US Justice Department Said to be Investigating Wirecard in Alleged $100 Million Bank Fraud in Cahoots with Marijuana Firm

At a minimum, Wirecard AG (WDI:DE) has generated a good amount of fascinating, yet disappointing news, as the once high-profile Fintech plunged into bankruptcy.

Today, according to WSJ.com, the US Department of Justice is investigating allegations of bank fraud surrounding a cannabis-focused company. While details are thin, WSJ is citing unnamed sources in regard to the report that involved a $100 million conspiracy.

Two businessmen are said to have already been charged in the alleged fraud, that involved conspiring with payment processors and others to trick U.S. banks into approving credit-card payments for marijuana products. In the US, banking and cannabis firms have had to dance around a lack of regulatory clarity making it difficult for legal firms to operate at times.

The wheels fell off of Wirecard when auditor EY uncovered €1.9 billion in missing funds. The former CEO has been arrested along with another executive that was based in Dubai. The former COO is on the run with several reports indicating he is somewhere in Asia.

Meanwhile, officials are attempting to piece it all together as the bankruptcy manager seeks possible suitors for parts of the firms.

Shares in Wirecard recently traded over €100. Today, Wirecard shares are bouncing around €2 representing a spectacular collapse in value wiping out billions of dollars in investor capital.

 

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