Hidden as a orthodox priest!
"Then came June 2020, when, in the midst of an audit, Wirecard could not locate €1.9 billion in assets it claimed were being held somewhere in the world"
EY audited them for years without asking about the missing billions.
The Netflix documentary [1] on the Wirecard scandal [2] is great.
The book it's based on, Money Men by Dan McCrum, is also a spectacular read.
It is a good book, but it isn't completely candid about one part of the FT's investigation.
When Dan McCrum was under threat of arrest in Germany, that was because Paul Murphy, Dan's editor, did in fact give away to some of his contacts the fact that they were coming out with a negative story on Wirecard and the time it would be published. Murphy has form for trading his own scoops with stock traders for favours. The Wirecard recording of one of Murphy's mates talking about shorting Wirecard to take advantage of the story is accurate and had Murphy (but I very much doubt McCrum) bang to rights.
McCrum's explanation for this is that Murphy's associates knew the exact time of the story being released because they had happened to guess it by sheer luck. Clearly if that's what Murphy told him he should have been a little more skeptical.
Ultimately the FT's internal investigation into Paul Murphy's behaviour and BaFin's into McCrum's work were abandoned for the same reason: the Wirecard revelations were legit, and much more serious than Murphy's breaches of journalistic ethics.
Ah, the "FT is conspiring with shortsellers to ruin Wirecard" BS Wirecard was aggressively pushing back the day.
Just shows how persistent lies and propaganda can be.
Eh? That's not the argument. The argument is that an FT editor couldn't keep his mouth shut ~and was complicit in insider trading.~
The other (baseless) accusations you're talking about (and that led BaFin to investigate the FT) are extensively covered in the book.
Edit: Not sure it was insider trading, or illegal. Just probably not in line with FT standards.
it probably technically wouldn't be insider trading in the US but I think the laws may be different in Europe.
It’s not insider trading as there is no material non-public information involved. Were the information false, it would likely be actionable market manipulation. But because the information was true, from the perspective of the authorities nothing wrong here.
On the other hand, there may be ethical (but not legal) issues from the perspective of the publisher.
Given FT had no financial interest in wirecard I’m not sure it’s insider trading? Breach of the code of conduct of FT and basic journalistic ethics of course, but using investigators to find out bad things about companies and using that information to trade is pretty normal and not insider trading
You do know that there is a difference between letting information slip and actively participating in insider trading?
Knowing that a negative article will be published about another company is not insider information?
I'm pretty ignorant of this issue.
But if the trade came up as a matter of an investigator researching a company, and communicating with people about the details. Even if they disclosed the exact time they planned on publishing this information, is it insider trading?
Wouldn't you have to been privy to information from inside the company itself? Otherwise anybody could have investigated this person, and had equal opportunity to discover negative things to expose?
McCrum had already pointed out that Marsalek was at least looking for connections intelligence services, had confirmed connections to at least some former intelligence operatives, and that there were a lot of pieces of evidence that pointed to the strong possibility of connection to Russia. He just didn't find definitive proof, but that was also not the primary focus of his book.
Yes the book mentions towards the end that Marsalek's location was unknown, but possibly in Russia or Belarus where Interpol would not be able to do much.
Very good read, especially for those who enjoyed Bad Blood, the Theranos book by the WSJ reporter who helped uncover the scam.
Another author but a fascinating New Yorker article on the same subject
https://www.newyorker.com/magazine/2023/03/06/how-the-bigges...
Indeed. Dan McCrum is prominently figured in the documentary as well.
Highly recommended as well from my side!
requires a total remake considering all the extra context coming to light now.
The documentary was pretty clear about it being 99% certain Marsalek was connected
"King Of Stonks" [1] is also pretty entertaining and inspired by the Wirecard scandal and pretty fun to watch.
Are there other news sites carrying this?
The stories about the threats against the journalist Dan McCrum who was investigating Wirecard between 2014 and 2020 are mental.
I've just checked and McCrum has shared this link as well on Twitter so I count that as a reason to trust it.
It was in cooperation with a lot of the main german news outlets like "Der Spiegel"[1] and "der Standard"[2] both are german tho ;) [1] https://www.spiegel.de/politik/deutschland/wirecard-skandal-... [2]https://www.derstandard.de/consent/tcf/story/3000000209638/m...
Thank you. Der Spiegel had a paywall as well which slowed me down
I know I am nitpicking, but "Der Standard" is Austrian.
And there I was, believing Marsalek was just another useful idiot, and not a full blown GRU operative.
I ahve to say, I am impressed a little bit. Just puzzled about the whole goal of this operation. And bit worried the Wirecard management standing trial right now, can use this to get away with the fraud they actively engaged in.
I have not yet read the above linked article, so maybe it already says (or refutes) this, but the long-held rumor was that Wirecard was a useful mechanism for Russians to move around dark money--e.g. for sanctions evasion or payola.
Don't forget money laundering. It is just tad too high profile for my, compketely unprofessional, taste. Worked long enough so, didn't it?
Goal - money laundering in Europe via a well known and respected payment processor. Full stop.
They broke the story, so I think if anyone else is carrying it, it will be framed as "new report says X" rather than their own independent reporting. But Michael Weiss has written for the Daily Beast, New Lines Magazine, CNN, etc., and Christo Grozev runs Bellingcat, which has a long track record of breaking big stories and winning investigative journalism awards, especially vis a vis Russia.
It's not the first story like this and not the last.
Right now there is still NASDAQ traded "Freedom Holding Corp" (FRHC) originated from Kazahstan with primary business of fueling sanctioned Russian money and doing other shady business in ex-USSR. Everyone knows they mass open accounts for Russia residents remotely and no one cares.
It's not like there are no other banks doing the same, but none of them are owned by US-based entity traded on NASDAQ. SEC certainly wont care until it implode on thousands of retail investors. Going after crypto is far more important.
And there are more financial institutions that have banking licenses around the globe (including US, EU and UK) with primary source of income from money laundering and again no one cares until they grow too big or scam all their customers and investors.
Any idea as to why they haven't been investigated and/or de-listed? Is it really just that no one cares? That seems insane to me but I don't know much about the financial services space
Any idea as to why they haven't been investigated and/or de-listed?
I'm not SEC to know that.
Is it really just that no one cares?
There was some investigation by Hindenburg Research, but since it's mostly OSINT with bunch of forum screenshots and public records it did not gain that much publicity:
https://hindenburgresearch.com/freedom/
PS: Just to be clear my source of information is not some journalist aricle or Hindenburg Research. I just opened said bank account for myself along with many many other people who never in their life been to Kazakhstan.
It actually gained a lot of publicity because Hindenburg has a pretty good track record and many people are paying attention to them. There is zero chance financial regulators didn't see it. FRHC got a law firm to review some of their allegations: https://finance.yahoo.com/news/freedom-holding-corp-announce.... (I have no position).
Yeah they hired some law firm to cover for them.
Except even last month they been opening bank accounts for anyone and everyone left and right including providing means for very-very-shady registration of Kazakhstan Tax-ID (SSN) remotely.
And until a week ago you could literally send money from a bank cards of some Russian sanctioned banks to them and it just worked. Now when Russia payment system provider itself been sanctioned it's no longer works, but fortunately now they'll gladly accept money transfers from their ex-subsidiary that they of course sold a year ago, etc.
Again it's very much possible that from legal standpoint everything they do is "legal". Just dont be surprised why Wirecard wasn't caught by EU authorities earlier. I pretty certain Wirecard also had great law firms working for them.
That's not how it works. It's a major independent law firm and there is no chance they'd risk their reputation to cover for FRHC. If there are problems with how FRHC operates (I have no idea), they'd just ask the law firm to investigate only specific legal things.
Why helping to exfiltrate the money out of Russia is bad? Don't you think that this is much better for the goals of the western sanctions than preventing money from going out of the country?
I'm a Russian guy (with a Freedom bank KZ account), who publicly condemn the barbaric invasion and thus is threatened by the homeland's so called authorities. A guy who left Russia after the war has started in order to stop at least paying taxes that fuel this war (and to avoid being sent to the frontline as well). Who have been living, working and paying taxes in the EU since then. I want the war to stop ASAP from the very first day. As well as having the responsible maniacs to face the trial.
And I see many of the sanctions counter-productive.
Can you imagine what it took to get my savings (before calling it "blood money", keep in mind, that I always supported the opposition, never worked for the government-affilated entities and tried my best to prevent this war) to the European banks with all this witch-hunt and passport-based discrimination.
Would you really prefer my money to stay in Russia and work for the benefit of the war?
You really missed point of my post here. This is not about sanctions or getting money out of Russia. It's about the fact that one big piece of money laundering institution with very shady finances being owned by US holding company that is traded on NASDAQ. That's it.
SEC is going after everything related to crypto, but gives no damns about some bs money laundering operation being traded on NASDAQ. This is exactly what Wirecard was in EU, but on smaller scale.
You have a point. On the other hand, some actions can serve as a sort of surveillance. Where exactly goes the money? It is like a honeypot or observing your suspects.
Shutting down would undoubtedly help, on the other side, understanding systems and beneficiaries needs to be handled in a different manner.
That's all great until one day said banking group land on SDN sanctions list losing everything that retail investors who been dumb enough put into it. There are plenty of Turkish and UAE banks that do the same money laundering, but they are not traded on NASDAQ.
UPD: In any case my point is not talking about this situation specifically, but just pointing out US has it's own Wirecard and likely are there far more than one example. This is just one I know.
Next up, Solaris Bank and Vivid Money, that is, if BaFin wakes up.
Why solaris bank? A lot if startups are relying on them, what‘s wrong with them? Though TradeRepublic moved away from them, makes you wonder.
Last I've heard BaFin actually appointed a special investigator [0] to Solaris
[0]: https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Massn...
Though TradeRepublic moved away from them, makes you wonder.
TR got its own full-bank license a few months ago [1], it makes sense for them to consolidate stuff in-house instead of paying third parties for their services. That is useful as a startup with a few thousand customers, as the requirements of actually building a bank tech stack are quite massive, but TR has >4M customers now and makes a profit [2].
[1] https://www.capital.de/geld-versicherungen/trade-republic-er...
[2] https://www.businessinsider.de/gruenderszene/fintech/neobrok...
Solaris Bank is Deutsche Bank.
what?! no, they are a german bank (which translates to "deutsche bank" in german) but there is no connection (afaik, my infos are 2+ years old now) between Solaris and Deutsche Bank AG.
Which could be used as another reason to look into them, right?
Then as now, the internet’s truly big business came from revenues connected to gambling and pornography
This is an idea you hear quite often, but seems very unlikely to be actually true. Internet's truly big businesses are the truly big businesses of the big tech companies
I'd agree. Big tech is used all day, every day. People aren't browsing porn sites while they're at work (at least, most aren't). However, I can't imagine how many people are browsing at night.
Being at work doesn't preempt anybody from using their phone. A lot of people watch porn without necessarily needing to excuse themselves.
But they are very much browsing their fantasy sports gambling sites.
And they browse porn at work more than you think.
Story time:
Stupid youngster me is tasked with getting the "tape out" of one of our microprocessors designs to Taiwan. I dutifully calculate that at the current rate of upload, it's going to take almost a week in spite of the fact that we have a solid OC-3 that should make short work of it. That's not going to fly. So ... off to IT I go...
"Hi, Mr. IT, I've got a bandwidth problem getting this tapeout to Taiwan. Can you bump my traffic in priority so I can get this out?"
Tap ... tap ... tap.
"Sigh. Yes, Mr. Exuberant Youngster, we can solve this. Give it an hour."
"Thanks." I troop back up to my desk.
5 minutes later a global email appears from Mr. IT ...
"Hi, folks. We're starting a system audit sweep of all the computers for inappropriate access. Yes, you know what that means, all those videos that you shouldn't be watching at work ... yeah, stop that, post haste. We should be done 48 hours from now. Thanks."
A quite remarkable amount of clicking in the cubicle farm suddenly begins. And, of course, my bandwidth suddenly jumps through the roof.
I ... am ... agog.
I walk back up to Mr. IT: "Erm ... thanks. But, what just ... happened? And ... why?"
Mr. IT, with a huge grin replies:
"No problem. You needed bandwidth; so I got you bandwidth. As for why? Well, I can go through the work of prioritizing your traffic which requires that I log into the external gateway, set up rules, get them correct, let you upload, remember the reset the rules and not hose the entire company while doing so. Or I can get all dipshits watching porn at work to stop for a day or two by announcing a system audit. Which do you think is easier and less error prone for me?"
Youngster me got an important lesson that day that there are often multiple solutions to the same problem.
Using Big Tech and paying money are two different things. A US user is worth about $13 each quarter to Facebook. A customer on a cam site will pay more than that for a minute private show probably. One porn DVD, etc.
One example: 0.7% of the countries GDP for the Philippines is related to their gambling infrastructure: https://en.m.wikipedia.org/wiki/Philippine_Offshore_Gaming_O...
The CEO of the company was Markus Braun, a former KPMG consultant from a middle-class family in Vienna. Braun modeled his appearance on Steve Jobs, always wearing a black turtleneck and wire-frame eyeglasses
Didn't Elizabeth Holmes do that too?
Never trust people who consciously dress like Steve Jobs on days other than Halloween.
I wear glasses and i wear turtleneck in the winter. I am bit trying to emulate Jobs, I just dont want my throat to be exposed to wind.
I wear glasses and i wear turtleneck in the winter. I am bit trying to emulate Jobs, I just dont want my throat to be exposed to wind.
Just don't wear a black one and you're fine.
Not unlike the toothbrush mustache, black turtlenecks have been ruined for everyone.
This is what actual reporting looks like.
Look at most news stories these days. There's some kind of conflict, two parties don't agree on something, and they report both "sides" of the story. Because the writers don't know what really occurred, it's common that a news story will give equal weight to lies and truth (or semi-truth and semi-truth).
In the insanity of normal society, this is actually promoted as a good thing. News stations pat themselves on the back for being "fair and balanced", and use it as proof of being "unbiased".
It's the opposite of unbiased, when there's no bias there are no "sides". You can't take both sides in a conflict, each "side" being a heavily biased opinion in itself, and combine them together to create a lack of bias. That's not how it works, two conflicting partial truths don't equal a whole truth, two conflicting partial truths just create cognitive dissonance (FUD).
Now look at this news story, it's quite different from what I described above. It's proper investigative journalism where the goal is cutting through opinions and second-hand information to find the actual truth. It's a major accomplishment and something to be applauded.
In my heavily-biased opinion, it's the job of a free press to seek and report the truth, to create new stories like this one, not to report "both sides".
And to illustrate when I'm saying, look at what happens to be the #1 story on my Google News at this moment: https://www.cnn.com/2024/02/29/middleeast/gaza-food-truck-de...
CNN doesn't know exactly what happened, there's conflicting stories, and all we know for sure is that a bunch of hungry Palestinians were just killed while trying to get food. Here's what CNN found:
According to Palestine it's Israel's fault.
According to Israel it's Palestine's fault.
Yes, clear as mud. It's the perfect kind of reporting for adding to the controversy and acting like there's no clear right & wrong, or viable solutions to the conflict. It's how I would do things if I wanted to extend the war as long as possible. However, I'm biased toward peace and preservation of life, so it's quite clear to me what's causing food riots and subsequent massacres.
When something newsworthy happens, like many civilian deaths around a food truck, people reading the news want two things: they want the truth, and they want it now. I agree with you that good journalism seeks the truth first of all - but that takes time and if everyone else is talking about that truck today, your news outlet has to feature that story too somehow. Maybe we'll have a proper investigative report on that truck in a week, or a month.
I remember that earlier in the war, when some kind of rocket struck a hospital in Gaza, Israel and Hamas also blamed each other - then President Biden said as far as his intelligence goes, it was Hamas and I think that's the consensus now? We might never know for sure, but in the immediate aftermath of the hit the options for a media outlet were basically "we don't know" or "it was definitely the side we don't like". The truthful answer until someone's done the investigation is the former, but that gets you the kind of article on CNN that you're pointing out.
I'll save you the headache: News media does not exist to inform you. In the actually existing real world that we live in, news media does not exist to inform you.
But it does inform me sometimes!
Cost of doing business.
Some of that is just that there's a 24 hour news cycle, and the event is out there so they have to report that it happened. It takes _time_ to untangle what really happened in an event like that, and it's not going to happen in a day.
With Schulz's truly strange behavior in stalling support for Ukraine, and involvement in the Wirecard and cum-ex scandals, I truly wonder if there might be some kompromat hanging over Scholz's head around this.
That's not new (in German) https://www.berliner-zeitung.de/wirtschaft-verantwortung/wir...
I still cannot believe the last photo in the article, showing him in his current disguise as an orthodox priest.
It's not him, but the man whose identity he apparently took. Says so in the image caption.
Meanwhile:
https://news.ycombinator.com/item?id=39560440
Entities like PayPal and Stripe are complaining they want less EU banking regulation.
Interesting story - sounds like Wirecard may have been a Russian version of the BCCI. For comparison:
https://irp.fas.org/congress/1992_rpt/bcci/11intel.htm
"The unofficial story of BCCI's links to U.S. intelligence is complicated by the inability of investigators to determine whether private persons affiliated with U.S. intelligence were undertaking actions such as selling U.S. arms to a foreign government outside ordinary channels on their own behalf, or ostensibly under sanction of a U.S. government agency, policy, or operation."
Not a surprise considering what Citizen Lab found out.
The UK has just concluded its investigation into “steakknife” - an IRA killer who was also working for British army and killed people on both sides seemingly with impunity.
I am guessing there is a mental hurdle in committing larger and larger crimes, but having “permission” from a government spy agency probably makes such things easier.
It’s ok to commit this crime - I have permission so it’s not really a crime.
The point is, no-one sees themselves as the bad guy.
Not a surprise but useful to have it confirmed
Everytime crypto gets harangued as a money laundering cesspool, I think of HSBC’s highest performing branch in Sinaloa and Germany’s fintech giant payment processor run by a GRU spy. As in two money laundering behemoths right out in the regulated open. Give me a break.
German (sp/h)ygh society, it's almost like any longterm spywar breeds a mafia, they are loyal first to themselves and their thiefdoms everywhere.
For people following the Wirecard story this isn't new.
delusions of grandeur strongly remind me of Paul LeRoux https://magazine.atavist.com/the-mastermind/
... also Kim Dotcom who I met personally before going on a run to Asia. He too had cardboard cutouts of himself as a cartoon character all over his Munich office of DataProtect. Funny that Kim Schmitz managed to settle in NZ and not Russia. He is an outlier, probably lacked the RU connection back then.
A throwback to the ancient world to the Middle Ages, hiding spies among the clergy!
Russian Orthodox church today is openly run by russian state officials, military, police, fsb members, etc.
They are also openly supporting invasion of Ukraine as a kind of "holy war".
The russian word for "non-government organization" is "foreign agent".
That's true, but there's a need to put that information in the proper context. First, there's nothing new or surprising about it, as the official Russian Orthodox church has historically been under the state's control. This goes back to middle ages and Tsars. It would not be reasonable to expect any opposition from them. And second, most of their faithful agree with them on the Ukraine issues.
The agreement of "regular Russians" is a very curious thing. From talking with Russians they weren't expecting or supporting a war with Ukraine even a week before it started.
It was a western lie that Putin wants to invade Ukraine up to the second it happened, and then it became obviously the only possible choice overnight.
The most important thing to understand about Russians is that they were trained for centuries to be passive cynical conformists. It mostly worked. There are some actual nationalists who want the war. But most Russians view them as madmen who are "sticking out" and will suffer for it eventually. It's as stupid to be openly unpatriotic as it is to be too patriotic. See girkin.
Most Russians just subconsciously detect the safest position and orient themselves accordingly. Not because of conscious fear, simply by default. If Navalny became Russian president - the next day 80% of Russians would be completely persuaded they were always against the war. Orthodox church doesn't have much influence, IMHO, it's just aligned like everything else.
Most Americans do exactly the same. Look at the reaction to 9/11 and the subsequent invasions of Afghanistan and Iraq.
The vast majority of Americans couldn't identify either of those countries on a map let alone understand their history and culture yet it was "safe" to go along with it lest you be called unpatriotic.
>Most Americans do exactly the same.
I don't think it's the same at all. Attitudes towards the Iraq war changed massively during the presidency of George W Bush [1]. They didn't suddenly flip when Obama came into office.
Also, looking at America today from the outside, what I see is a very polarised country with very entrenched opinions that I don't see changing much regardless of who wins the next election.
[1] https://www.pewresearch.org/2008/03/19/public-attitudes-towa...
Attitudes towards the Iraq war changed massively during the presidency of George W Bush [1].
Sure it changed once they saw the actual reality of the war. But the fact that a solid majority supported the war at the outset, despite Bush's lies at the time being roughly on par with Putin's lies about Ukraine today (in terms of being transparently BS) -- does tend to support the point the above commenter is making.
Now imagine 9/11 hadn't happened and USA invades Iraq after denying it for months. What would be the response of the opposition voters? :)
In USA it's about 50/50 on almost every issue. It's nothing like Russia. In USA a significant percentage of population openly protested Obama on the point that he isn't American. Try that with Putin :)
It sounds like what you are saying is that like Russia the US invades when it serves whatever happens to be the interest of the establishment clique but unlike Russia the US ignores ineffective protests.
I'm not sure Navalny is against the occupation on Crimea and Ukraine, there's nuance there, he has said he's against the Russian Military interventions, but he is still a Russian nationalist and has (to my knowledge) been against the conduct of the war and wants a diplomatic solution but it's not clear to me that he would have ever "given" Crimea back.
Well he's murdered now. He was trying to position himself as "reasonable" during "Crimea is ours" euphoria, I'm not sure but I'd expect him to return all the annexed territories if he got in power after the full scale invasion. Russia would need to do it anyway to get sanctions removed.
We'll never know, but I "feel" like that would have damaged him politically had he been in power in Russia and therefore doubt he would have. But again, we'll never know. And it's purely theoretical, even if he wasn't dead, there is no scenario that I can realistically think where Putin would have allowed Navalny to replace him, absent the FSB/oligarchs assassinating Putin. But even there, I suspect Navalny would still have been murdered and we'd still just get "Putin-lite"
Thats pretty accurate though.
It's not, and westerners who think they agree don't actually agree, they are just edgy. It's hard to even explain what it would mean to internalize this belief system.
Let me try. We're you ever on an amateur IT conference? Comicon? Some sports event? Would it ever occur to you to assume some government is secretly behind it? When the Jehova witnesses or scientologists knock on your door - which government is financing them to do it and why? After all people don't do things for free.
Comicon is not what people mean by NGOs being covert state department ops. Here is an explanation you’re not going to watch: https://x.com/NewFounding/status/1727493568325935109
Russians actually believe both Majdans were CIA. Putin actually believed Ukrainians won't resist the invasion because all the protests were staged by USA. It's inconceivable to them that a civil society is a thing.
NGOs in Russia ALL have to register as foreign agents. Including the ones who organize comicons etc.
This is the reason I told you you don't actually understand.
As for your video I don't have that much time for propaganda, care to summarize it?
So funny that you are downvoted, this is exactly right and perfectly clear to anyone who is remotely familiar with the area, or Russian society.
That's a 90 minute video. Even at double speed that's still 45 minutes. you'll have to make your point mire succinctly if you want to get your point across.
"That's not what people meant". No, people are pointing out holes in your reductionism.
It’s just the reductive pedantry that’s so popular on the internet. A CIA operative is the agent of a foreign government, therefore a foreign agent.
A Doctors Without Borders medic is an agent of a foreign organization, therefore a foreign agent.
Therefore CIA and DWB are essentially the same thing. Bonus points if you can find one case where a DWB volunteer also had ties to the CIA, which would totally expose the two orgs as being exactly the same in all ways at all times.
For some reason people just can’t resist reductionism.
Being a bit reductive there, eh?
:)
where do you live? I think any civilized country has many local ngos that help abused animals, or provide mental support for children or abused women, or support some medical initiatives, etc...
Official state churches are part of the state.
What about a holy war to bring democracy and freedom to ukraine. Would that make it better?
It's everyone's word for NGOs. Haven't we been attacking chinese 'ngos' as being 'foreign agents'? It isn't a secret that we've been using NGOs as intelligence fronts for a very long time. What do you think NGOs exist to do? Provide aid? Help foreign countries?
Don't have to go back that far - the current Patriarch of the Russian Orthodox Church is "ex-"KGB
Seems related: Russia is more frequently arresting religious leaders (all sorts), typically on terrorism charges
ref: https://www.uscirf.gov/religious-prisoners-conscience/forb-v...
ref: https://www.aljazeera.com/news/2023/4/2/ukraine-court-puts-m...
ref: https://www.themoscowtimes.com/2023/02/03/russia-jails-islam...
ref: https://www.nytimes.com/2021/10/24/world/europe/russia-churc...
ref: https://www.uscirf.gov/religious-prisoners-conscience/forb-v...
2000's sidebar: It killed me watching Russia overtly copy the US model of boogey-manning terrorism into an flexible excuse to expand State reach and power
In September 1999 a series of bombs tore apart four apartment buildings in three Russian cities, and the recently appointed (a month earlier) Prime Minister, a bright young former deputy mayor of St Petersburg named Vladimir Putin, whom no one had ever heard of and had many similarly positioned rivals, won a great deal of popularity for his handling of these "terrorist attacks" that killed 307 people, including re-invading Chechnya and starting the Second Chechen War. He then used that popularity to become essentially dictator for life.
These bombings were blamed on Chechens- who hotly denied it. It has long been suspected- but not really proven- that the FSB was behind it, as a true False Flag operation to gin up support for invading Chechnya, done under the orders of former KGB/FSB agent Vladimir Putin who just happened to be the one to benefit most from the attacks. You can see the wikipedia page at https://en.wikipedia.org/wiki/1999_Russian_apartment_bombing... to see more details on exactly what the evidence for this is, and the people who argue that there is just not enough evidence one way or another to assign responsibility.
So, no, Russia was not "overtly copy the US model" if anything they were innovating it first and the US was copying.
[https://en.m.wikipedia.org/wiki/USS_Maine_(1889)] Spanish American war?
[https://en.m.wikipedia.org/wiki/Gulf_of_Tonkin_incident ] Gulf of Tonkin?
The tail wagging the dog is as old as, well, government. Probably older. Nothing new under the sun, etc. etc.
er, copy? The first and second Chechen wars happened in the 1990s.
EY believed the documents shown to them. Sloppy for sure, and EY got their amount of flak for it.
People litteraly went to the banks in Asia during the extraordinary audit, something that is not usually done during "normal" audits.
And yes, I also hate when I misplace my billions. Especially since I have yet to relocate them...
There are strict rules and guidelines around verifying an asset. The auditor isn't supposed to "believe the documents" - they need to form an independent opinion.^1
If the auditor is unable to obtain sufficient appropriate audit evidence to verify the asset, they can issue a qualified opinion due to a scope limitation.
^1 https://www.accaglobal.com/gb/en/member/discover/cpd-article...
Good nitpick. Thing is, the proof EY got from Wirecard was good enough to meet these thresholds, at least I never read or heard anything else. All that evidence was fabricated, of course.
What EY did was ignoring all the warning signs they had: money laundering, making up business, fraud and all that.
EY also wanted the proof the standards it seemingly met, that was the failure. But then those audits are not really meant to find organized fraud at a company to begin with.
It objectively wasn't. I've never heard of a case where the auditor doesn't independently verify the bank account balance with the bank itself. More reliable evidence reduces the need for additional corroborating evidence. In general the evidence obtained from the company itself wouldn't be considered reliable by itself.
https://www.ft.com/content/db9fa3d7-11da-476e-beea-d5ed0ad13...
This wasn't some hard to uncover marvel of accounting fraud using complex financial engineering.
Always happy to be corrwcted and learn something new, unfortunately the FT link is behind a paywall...
If memory serves well so, it is quite a while I read Dan McCrum's book, Wirecard produced documents from the Asian banks (fake ones, as we now know). Of course, and I couldn't agree more, they should have at least called the banks up. Especially since a German fin-tech start-up, with on-going bad press, claims to hold billions with some Asian banks from business activities directly related to said accussations circulating in the press. EY deserves all the flak it got.
That being said, again, if a company wants to defraud its auditors, they can for surprisingly long periods if they try hard enough.
I think, we basically agree.
From what I gather they not only called the bank, but actually went to a branch in the Philippines. They spoke to a clerk, took a picture of a screen showing a balance. But the branch office was fake.
https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e...
I think you're joking, but I'm not sure. I work in trading, and I've been on the receiving end of that phone call. As I recall, it was around 9PM in the US, my work phone rang and could see from the caller ID that it was from our London office. There were no greetings, first words I hear were "We're missing over a billion dollars. You need to find it...NOW."
When I received that call, it was in the middle of the 2008 financial crisis. The daily PnL swings were wild, and it wasn't always clear on the cause. FX volatility was insane. We did all of our PNL reporting in USD, but held a lot of foreign assets.
There was no malfeasance; I'd just taken ownership of the system a week or two before, and a nightly job had silently failed. Perl job on Windows, extracting data from a 3rd party trading system that wasn't built w/ integrations in mind, feeding it into in-house systems. It was a very flimsy house of cards. A gentle breeze in the night would knock it over. Rewrote the integration in Python, hooked everything up into our monitored job scheduler. Had to do some janky UI automations in Python until we got the vendor to add a proper CLI-based reporting mechanisms. It was a "fun" ride, but I eventually got my evenings back. Did cause the end of a relationship, though, so there's that.
A lot less money involved, but I remember my boss at the time (we were a small mortgage broker in Eastern Europe) asking me to write a quick Python script that would automatically get the daily Libor number and save it into our DB.
Seeing as I was hearing about Libor all day, every day (almost all of our clients had their mortgages computed on that piece of info), I had expected it to be something “automatic” (like at least an XML thingie) and well documented. Instead I had to parse some html on a page somewhere (I remember some yellow background) and hope that the HTML structure around that Libor figure would remain unchanged.
This was all happening around 2007 - early 2008, suffice is to say that when all the Libor scandal happened a little later on I was not at all surprised.
I was joking, the max I ever "lost" was a couple 100k of inventory, the majority of it was recovered and the reminder, as far as I know, covered by insurance. Also a, surprisingly similar, fun story involving just slightly different interpetation and handling of messages between our and the service providers WMS, which screwed up things in ways I never thought possible. And almost went unnoticed, after all even with top notch metrics and my borderline paranoia the issue went on for almost three weeks before we caught it.
I can only imagine so the slight shock you had after that phone call so! I love those stories from the trenches so you hear on HN, thanks for sharing!
Would have been nice to have seen some of that billion you found, I'm sure.
No, they did ask. And got Bank statements. They even went to a subsidiary branch of the bank and confirmed that the money exits in Indonesia (or was it the Philippines?). The problem: This bank had no branch in Singapore (or wherever it was). He set up a fake branch with actors that showed EY computer statements - EY took pictures of the screens - with the balance.
You can't make this up. EY screwed up, but they could not have reasonably assumed that someone sets up a fake bank branch.
Yes I know they did ask.
As the responsible manager for IT (usually CTO - internal SOX was a different matter) I have been "asked" by EY (and KPMG) about IT setups and security several times for audits. And I could have told them whatever I like, the people were right out of university with no clue about the matter and in no position to ask the right questions except reading their checklist; I always had the impression they only knew half the words they were reading.
Did you remove Wirecard from your LinkedIn?
[Not the person you replied to.]
Did the person you replied to work for LinkedIn? What's the context for this question?
I was just curious and visited the LinkedIn profile that's linked to from the ctone.ws website (in KingOfCoders's profile) and was wondering why Wirecard was omitted.
Why on earth would you assume the OP was affiliated with Wirecard?
Are you thinking their post is indicating that they were part of the Wirecard audits? They're saying they've undergone similar audits.
No, since I did not work for Wirecard. But my resume is so bad, I wish I had Wirecard on it.
I think the role of an auditor is to make sure all the right questions have been asked and record who answered and what they answered. Asking them to be guarantors of truth is maybe putting a bit too much faith in a non-judicial investigation
KPMG asked me once: "Can you show it's actually encrypted?"
Do you have any programming skills? ... No? Then no. Then they started blabbing about what the data could be and it basically came down on them not understanding what random is and they then just checked it off and went on. Since then I do not believe any audit which come from those paper farms.
If you pay the Big 4 enough money, they will look the other way or not ask for supporting documentation. Just google accounting scandals and see just how many of these shops were audited by the Big 4.
Any tax authority worth their budget should require extra evidence from any Big-4 customer. By now it's clear they are less reliable than your average smalltown accountant.
Unfortunately, there is typically a big revolving door between them and any tax institution. Why toil for decades in underpaid public roles, when you can step into the gilded world of consultancy and double or treble your salary? It's like the yacht scene in The Wolf of Wall Street, except in real life most civil servants take the corrupting deal (and I can't even blame them).
Lol, if audits had to do with taxes and not defrauding investors, this would have made sense.
The audits done by the Big 5 in this context have nothing to do with taxes so.
Isn’t that just because most of the biggest companies are audited by the Big 4, and in order to be a big accounting scandal, you need to be a big company?
I feel like this is pointing out something like, “More criminals drive Ford trucks than any other truck” which is true, but just because more people drive that brand than any other?
Reminds me of https://xkcd.com/1138/
It really depends on the terms of the audit. Routine financial audits are not intended to be exhaustive forensic audits that assume every document might be forged as part of a massive fraud.
Most audits are just “does the documentation support the reporting”.
EY offices in Singapore knew that their revenues were not traceable (Wirecard invented clients based in Asia). They hired a law firm to investigate, but the head office in Europe suppressed the findings because they wanted the contract.
Did this come up during the EY trials? Because this is the forat time I ever heard that.
I really hate it when I leave my billions somewhere in the world and can't remember where.
There was a personal assistant who stole around GBP 4m from several of her bosses at Goldman Sachs. One of the bankers finally noticed when a 6-figure donation to Harvard bounced. One of other the victims later testified that his investment account felt "one or two million light".
https://www.independent.co.uk/news/uk/crime/secretary-who-ha...
Well, Russian orthodox church was always cheka all the way from the top?