounting at Wirecard has admitted to falsifying documents requested by KPMG during a special audit, ahead of a trial scheduled for the end of the year, according to people familiar with the matter.
Stephan von Erffa is one of three defendants in a case filed by Munich prosecutors for the spectacular fall of one of Germany’s largest-flying technology companies.
The 47-year-old is the first Wirecard senior executive to admit an offense since Oliver Bellenhaus, head of a Dubai subsidiary, turned himself in to authorities in July 2020 and became the main witness of the ‘accusation.
Wirecard went bankrupt in June 2020 after admitting that half of its declared revenue and € 1.9 billion in corporate cash allegedly held in collateral accounts in Asia did not exist.
Von Erffa is one of three Wirecard executives who were charged with fraud, breach of trust and market manipulation this year. He, Bellenhaus and former chief executive Markus Braun, who denies making them illegal, will face trial this year.
Von Erffa denied any involvement in the wider fraud and blamed the second fugitive on Wirecard command, Jan Marsalek, during a parliamentary investigation into the scandal last year. However, the police investigation found evidence that von Erffa in early 2020 falsified documents that were later shared with KPMG and EY auditors.
The documents were related to a payment of 50 million euros that Wirecard had received in 2018, allegedly from one of the Asian guarantee accounts and transmitted by a trustee at the request of von Erffa.
One year after payment, KPMG examined Wirecard accounts in a special audit. The investigation was launched by the supervisory board after the Financial Times in October 2019 raised questions about a possible balance sheet manipulation.
KPMG forensic investigators wanted to see von Erffa’s payment authorization for the € 50 million transfer. As this document did not exist, the chief accountant decided to make one, he told prosecutors, according to people familiar with the matter.
Using a private computer, where von Erffa delayed the system date to December 2018, he generated a backdated email and a simulated “custody application / authorization form” for 50 million euros, both seen by the FT.
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Von Erffa told prosecutors that the forgery was a unique and isolated case, according to people familiar with the matter. He said the transaction itself had been genuine and created a document to corroborate it under immense pressure from KPMG to provide evidence. He stressed that he had not been willing to falsify documents to review the company’s accounts.
The collapse of Wirecard, which at its peak was valued at more than 24 billion euros, caused shock waves to Germany’s financial and political elite. Wirecard’s longtime auditor, EY, did not detect fraud for years, while German financial regulator BaFin protected Wirecard from short sellers and prosecutors took action against critical journalists.
OCBC, the Singapore bank that allegedly had the accounts under collateral, told the Wirecard administrator after its collapse that it never had significant amounts of cash on behalf of the trustee and that some of the accounts did not exist at all. , according to documents seen by the FT.
Prosecutors established that the 50 million euros sent to Wirecard came from one of its Asian trading partners, which had previously borrowed 100 million euros from Wirecard and returned half of the money through a series of opaque companies to obscure its origin, said people familiar with the matter.
Munich prosecutors and a von Erffa lawyer refused to comment.
Video: Wirecard and the missing 1.9 billion euros: my story