Daniel: A company's cash disappears. Not a little bit. €1.9 billion. The company says it's a victim of a massive fraud. The auditors say the money probably never existed in the first place. Sophia: Wow. That sounds like the plot of a Hollywood blockbuster. Daniel: It does, but this isn't a movie script. It's the story of Germany's biggest corporate scandal, and how it was hidden in plain sight for years. And it's all laid out in the incredible book we're diving into today: Money Men: A Hot Start-up, a Billion-dollar Fraud, a Fight for the Truth by Dan McCrum. Sophia: Right, and McCrum wasn't just some author who came to this after the fact. He's the Financial Times journalist who spent six years investigating Wirecard, facing down lawsuits, spies, and smear campaigns. This book is his personal, harrowing account of that fight. Daniel: Exactly. It's a story that's been widely acclaimed, often compared to classics of investigative reporting like Bad Blood. It’s a true financial thriller. And it all starts in a place you'd least expect: a chaotic, smoke-filled office on the outskirts of Munich.

Daniel: The story of Wirecard really begins in the early 2000s. Picture this: a new employee, Denis Wagner, goes for a job interview. The office is next to an airport runway, and the finance director who interviews him is chain-smoking. Wagner openly admits he knows almost nothing about payment processing. Sophia: And he gets the job, I'm guessing? Daniel: He does! The finance director tells him, "Denis, you’re really an honest man, I like your courage." That was the culture. It wasn't about qualifications; it was about a certain kind of personality. The company's owner, Paul Bauer-Schlichtegroll, had gotten his start publishing Hustler magazine in Germany. He saw the future was online, but he needed a way to process payments for... let's call them 'high-risk' industries. Sophia: High-risk as in... porn and gambling? Daniel: Precisely. That was Wirecard’s bread and butter. While other fintech companies were trying to be the next PayPal for legitimate e-commerce, Wirecard specialized in the stuff traditional banks wouldn't touch. They became the go-to payment processor for the underbelly of the internet. Sophia: Okay, but how does a company built on processing payments for porn and online casinos become a tech darling on the German stock exchange, valued at over €20 billion at its peak? Daniel: Through some very clever, and very shady, financial engineering. First, they went public not through a traditional IPO, but through a 'reverse takeover' of a nearly defunct company called InfoGenie. This let them bypass a lot of the usual scrutiny. Then, they started playing games with their accounting. Sophia: What kind of games? Daniel: They created complex systems to hide what they were doing. For example, online gambling transactions have a specific code—7995—that many banks automatically block. Wirecard developed ways to miscode these transactions or route them through shell companies, often set up in depressed former steel towns in the UK, to make them look like legitimate purchases. Sophia: So they were essentially laundering transactions from the very beginning. Daniel: That's a good way to put it. And the man at the center of the tech side of this was the infamous Jan Marsalek. He was a young, charismatic Austrian who, according to the book, once told his team, "The problem with us Austrians, is we always want world domination." He famously admired the business model of Red Bull, saying, "Behind the brand is nothing but air. Isn’t it brilliant?" Sophia: That's... a telling philosophy. He saw the company as an illusion from the start. Daniel: It seems so. He embodied this culture of ambition and a complete disregard for the rules. They weren't just building a payment processor; they were building a narrative, a story of a tech visionary. And for a long time, the market bought it hook, line, and sinker. They were seen as Germany's answer to Silicon Valley. Sophia: A house of cards, then. Built on a very shaky, and very sleazy, foundation. But a house of cards is bound to get a little wobbly. What happened when people started poking at it? Daniel: That's when the story goes from a financial investigation to a full-blown spy thriller.

Sophia: Okay, so they're a house of cards built on a shady foundation. But how did they get away with it for so long? And what happened when people started poking around? Daniel: The pushback was immediate and brutal. In 2008, a stock market newsletter writer named Tobias Bosler did some digging, realized Wirecard's cash flow didn't add up, and started betting against the stock—short-selling it. Sophia: A brave move. Daniel: And a dangerous one. Wirecard's legal advisor found out and invited Bosler to a meeting. But before the meeting, the lawyer was visited by two Turkish boxers, sent by Wirecard's founder, Paul Bauer. They found Bosler in his office courtyard, punched the wall next to his head, and made it very clear he should back off. He closed his short positions two days later. Sophia: Hold on. They sent boxers to intimidate a financial analyst? That's not just aggressive, that's mob-level stuff. Daniel: Exactly. And this set the tone for the next decade. Fast forward to 2019, when Dan McCrum and his team at the Financial Times are deep into their own investigation. They have a whistleblower and documents proving fraud. They take it to their editor, Lionel Barber. Sophia: And he immediately publishes, right? This is the scoop of a lifetime. Daniel: Not so fast. The FT's lawyers were terrified. They brought in a Queen's Counsel, a top-tier lawyer, who gave them a chilling warning. He said, and I'm quoting the book here, "My advice is that you face significant risk that an injunction would be sought and granted." An injunction would stop the story from being published and give Wirecard time to cover its tracks. Sophia: The legal system itself was becoming a tool to protect the fraud. Daniel: And it gets worse. In one of the most shocking twists of the entire saga, the German financial regulator, BaFin, didn't investigate Wirecard. They launched a criminal investigation into Dan McCrum and his colleagues at the Financial Times for alleged market manipulation. Sophia: Wait, the regulators investigated the journalists for exposing fraud? That's insane. It's like calling the fire department and they arrest you for reporting the fire. Daniel: It's unbelievable, but it happened. There was this sense of national pride. Wirecard was a German champion, a DAX 30 company. The establishment couldn't, or wouldn't, believe it was a fraud. They preferred to believe it was under attack from malicious foreign short-sellers and journalists. Sophia: So the very institutions meant to protect the market were actively working against the truth. What was Wirecard's official response to all this? Daniel: Pure, unadulterated arrogance. When McCrum finally got CEO Markus Braun on the phone and confronted him with the evidence, Braun's response was legendary. He said, "That’s all bullshit, sorry to say it so openly. You must take one thing into account, at a successful company there are always people around who are jealous, who are full of emotion." Sophia: He's blaming it on jealousy? For a multi-billion dollar fraud allegation? The audacity is breathtaking. Daniel: It was their entire strategy. Deny, deflect, and attack the messenger. They hired private investigators, former spies, and hackers to surveil journalists and their families. It was a full-scale intelligence operation designed to silence them. Sophia: This is so much bigger than just a business story. This is about the failure of institutions and the power of a corporation to bend reality to its will. Daniel: It is. But as we know, reality has a way of catching up. And the final act of this drama was as farcical as it was tragic.

Daniel: The lies could only hold for so long. Eventually, the pressure from investors and the FT's reporting became so intense that Wirecard had to agree to an independent audit by KPMG. They had to finally show the world the money. Sophia: And this is where the famous missing €1.9 billion comes in. Where did they say it was? Daniel: Initially, Jan Marsalek claimed he'd forgotten the name of the trustee holding the money. Then, he said it was in the Philippines. So, in March 2020, a delegation from KPMG and the auditors from Ernst & Young (EY) flew to Manila to verify the funds. Sophia: This must have been a tense, high-stakes trip. Daniel: Tense is an understatement. The whole thing was a circus. They were met by a lawyer named Mark Tolentino, who had a YouTube channel focused on family law and political ambitions. He arranged a police escort for the auditors, sirens blaring, just to get through Manila traffic. He told them, "I don’t like to wait in traffic." Sophia: A police escort to go 'find' two billion euros? This sounds like a comedy sketch, not a corporate audit. Daniel: It gets more absurd. They'd go to a bank branch, Tolentino would give a long speech about his own prestige, and then a bank employee would hand over a piece of paper 'confirming' the balance. The auditors were in the banks for mere minutes. It was pure theater, designed to create the illusion of legitimacy. Sophia: And the auditors bought this? Daniel: Not entirely. The team from EY was deeply suspicious. They noticed documents were misspelled. They asked Wirecard to prove they could access the cash by transferring €440 million. The money never moved. Finally, EY went over Wirecard's head and contacted the CEOs of the two Philippine banks directly. Sophia: And what did the banks say? Daniel: This is the moment the entire house of cards collapses. The banks, BDO and BPI, sent letters back to EY. The key line, which will go down in corporate fraud history, was: "Please be informed that the attached documents are spurious." Sophia: Spurious. What a word. It's so polite for "completely fake." Daniel: Exactly. Forged. The money wasn't there. It had never been there. The €1.9 billion was a ghost. On June 18, 2020, Wirecard was forced to announce to the world that its auditors couldn't find a quarter of its balance sheet. Sophia: And that was it. The game was up. Daniel: The game was up. The share price plummeted over 95%. CEO Markus Braun resigned and was arrested. And Jan Marsalek, the mastermind, vanished. He reportedly fled on a private jet to Belarus and remains one of Interpol's most wanted men. The German tech champion was exposed as one of the biggest, most audacious frauds in modern history.

Sophia: So when you step back from all the spies and the missing billions and the boxers, what's the real lesson here? What does the Wirecard saga truly tell us? Daniel: It's a story about the power of a good lie, but also the incredible power of persistence. Wirecard thrived for so long because it told a story that everyone—investors, regulators, politicians, the media—desperately wanted to believe. The story of a German tech champion that could take on Silicon Valley. Sophia: We wanted the hero, so we ignored all the signs that he was actually the villain. Daniel: Precisely. It exposes a deep, uncomfortable flaw in our system: we place enormous trust in institutions, in auditors like Ernst & Young, in regulators like BaFin, and in polished, turtleneck-wearing CEOs like Markus Braun. We're often blind to massive fraud happening in plain sight because it's easier to believe the simple, successful story than the complex, ugly truth. Sophia: And the only thing that brought it down was the work of a few stubborn people. Daniel: The relentless, thankless, and often dangerous work of a few stubborn outsiders. Journalists like Dan McCrum, short-sellers, and whistleblowers who refused to accept the official story. They were attacked, smeared, and investigated by their own government, but they kept digging. It's a testament to the fact that sometimes, the truth only comes out because a handful of people refuse to give up. Sophia: It's a powerful reminder to question the narrative, especially when something seems too good to be true. And it really makes you appreciate the vital role of investigative journalism in a world full of convincing stories. Daniel: Absolutely. And it makes you wonder, what other 'too good to be true' stories are we all buying into right now? We'd love to hear your thoughts. Find us on our socials and join the conversation. Sophia: This is Aibrary, signing off.