"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.
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.
It was the Philippines. Wirecard hired a Philippine lawyer Tolentino (who was also a government minister) to make up a fake trust that held the fake money
“The NBI said Arellano, an employee at the BPI branch in Malate, Manila, had admitted to receiving P10 million for issuing bogus bank certification documents that Tolentino and his law office needed as the supposed local trustee of Wirecard.”
I guess it goes to show that if you are dealing with enough cash to bribe third world governments then all kinds of new fraud schemes become possible.
> if you are dealing with enough cash to bribe third world governments
We shouldn't discount the connections a GRU agent would have in 3rd world govs, they know who is corrupt enough (or able to be coerced) to do their bidding. Fake banks accounts is pretty old stuff in the spying world. It's not just money.
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.
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.
Yes, we ensure that the data is only available via TLS foo.bar with encryption algorithm baz, which is on the approved list. We have monitoring and logging that ensure that we receive an alert if the port the app is on is not encrypted, and if you'd like we can dump the traffic to show you that there is no clear text available.
Further, only users on the approved admin list can make a change or deploy to production, or login to the server as root. Moreover, we do a background check on employment for all users who have admin access, and all deployments and code changes require at least one other employee to approve them, and we log who they were, and what the change was.
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
That almost seems like they would need to be active in the relevant field they are auditing. I’m not sure if the auditor role pays enough to hire people from all of the various fields that have to be audited.
Audit is not a foolproof guarantee that no fraud exists, the same way that locking your door doesn't guarantee that no crime exists. It deters opportunists by making crime more difficult and onerous.
In this context, they're just making sure the answer isn't "no, it's not encrypted". Sure, you can lie, and that would fool them. But your answer will be cross-checked with other employees, maybe with other documentation if those exists.
And sure, you can forge all of those as well, as Marsalek did with his bank statements. But these sort of verification significantly raises the bar to how difficult it is to commit fraud: you now need to get several people into the conspiracy to forge those documents and audit trail. Your average employee isn't willing to lie for their company for no good reason and risk prosecution, and may very well whistle-blow on you.
Being an expert certainly makes you a better auditor, but it's not any more necessary than making police officers have law degrees.
Software development has a frustrating history of reappropriating words from other contexts. Your "code auditor" is probably more akin to an OSHA compliance officer/safety inspector. Again, experience helps, but you don't need to be the architect of the Pyramids to ensure everyone onsite is wearing a helmet.
They make a good-faith effort to ensure some checklist of conditions are met.
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.
> And yes, I also hate when I misplace my billions. Especially since I have yet to relocate them...
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 remember some internet arguments on Libor when I researched how it was determined and everyone disagreed with me because of how much was based on it.
It's just survey data, and no verification of whether a loan can happen at that rate? And you throw away the lowest rates, which should be the market-clearing rate all-the-things-being-equal if lenders are fungible? And if lenders aren't fungible, then isn't it all apples and oranges?
High finance even fairly recently (80s) was based on handshakes and trust. The value of contracts tied to LIBOR grew by an order of magnitude or two while the definition of LIBOR wasn’t adjusted.
Why wasn’t it fixed? Because replacing it would require an enormous amount of coordination and there was no clear evidence that it was broken. When that changed it finally got replaced by SOFR.
LIBOR was developed in '86. The LIBOR scandal broke in 2012, with evidence of bad conduct going back to '08 or so. The LIBOR to SOFR transition was officially kicked off around 2016. Due to the complexity, the transition took 5 years.
The LIBOR rate-setting mechanism was a reasonable design for the world of 1986 [1], when finance was a smaller club and trust among bankers was higher. Also, it wasn't clear back then that the volume of contracts referencing LIBOR would grow to become many trillions of dollars just a short couple decades later.
When problems finally became very clear, we replaced it.
[1] One criticism often levied at LIBOR is why it sufficed to take a windsorized bank poll instead of looking at something more reliable, such as market transactions. But that's ahistoric: in 1986, banks didn't always do unsecured 3m lending on a daily basis. And later on, banks mostly stopped doing unsecured lending to one another entirely. So critics who suggest that LIBOR should've looked at market transactions entirely miss that finance, actually practiced, is a constantly moving target and it's hard to predict the future when designing benchmarks. SOFR, LIBOR's replacement, looks at secured interbank lending — a practice that was rare when LIBOR was created.
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!
> EY believed the documents shown to them. Sloppy for sure, and EY got their amount of flak for it.
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.
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.
> Thing is, the proof EY got from Wirecard was good enough to meet these thresholds
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.
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.
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.
I did not know one could pull that kind of data from my posts here, I am equally impressed and terrified...
Usually, I comment on mobile. And if I realized one thing, my orthography takes a very serious hit when typing on a phone, compared to a proper keyboard or handwriting.
The entire HN story and comment history can be retrieved via the API, so you should generally assume that anyone who might be interested in somehow indexing/querying/analyzing what you post has already done so.
I wonder sometimes how much of it is in the training sets for various LLMs by now.
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.
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".
My friend once stated that "Financial security is when you don't know which day of the week your paycheck gets direct deposited".
Imagine being so unfathomably wealthy you don't even know how much cash you should have control over from one day to the next. Actually don't, it's bad for your brain.
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.
It goes back even further, actually, all the way to the Byzantines. Eastern Orthodoxy has this concept called the "symphony of powers": https://orthochristian.com/93823.html, which in practice means a church strictly subservient to the government under which it operates. Russia is quite possibly the pinnacle of that, seeing how the Russian Orthodox Church managed to apply it even to the Bolsheviks eventually.
This has led to some interesting quirks historically. For example, in Japan, the local Orthodox Church is the offshoot of the Russian one, and at the time of the Russo-Japanese war in 1905, it had a Russian archbishop heading it - https://en.wikipedia.org/wiki/Nicholas_of_Japan. Upon hearing of the declaration of war, the Japanese clerics under him asked him what they are supposed to do. He told them to pray for the Emperor of Japan and the victory of his hosts, since, as Orthodox, it was their duty to pray for their country's ruler and army during a war. He himself, being a Russian subject, could not do so, but also could not openly pray for the victory of Russia in the war while remaining in his position as the head of the Church of Japan; and he believed that it would be inappropriate for him to abscond from that duty and to flee to Russia. So he gave his bishops the blessing to pray according to the canon, and excused himself from public services for the duration of the war.
> which in practice means a church strictly subservient to the government under which it operates.
partly so - in this world, among the worldly ways, the temporal ruler has authority. However, the bargain is.. at birth, at death, in times of great peril, or any day when there are hungry, poor, afflicted, ill or outcast citizens (every day in other words) the temporal ruler has agreed to acknowledge One God (not the person ruling) and implement the words of the Christian canon .. to attend to those who are needy, sanctify marriage, watch over the helpless and bring food and medicine to those that need it.
In the modern times of post-industrial plenty, these crucial agreements are often overlooked. Yet this is how civilization grew from the barbarian times in the Western world.
They were equally overlooked back at the times that doctrine was promulgated. Byzantine emperors did a lot of nasty stuff, much of it with the approval of sycophant patriarchs.
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.
> If Navalny became Russian president - the next day 80% of Russians would be completely persuaded they were always against the war.
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.
> I'm not sure but I'd expect him to return all the annexed territories if he got in power
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"
He was a Russian nationalist. And yes, he did say that Crimea "is not a sandwich to just give it back", back in 2014. But things have changed a lot since then.
I have lots of respect to the guy, but realistically the only scenario where he would become Russian president would be if the vote for the Russian presidency was conducted in the West. He would win a landslide victory. In Russia though, if you go outside Moscow and St.Petersburg, it's not that people are against him — they simply never heard of him.
In the USSR in the 80s there was a lot of talk of one Angela Davis. She was presented as "the only opposition leader" or something. There's no doubt that if the election for POTUS was conducted in the USSR, she'd win over Reagan by a huge margin. In the USA though not many people knew who she was. So Navalny is the Angela Davis in reverse — the media across the border makes him look like punching in the weight category he does not really belong to.
Regarding Russian political landscape, you can look in any corner, from Gorbachev to Solzhenytsin and anything in between. There are not many points that these people could all agree on. But not a single Russian politician was comfortable with the thought of Ukraine joining NATO. And this includes Navalny too.
Putin will die one way or another and Russia will have to exit the war and try to return to normal economy. Nawalny or another similar leader is their best shot at that. They created nadiezdin for a reason, they kept nawalny for a reason, they will create somebody new like that eventually. It's internal struggle in Kremlin that will determine which of them will succeed Putin and when, but Ukrainian war has a huge influence on that.
Every time Russia lost a war they had a temporary liberalization. Usually orchestrated by the government because there's no civil society in Russia.
As for what Russians thought about Nawalny - doesn't matter, never did. Nobody knew who Putin was, yet fsb made him a president no sweat.
And don't get me started about NATO. Russians will almost all immediately flip from "Ukraine in NATO is an existential threat" to "nobody cares" the moment the narration in tv switches.
The russian trick of presenting their dictators as the reasonable forces keeping the even worse tendencies of Russian people contained is obvious bullshit. In reality Russians will just go along with almost anything.
> Most Russians just subconsciously detect the safest position and orient themselves accordingly. Not because of conscious fear, simply by default.
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.
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.
Attitudes towards the Iraq war changed massively during the presidency of George W Bush [1].
Sure it changed once they saw the (wholly predictable) actual reality of the war. But the fact that a solid majority supported the debacle 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.
It didn't take years of little progress for the US public to become pessimistic about the Iraq War. The war had less than 50% approval only a year after starting. Also, contrary to what is commonly passed around as fact today, it was not abundantly clear that the Iraqi chemical weapons program no longer existed, as the US was never actually supplied with evidence that the Iraqi Biological Weapons program was done away with after the Gulf War, which is why it wasn't just the possible existence of WMDs that was given as justification, but the non-cooperation with inspectors also. In the early 2000s, soldiers were given multiple rounds of anthrax vaccine shots due to this lack of clarity. This is not to say that this justification a good reason, but it wasn't a clear lie at the time either, despite being repeated commonly as such on the internet these days.
Not at all. A majority of Americans changed their minds in opposition to the sitting president who had started the war. This directly contradicts the point the above commenter was making.
Speaking as someone who grew up in Russia and lived for 12 years in US, your average American might be just as gullible as your average Russian, but they are certainly a lot less conformist when it comes to government policies.
This is only one political party. When the government changes hands, republicans will openly change their entire worldview about, for example, the economy, despite it being impossible anything actually changed, while democrats largely don't.
https://fivethirtyeight.com/features/republicans-pessimistic... I mean christ, look at that graph. Republican opinion changed overnight. There are even more examples for this exact effect. Seems when republican voters say "economy", they might mean something else.
People constantly paint America with a single brush. What you see on CNN, MSNBC, FOX etc isn't America. We get shit on constantly for doing that to other countries so it's always annoying when others do exactly that to us.
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.
> 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.
This seems similar to how the people in Germany reacted after the Nazis lost WW2.
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.
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.
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.
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?
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...
> Russian Orthodox church today is openly run by russian state officials, military, police, fsb members, etc.
Official state churches are part of the state.
> They are also openly supporting invasion of Ukraine as a kind of "holy war".
What about a holy war to bring democracy and freedom to ukraine. Would that make it better?
> The russian word for "non-government organization" is "foreign agent".
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?
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.
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).
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”.
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?
A Ford truck is not able to consciously collude with the criminal.
Partners in the small set of auditors/accountants that can deal with big companies will kindly send the command to overlook certain important documents if they are paid enough.
Sure, but arguing that requires separate evidence other than "all the biggest frauds were committed by companies audited by the big 4". That observation adds no evidence.
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.
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.
Why did they burn it to the ground them? Why does Petlinsky, who tells the whole story, talks to Spiegel in Dubai? Why the prospective spy Marsalek is driven around the country and gets to know all the namedrops?
If something, it seems that Petlinsky is a German agent in Russia. I'm not even sure if the article denies it, too much of a wall of text.
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.
"British prosecutors say that from 2020 to 2023, Marsalek ran a ring of five U.K. based Bulgarians who are alleged to have spied for Russia, directing them to gather information on people with the aim of helping the Kremlin abduct them. Officials say Marsalek was used by Russian intelligence services as a middleman to put distance between them and the spy network as it targeted individuals across Europe."
...
"While running Wirecard, Marsalek helped the GRU, Russia’s military intelligence agency, and the SVR, its main overseas spying organization, pay intelligence officers and informants and funnel money into conflict zones in the Middle East and Africa, according to the officials.
At the same time, these Western officials suspect Marsalek was gathering information on other customers of Munich-based Wirecard, most notably Germany’s main BND intelligence agency and the Federal Criminal Office, the country’s equivalent of the FBI, and handing it over to Moscow."
...
"Germany’s foreign intelligence service, the BND, as well as the country’s equivalent of the FBI, the BKA, told parliament during a public inquiry that ran from September 2020 to June 2021 that they had used Wirecard credit cards and bank accounts for their agents abroad as well as for paying informants at home and abroad. Senior German intelligence officials confirmed this to The Wall Street Journal. "
...
"Marsalek ordered Wirecard Bank employees to breach data-protection and other rules to compile data about clients, according to testimony by former executives to German prosecutors. Several intelligence officials said it could have provided information about intelligence agents’ work. Wirecard’s former chief product officer, Susane Steidl, said Marsalek had overruled objections to collecting customer data and told her in 2019 he needed the data for the BND—something the agency categorically denies."
... 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.
I'd venture a guess at least partially explaining it - Russia has been importing/cargo-culting German style of education, science, government, law, military, etc. for several centuries. Before 1917 like a half of the top of the Russian government and society was German. Lenin for example was half-German. The modern Russian language has developed during the last about 300 years, and the most closest/easiest non-Slavic European language for Russians is German. That all didn't make Russians into Germans, far for it, yet it lets Russians understand and mimicry the German style when needed (at least much easily than say French, English or Italian. Also kind of not surprising that the USSR was helping the revolution in Germany, and later the first 2 mega-totalitarian regimes happened to be Germany and USSR, and they were allies the first 2 years of WWII fighting together against democratic countries of Europe).
And of course USSR had Eastern Germany for 40+ years - enough to develop deep networks and poison the minds.
> most closest/easiest non-Slavic European language for Russians is German.
Speaking as a Russian, I find this assertion very questionable. Lithuanian and Latvian are far closer to East Slavic languages, for one thing. But even among West European languages, Spanish is easier IMO.
In general, Russia borrowed a lot of science and engineering stuff from Germany, and definitely the military, but when it comes to governance - no, not really.
Russia runs German law system, it is just the results are so different that one has hard time to believe that it is the same system. The same with governance - German modeled, just again with very different results.
The Spanish is good contender, agree, though, German I think closer and historically provided more influence - there were no noticeable Spanish speaking, Spanish literature nor philosophy in Russia, while German speakers, German literature and philosophy were massively present.
The political system in Russia is closer to France if anything. But that's all on paper - the reality for both the justice system and the political one is obviously quite different and not in any sense German.
If we're talking about cultural influence, I'd also say that France had a lot more influence in that regard, especially literature-wise. French was a de facto standard "educated class" language for close to two centuries, with quite a few of the nobility learning it as their first language.
But, again, culturally Russia is by and large its own thing. The way I'd describe it is a European-style facade covering some unholy merger of Byzantium (the way it was understood in Muscovy, not necessarily how it actually was) and the Golden Horde. The latter part goes all the way back to the Grand Duchy of Moscow; the former, mostly to Peter the Great.
They are not in the conflict flow anymore. It's been trained out of their system for quite some time. It leads to some naive assumptions about how the world works.
Even the events around the current conflict seem not to have shaken the society, from what I witness. The Green parties wishes on the topic of heat pumps or people coming to their country whose skin color is not white have more revolutionary potential than Russians right around the corner or people blowing up their gas pipelines.
They are too busy with themselves and stuff like that is just embarrassing. It only serves as filling material for your everyday complaining orgy every single morning at work. Stuff a healthy German citizen leaves behind them at Feierabend.
> The Green parties wishes on the topic of heat pumps
... which are the most efficient way to wean us off of Russian gas. The Greens have pushed for years now to get rid of fossil fuel dependencies, turns out they did have a point all those decades.
They never "pushed towards natural gas" and nuclear was killed by the Merkel Government while also stopping all renewable expansion for 16 years.
Nuclear has been replaced many years ago by renewables in Germany. Stop spreading Michael Shillenbergers propaganda.
Germany doesn't need nuclear the same way they don't need Russian gas anymore. You should all cheer for the Greens and for their foresight towards the end of the 90s when they pushed for renewables. Germany would still be struggling without them and Putin's gas if it hadn't been for their push for renewables.
I don't know Michael Shillenbergers. I'm not German and don't know a lot about German politics but a quick research showed me that you said a lot of BS.
To summarize:
> The anti-nuclear protests were also a driving force of the green movement in Germany, from which the party The Greens evolved. When they first came to power in the Schröder administration of 1998 they achieved their major political goal for which they had fought for 20 years: abandoning nuclear energy in Germany. -- https://en.wikipedia.org/wiki/Anti-nuclear_movement_in_Germa...
The Greens were always against nuclear. It's hypocritical to blame Merkel government as the phase out was planned decades before, Merkel initially wanted to delay it but was faced with protest and backlash from Greens.
Renewables drastically expanded in Germany but if you look at the evolution of German energy matrix you will see that renewables mostly coupled with increased energy demand while nuclear phase out came at a cost of increased usage and reliance on natural gas which naturally comes from Russia.
> After the 2022 Russian invasion of Ukraine, Schröder was criticized for his policies towards Vladimir Putin's government, his work for Russian state-owned companies, and his lobbying on behalf of Russia. On 1 March 2022, Schröder's entire staff including long-time office manager Albrecht Funk resigned due to Schröder's alliances with Russia and Putin directly. On 8 March 2022 the Public Prosecutor General initiated proceedings related to accusations against Schröder of complicity in crimes against humanity due to his role in Russian state-owned corporations. The CDU/CSU group demanded that Schröder be included in the European Union sanctions against individuals with ties to the Russian government. -- https://en.wikipedia.org/wiki/Gerhard_Schr%C3%B6der
You don't have to. It's a feature of the internet. BS spreads and everybody tries to make it look like they came up with it by themselves.
> The Greens were always against nuclear. It's hypocritical to blame Merkel government as the phase out was planned decades before, Merkel initially wanted to delay it but was faced with protest and backlash from Greens.
Seems you didn't read that much. Yes, the phase out was decided during the Schröder Government (where the Greens were also the minor party btw) but Merkel DID delay it. Then Fukushima happened, and the delay was history, with the same CDU politicians pushing for the end of nuclear. Merkel was in power for 16! years. She didn't stop it before Fukushima (only delayed it for a few years) and she didn't stop it years after Fukushima.
The simple and plain reason for that is that nobody besides a fascist fringe party and their followers want it back. It's done and gone. It's one of the few things in this country where people are OK with it.
Blaming "dem Greens" is ridiculous and yes, it shows that you are not German. You just have no idea. You ate up what Shillenberger fed you and the whole of the internet and just repeat it without bothering.
> Renewables drastically expanded in Germany but if you look at the evolution of German energy matrix you will see that renewables mostly coupled with increased energy demand while nuclear phase out came at a cost of increased usage and reliance on natural gas which naturally comes from Russia.
It's 2024, and you keep on repeating statements based upon fake news. Or as you say: "BS". We don't give a damn about Putins gas anymore. Neither in Germany nor in the rest of Europe. Stop spreading fake news.
BSW is now larger than Die Linke and one of their major policy proposals is about reconciling with Russia to get cheap gas. I think people very much worry about the cost of living.
> I suppose you're referring to AfD, which is not fringe, its the second largest party in opinion polls.
Just like the old news around the shutdown of the last nuclear reactor: those are pools. They catch the current hype or news cycle. They do not represent what people will actually vote for. AfD and FDP learned that lesson already. When will you? I mean, I've just shown you that CDU had 16 years to show that they are "pro-nuclear" with an actual physicist as their leader. IT DIDN'T HAPPEN. Because nobody seriously wants it. Neither FDP nor CDU. It was good for the news cycle at that time.
> BSW is now larger than Die Linke and one of their major policy proposals is about reconciling with Russia to get cheap gas. I think people very much worry about the cost of living.
Luckily, the AfD with a beard is just as irrelevant as the AfD itself, and this country is not being ruled from the rural areas of the former DDR. So yeah, we don't give a damn and will keep on doing so even if Sarah starts carrying buckets of gas over the border with their tankie followers to sell them to the conspiracy loving Ossis...Don't take me wrong. I love that that party exist. It'll spread the dumbest part of the German population in half making them less relevant which is good for the health of this country.
It had it replaced years ago with clean renewables you don't have to greenwash first in the same EU committees because your own taxpayer money can't come up with the subsidies required to keep it up, as Nuclear-France did.
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.
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?
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
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.
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.
I recall it was hinted at in the last episode only. the langue in the documentary seemed more like "alleged" ... it is very different from what is published in this report. shopping for a mercenary army in Libya = Not just a different ball-game, but an entirely different sport.
> He was long suspected of being a Soviet asset. Recently uncovered documents indicate that are grounds to believe he was responsible for helping the Soviets kidnap at least four people and illegally render them to Moscow for torture and interrogation.
While I am not surprised that a socialist persecuted under the Nazis would join Soviet efforts, this is some useful backstory in understanding why Marsalek the younger apparently had no reserves in collaborating with the KGB.
> 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].
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.
My bad. My comment was wrong indeed. I confused Solaris Bank with norisbank. Norisbank is Deutsche Bank, Solaris Bank is NOT. You were right of course.
Reading this reporting (Christo Grozev == quality always) reminds me of the experience reading of The Sword and the Shield by Christopher, MI5 historian (https://en.wikipedia.org/wiki/Mitrokhin_Archive) and just shaking my head at the complex web of money, ideas, and corruption spun and counterspun by various spy agencies. The Archive blew up stuff dating back to tsarist Russia, and exposed some brilliant operation, and tons more pedestrian money-grabbing. These days with OSINT the exposure of it no longer relies on someone sneaking out paper in huge milk jugs and suitcases like Mitrokhin did.
And as a russian who came to states as a refugee it also boils my blood to see how much my former homeland is stirring the pots and slinging sh*t around the world and how many people can be bought. It is all going to end in a huge explosion 1917 style and a disaster for
so many.
>By this point, Wirecard’s client list included Germany’s Federal Criminal Police Office, giving Marsalek — and the Russian intelligence services — access to sensitive data about German law enforcement’s slate of confidential informants.
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.
- HSBC was fined about
$2.5b all in all by US govt in 2010’s (one of largest ever) for laundering $900m for cartels over multiple years. The Sinaloa branch (not NYC, Zurich, Greenwich, London… but Sinaloa) was their highest performing branch for a long stretch
- Why exactly would a German unicorn payment processors’ COO be a longterm agent… GRU’s infiltration of German finance and energy industry for laundering and energy markets access is an open secret.
I think that the separation of the power to issue a currency from the state is profoundly dangerous, undermines the source of legitimacy of our society, and likely to destroy any possibility of a kind and fulfilling world for billions of people.
The current form of money that we use relies on the structure and status of the states that issue it, and the relationships that they have with one another. This is not positive in every way, for example the military dominance of the United States underpins the value of the dollar internationally. However, some measure of democratic accountability additional to brute force and pure market economics has allowed some diversion of wealth to create some measure of social justice.
I think there is no sign at all that crypto will provide this and instead if it was allowed to run wild the world would be ruled by people like Elon Musk with no restraint.
Fwiw, this is one of the few very valid risk areas that crypto indicates as a logical outcome if it works fully. The other is debt-deflation spirals.
A lot of crypto people don’t care about this, or see “democratic accountability” as an excuse for (in it’s worst version) Venezuela, or in its most likely version a decade plus of 0.0001% savings rates for the common man b/c our democratic system decided it’d have to work that way for a bit.
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.
Also compared to the US, Germany has given about 60 billion total aid (including the EU share + refugee cost) if I calculate it correctly, while the US has given 75 billion. So it gives much more per GDP.
There have been claims that in Putin's Dresden days, he happened to be assigned as the personal shadow of Scholz when young Olaf visited eastern Germany as a representative of the SPD youth organization. That would imply that Putin had been personally working on a file on him more than thirty years before Scholz became chancellor. This would certainly add some weight to any speculations about Putin having some form of leverage over Scholz. Being compromised does not eventually wear off over time, it compounds with every successful use.
I don't know if that assignment has been confirmed by any other source, but we do know that the visits have happened. They are even documented in radio archives. According to present day public broadcasting journalists, those actually happen to be the oldest known public recordings of Scholz.
> 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.
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.
That's true. Honestly, when I was thinking about the topic, I didn't consider cam sites, as that's not something I'm too familiar with myself... I assumed most users (or useds, as Stallman would say), were just browsing the billions of free material.
Is there a word that describes a very loosely organized but extremely powerful entity, that is kind of a nation state but also kind of a mafia and also kind of a business? Can it just be summarized as Putin's regime? But then it will function without him, maybe even more effectively. And its only ideology is the hate toward Western values (and love of the Western toys). What you call it?
I can’t wait to see what happens in Russia post-Putin. I mean, the guy is 71 years old. Maybe he will hang on for another 10-15 years. I can’t wait to see what happens then. As far as I can tell none of his biological offspring is being pushed as next leader.
I am sorry to be pessimistic, but once Putin is gone, someone else is going to take his place. There won't be much difference between Putin and the other guy, and that (small) difference may be for the better or it may be for the worse.
Putin is not in that place because he's somehow an extremely talented (or extremely lucky) person. Putin is there because that's what most of the Russian elite wants. Once he's gone, the Russian elite will put there somebody else who will fit them the most. It would not be reasonable to expect any drastic difference given the unchanging circumstances.
The thought that Putin is holding a whole country hostage to his freakish ideas is a very depressing one, but when you think of it it's actually an optimistic one because it implies that a positive change could be coming. But in my view, the reality is even more depressing. And in my view, the reality is that he has both the elites' support and the popular support.
A good proxy for the Russian situation would be China. They have changed the guy a couple of times in the last 30 years but the policy stayed mostly the same. The only things that can bring a change are either a coup (not likely in Russia) or a black horse like Gorbachev.
I agree. From the Systems Thinking, the best case scenario is that a new leader will start changing the rules of the game (internal incentives, punishments and constraints). Only then, and slowly, over decades things may start improving. It is just hard to imagine this outside of couple urban centers.
Right now majority of Russians still think they are a temporarily embarrassed great empire. And the goal is to return to the past glory. And the way to do it is by force, because only might is right.
How much does he matter you think? After reading the article, did you get the impression that all the colorful characters will suddenly change their ways after Putin dies? It seems the whole thing is very very loosely organized. More Camorra than Cosa Nostra. They kinda off like reverse James Bonds, but not exactly.
Well, a power struggle would be quite the thing to watch. At least for me. Kinda like what happened when Stalin died. (My personal forecast excludes return to democracy; it includes something similar to what happened after Stalin died).
Yes, I think the chance to soft-land USSR into a democracy was missed by the West in the 90s. I don't see how the brainwashed population and their globe trotting elite will change their views now. It did not have to be this way.
I thought the same way back in 90s. I also thought that a western-aligned Russia would have helped counter act some of China's ambitions. (I was quite puzzled by my college economics professor when he kept saying that increasing trade with China will make China more like the West)
Instead of that, the West more or less nudged Russia in China's arms....It did not have to be this way....
The money was not stolen; it never existed in the first place.
The fraud at Wirecard started before Marsalek seems to have been recruited as a Russian asset; the GRU probably didn’t even know it was happening until fairly late in the game. As frauds tend to do, it snowballed, until you’re setting up a Potemkin bank branch in the Philippines to get your auditor off your back about the couple billion Euros in cash you claim to have.
Still, I can think of a few reasons why an intelligence service might want to be connected to the wealthy COO of a company that processes payments for porn websites and offshore casinos…
There is no single 'Russia' and certainly not one entity _got_ the whole 1.9 billion. It looks like a fairly loosely coupled ecosystem of shady actors. They are privateers in a war. Not unlike Francis Drake. The war that everyone in Russia knows they're in.
No entity “got the whole 1.9 billion” because it was fictitious. The nature of the Wirecard fraud was (at least mostly) not that real profits were being siphoned off to nefarious entities, it’s that they were faking the profits.
"British prosecutors say that from 2020 to 2023, Marsalek ran a ring of five U.K. based Bulgarians who are alleged to have spied for Russia, directing them to gather information on people with the aim of helping the Kremlin abduct them. Officials say Marsalek was used by Russian intelligence services as a middleman to put distance between them and the spy network as it targeted individuals across Europe."
...
"While running Wirecard, Marsalek helped the GRU, Russia’s military intelligence agency, and the SVR, its main overseas spying organization, pay intelligence officers and informants and funnel money into conflict zones in the Middle East and Africa, according to the officials.
At the same time, these Western officials suspect Marsalek was gathering information on other customers of Munich-based Wirecard, most notably Germany’s main BND intelligence agency and the Federal Criminal Office, the country’s equivalent of the FBI, and handing it over to Moscow."
...
"Germany’s foreign intelligence service, the BND, as well as the country’s equivalent of the FBI, the BKA, told parliament during a public inquiry that ran from September 2020 to June 2021 that they had used Wirecard credit cards and bank accounts for their agents abroad as well as for paying informants at home and abroad. Senior German intelligence officials confirmed this to The Wall Street Journal. "
...
"Marsalek ordered Wirecard Bank employees to breach data-protection and other rules to compile data about clients, according to testimony by former executives to German prosecutors. Several intelligence officials said it could have provided information about intelligence agents’ work. Wirecard’s former chief product officer, Susane Steidl, said Marsalek had overruled objections to collecting customer data and told her in 2019 he needed the data for the BND—something the agency categorically denies."
That does sound high profile. Why did they tour him through Russia though? Talk about unwanted attention. And why ruin this lucrative business via stupid fraud?
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.
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?
There is a whole industry of people helping russians evade sanctions. And guess what, each and every scheme includes Freedom Finance. There are innocent russians among Freedom's clientele, no doubt, but the number of sanction evaders is too damn high.
Note that no other bank in Kazakhstan opens accounts for russians remotely without any proof of residence, proof of funds etc. It is only Freedom Finance doing this.
Why they are still being allowed to operate and have not been shutdown is a mystery to me.
I guess this needs a coordinated effort of complaints and letters to SEC, FED, congresspeople.
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.
I hate to break it for you but whatever you possessed whilst in Russia and you didn't take with you is gone. Your assets are gone; not yours anymore. You chose a new life here, in the EU, and... as you seem like a reasonable Russian, I'd like to welcome you to the EU and I want you to use your qualities contributing to (a free) society here.
The good news is, you're now living in a free society. You're paying taxes, you're probably following the law, too. You'll be fine here. Also, the Ruble will fall, it is just a question of when. Plus, you won't have to participate in a war economy making the useless war crap, or being cannon fodder. You made a brave, life changing decision, and part of that is saying farewell to your past.
Also, I don't know if it is possible for Russian people to use cryptocurrency but what I'd consider is go to China and buy some cryptocurrency there, then exfiltrate that to EU. Or something like that, I don't know. You'd be taxed either way (or have it not declared ...). The problem with stuff like this is, it can be used for good and bad. As such, you're collateral damage.
What do you think the money is used for abroad? Helping fight against climate change or feeding the hungry in Africa? No, Putin's regime needs that money outside of Russia to fund useful idiots who further his cause in the US and Europe.
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.
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:
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).
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.
> 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.
Shame, that is. Ever found yourself in front of the mirror thinking, "trim a little here, a little there -- whoops, thaaat's too much"? Ruined that for all of us, the small man.
If German intel serves personal data to a known fugitive from justice working with the GRU, then EU regulation is a lost cause. If anything, I want them to know as little as possible.
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".
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.
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.
I'm not going to get into the politics of that, but I do wish that news orgs would report the necessary context for understanding what "so-and-so claims" really means and letting people have all the information they need so they can judge how many grains of salt are appropriate. A little bit of he-said, she-said is necessary in breaking news, but there should be a lot of caveats that go along with reporting like that.
You have a country full of starving people, an active war, and trucks full of food guarded by soldiers of the opposing force. You also have the UN, a somewhat independent organization that's supposed to help resolve the conflict, and they're saying Israel is intentionally restricting Gaza's food supply.
Understanding this context, seeing all the threads, and there's really not much to untangle. If anything, this was entirely predictable. Nobody should be surprised that starvation was enough to provoke a violent conflict between Palestinians and the IDF.
I believe the news media is here to provide clarity, not add to confusion. The problem is that when things are a tangled mess, the media has a lot more to report on. Truth is cut and dry, but when there's a mystery you can just keep going on and on and on... I still remember all the news about OJ Simpson, so much to report and so few facts!
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.
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.
South america took fugitive nazis. The US didn't really denacify Western Germany and let a lot of the old cadre become leading actors in the post war politics and military of W-Germany. The list could go on and on.
> This type of stuff also might explain one of the reasons why German governments and big conglomerates seemingly have a mental block when dealing with Putin's Russia.
The guy is Austrian.
> The Nord Stream might be the most "famous" one. How can a society so conservative and risk averse to the point of ridiculousness allow their whole country to be almost exclusively dependent of Russia? It doesn't make any sense.
Nord Stream brought in 55% of natural gas managed in Germany. 50% of natural gas managed in Germany was for export. So there's no "almost exclusive" dependency, use of russian gas wasn't a German peculiarity, and Germany could have thrown the rest of Europe under the bus to quickly get rid of any association with russian gas at a moment's notice (by restricting exports to compensate for the loss.) For the record, Germany didn't do that.
Germany took cheap natural gas, Europe took cheap natural gas, and when the source for cheap natural gas turned out to be a problem, gears were shifted to get away from that. At a cost, certainly, but probably still cheaper than relying only on more expensive gas sources for 50 years. With the added benefit of calming down the cold war (and the attempt to repeat that performance later-on, which in hindsight was unsuccessful)
Maybe that's a fine rationale for Nordstream 1, but it's a terrible rationale for Nordstream 2. There were repeated votes strongly in favor (like, 8-to-1 ratio) of halting the project in European Parliament not to mention strong and vocal opposition from the US, Ukraine, Poland and the Baltics.
Nordstream 2 hasn't transported a single m^3 of natural gas for sale (there was probably some minor net flow from initial pressurization), as promised in case of russia ending the peace.
That thing was a money sink: About 5bn€ of Gazprom money, about 1bn€ each for 5 energy traders from Germany (2x), France, Austria and Great Britain.
> There were repeated votes strongly in favor (like, 8-to-1 ratio) of halting the project in European Parliament
And the natural gas they used came from a random non-russian pipeline. Nevermind that it was ~half russian in origin. Hypocrites.
> strong and vocal opposition from the US, Ukraine, Poland and the Baltics
- US: Hey, buy our LNG. (and now: no, not like that!)
- Ukraine, Poland: Hey, don't bypass our pipelines, we want the money!
- Also Poland: "Germany is bad", practically all the time, practically on every subject. At some point you tune out the noise from Warsaw.
> Nordstream 2 hasn't transported a single m^3 of natural gas for sale (there was probably some minor net flow from initial pressurization), as promised in case of russia ending the peace.
Yes, this was the agreement that the US made in return for dropping US sanctions on the pipeline project. Which was made only after it became obvious that Germany was insistent on completing the project against everyone else's wishes because "they knew better" and the talk about it being threat to the national security of Eastern Europe was irrational (/s).
>And the natural gas they used came from a random non-russian pipeline. Nevermind that it was ~half russian in origin. Hypocrites.
> - Ukraine, Poland: Hey, don't bypass our pipelines, we want the money!
You understand that there is a legitimate difference? Without Nordstream, Russia can't turn off the gas to Ukraine and Poland (or damage the pipelines) without turning it off for all of Western Europe. Nordstream lets them do that, and that is (was) a significant wedge between Germany and Eastern Europe.
Before 2022 Ukraine shut down the pipeline to the EU in 2009 and threatened to do so again in 2014.
I'm not sure what other country or bloc would ever accept the national security concept of "we can cut you off from energy at any time, to keep you aligned against that other guy" as something they're supposed to support.
Meanwhile the pipelines existed and can be configured to work the other direction, so the somewhat friendly relations at the time between Germany and russia could have secured gas supplies for Poland and Ukraine.
So "we'll cut you off when we want", "you're evil anyway" and "hey, don't bypass us", all at the same time. No, thanks.
That said, the "moral high ground" solution would have been to get rid of fossils earlier - which wasn't much of a talking point by the objectors to Nord Stream 2, except for the Green party.
Of course, Poland and Ukraine would have lost their leverage that way as well, while Germany would have lost the lever of economic relations with russia, so that option might have been even more fragile for Eastern Europe.
> Before 2022 Ukraine shut down the pipeline to the EU in 2009 and threatened to do so again in 2014.
That is a complete lie, Ukraine did not "shut down the pipeline", Russia did - both times - because of their disputes (both trade and physical) with Ukraine. During those shutdowns, Ukraine was not receiving gas either.
The root of the dispute being that Russia massively increased the price Ukraine had to pay for gas as political punishment.
Russia then used that as leverage to try to get other nations, like Germany, to put pressure on Ukraine themselves.
In 2009, Gazprom proposed various alternatives to the main route, some including alternative routes through Ukraine that Ukraine rejected. In the end they shipped some ~12% of their usual through-Ukraine amount as additional shipments on other routes. Doesn't sound like russia was unwilling to deliver. But I'll concede that point as uncertain, given that the EU fact finding mission to figure out who stopped the shipments to the EU didn't come to conclusive results. (some data in https://www.cep.eu/Analysen_KOM/KOM_2009_363_Sicherheit_der_...)
In the end, I think Germany should have gotten out of fossils in general, no matter what happens to Eastern Europe once the mafia-run petrol station that cosplays as a country feels the pressure. would've-should've-could've.
This is a dodge, and you are (rather verbosely) wiggling away from acknowledging a plainly counterfactual statement you just made:
In 2022 Ukraine shut down the pipeline to the EU in 2009 and again in 2014
You can dissect the 2009 and 2014 gas disputes, and speculate about who "provoked" whom all you want -- but as a matter of public record that it was the the Russian operator who cut the flow of gas in each case, not its counterpart.
When did they do that? Provide your sources please.
Note that your link from two posts up states:
> Russia in June halted gas supplies to Ukraine in a price dispute that arose as Moscow sought to ramp up political pressure following the exit of Kremlin ally Viktor Yanukovych in February, amid "Euromaidan" street protests and the occupation of public buildings.
That is, Ukraine was not the first mover even within the confines of the trade dispute (ignoring the fact that Russian troops were literally occupying Ukrainian soil and attacking their cities at the time).
Your argument seems to be that Europe was upset that Ukraine, after having been literally fucking attacked by Russia, might cut off the Russian gas supply (even though they didn't), and so Germany was justified in going around Ukraine for gas and ignoring the whole Russia invading their neighbors thing.
TL;DR from 2014-2022 Germany was happy to leave them out to dry.
Indeed it doesn't. Countless other interesting facts that relate Germany and Russia, politicians, banks, "journalists", etc. We do have to remember that half of it was under USSR influence, to be candid. In my opinion, the war in Ukraine exposed an enormous European mess when it comes to scrutiny and the difference between perceived corruption and reality.
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.
> "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."
"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.