BERLIN/MUNICH (Reuters) – German prosecutors said on Monday they had arrested the head of a Dubai-based subsidiary of Wirecard, widening the circle of suspects in a multi-billion-dollar fraud investigation into the collapse of the payments company.
The Munich prosecutor’s office said in a statement it had questioned the chief executive of Cardsystems Middle East FZ-LLC earlier in the day and arrested him on the basis of a warrant.
The executive had travelled from Dubai and turned himself in, prosecutors said, without naming him. Unless defendants are publicly known, their identity can be protected under German law to avoid prejudicing legal proceedings.
The arrest was made on suspicion of conspiracy to commit fraud, attempted fraud and aiding and abetting other crimes, prosecutors said. Prosecutors fear there was a risk that he would flee or tamper with evidence.
Wirecard filed for insolvency last month owing creditors almost $4 billion after disclosing a 1.9 billion euro ($2.1 billion) hole in its accounts that its auditor EY said was the result of a sophisticated global fraud.
Investigative journalists, researchers and speculators had long highlighted Wirecard’s reliance on an obscure trio of third-party acquiring partners – one of which was Cardsystems – to generate the bulk of its reported revenue and profit.
The latest arrest came after police and public prosecutors raided Wirecard’s headquarters in Munich and four properties in Germany and Austria last Wednesday as they widened their investigation.
Prosecutors are treating Wirecard’s Chief Financial Officer Alexander von Knoop and Chief Product Officer Susanne Steidl as suspects, in addition to former Chief Executive Markus Braun and chief operating officer Jan Marsalek.
Braun, who was arrested and released after posting 5 million euros bail, remains a suspect. Marsalek’s whereabouts are unknown and his lawyer is declining requests for comment.
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