With the positive effects of virtual currency, one has to witness the negative use of this currency also. Recently one such incident has come into light by a German Banker. Germany based Wirecard, which is well known for issuing crypto debit cards, is implicated for several criminal activities. A Mastercard executive who operated at FBME bank in Cyprus has been linked to these suspicious transactions. Earlier in 2014, US Financial institutions were asked not to deal with FBME.
FBME Bank was accused of dealing with money laundering activities, and it was suspected of helping organized crime gangs and terrorist funding programs. It was also accused of fraud and other illicit activities by the US Financial Crime Enforcement Network.
Wirecard link with FBME
Wirecard and FBME have alleged links through an unnamed key account, and recently $2.1 billion in cash was reported missing from the company books. This led to Wirecard filing for insolvency, and the CEO of the firm Markus Braun was arrested in Germany.
The law enforcement agencies are on the lookout for Wirecard CEO Jan Marsalek, who is allegedly hiding in Russia.
The new allegations involve an unnamed executive of Mastercard who is accused of money laundering activities. The transactions were allegedly covered up in such a way that it would evade the detection mechanism of Mastercard and Visa anti-fraud and money laundering detection system which is considered very serious.
The system usually checks for any sort of suspicious transactions between companies. To avoid such detection, they created phantom transactions many times between the suspicious firms to avoid any red flags in the system. In this way, hundreds of thousands of transactions were done to avoid detection by the system.
Visa and Mastercard impose fine on Wirecard:
Due to such fraudulent activities in the past, both Mastercard and Visa also have imposed fines of more than $10 million in the last few years. The allegations about such suspicious activities of Wirecard were earlier detected by Visa many years ago.
Apart from that, Wirecard is also facing an investigation in an alleged $100 million bank fraud connected to Eaze Technologies. In this wake, the US Department of Justice is investigating the charges about the financial fraud conspiracy.
Wirecard is also alleged of miscoding gambling transactions, and this has led to severe losses for several clients in the recent past. It is also notorious for having maximum stolen card purchases.