EFRI´s letter to the FATF


As you read this blog post, the #Wirecard tsunami sweeps over Germany and destroys the reputation of the capital market and its institutions. The responsible authorities (mainly #BAFIN) and involved companies (especially EY Germany) are blaming each other and are trying to overcome the issue. The frightening truth is that Germany has a large cybercrime and money laundering issue. With the pending FATF audit, a change could be triggered, so we sent a letter to Financial Action Task Force (FATF) to tell them in detail about the problems found with Wirecard and Deutsche Bank/Postbank.

The now exposed #Wirecard fraud didn’t surprise interested people and us. The German Fintech and DAX superstar was involved in cybercrime and financial scams for many years. The #Wirecard Bank shows up on payment instructions of many scams. EFRI has communicated with BaFin throughout 2019 and finally filed a money laundering complaint about #Wirecard with BaFin and the Munich prosecutor at the beginning of 2020.

The use of European regulated and unregulated payment processors in the scam industry is overwhelming. But for sure some countries like Germany and its financial sector play a specific role.

According to our research, EFRI members sent more than 32% (11 Mio EURO) of the total €34,7 Mio stolen deposits to the scammers via shell companies with German bank accounts (please compare our Follow the money sheet for deposits of 822 scam victims).

These shell companies acted as illegal payment service processors with the only purpose to intake the money and send it off on the instructions of the scammers.

We represent a small portion of the total scam victims European-wide, so we conclude that millions if not billions of illicit money from unsuspecting consumers have been transferred via German banks accounts to scammers.

Banks in Germany – above all DB/Postbank and Wirecard Bank AG -apparently have a problem with AML-CFT procedures. They continue to fail to conduct proper KYC procedures for new customers. German financial institutions are significant contributors to cybercriminals’ massive daily fraud perpetrated on unsuspecting consumers.

The lousy performance of the German supervisory authority and the not functioning Financial Intelligence Unit (FIU) network in Germany resulted in Germany becoming the country to go for money laundering for cybercriminals. Germany developed into a paradise for scammers ripping off consumers and retail investors and for scammers to launder the stolen money.

This development happened at the expense of thousands of unsuspecting retail investors who relied on a functioning and well-supervised German financial market.

FATF is the most important international body for combating and preventing money laundering and terrorist financing. Germany has been leading the organization since July 1st, 2020.   An on-site audit in Germany was planned for September 2020 and was postponed to the end of 2021.

We summarized our findings of the involvement of Wirecard, Deutsche Bank/Postbank, and the details about the money flow of the 822 victims registered with EFRI in a letter to FATF. We want to alert them and to request them to stop Germany from being a Western European money-laundering hub.