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Singapore Charges Citadelle Corporate Services Owner In Wirecard Collapse – pymnts.com


A Singapore businessman faces charges of falsifying documents that showed more than 100 million euros ($118 million) in three accounts held on behalf of Wirecard AG, The Wall Street Journal (WSJ) reported.

R. Shanmugaratnam, 54, the owner of Citadelle Corporate Services, a corporate management services company at the heart of an investigation, is the first person outside of Wirecard to be linked to the suspected fraud at the disgraced German payments company.

The executive is alleged to have falsified letters from Citadelle to Wirecard in 2016 and 2017 and did so willfully and with intent to defraud, WSJ reported.

Investigators said three escrow accounts purportedly held 143.4 million euros ($169.5 million) at the close of 2015. One of them held 177.5 million euros ($209 million) at the end of 2016. But the three accounts didn’t actually hold those funds, according to documents reviewed by WSJ.

Once valued at $28 billion, Wirecard filed for insolvency in June after admitting 1.9 billion euros ($2.1 billion) said to have been deposited in two Philippines banks did not exist.

German prosecutors have charged former Wirecard CEO Markus Braun and two other executives on suspicion of orchestrating a criminal enterprise to inflate revenue and balances to hide billions in losses.

Singapore’s Attorney General’s Chambers, the nation’s leading law enforcement agency, told WSJ that Shanmugaratnam has been released on $150,000 Singapore currency ($109,386). He faces a maximum sentence of 10 years in jail and a fine. His lawyer, Narayanan Sreenivasan, declined to comment to WSJ.

In anticipation of its collapse in June, Wirecard AG executives may have raided the German payment company and deposited $1 billion in partner companies while it fought allegations of accounting fraud.

The alleged theft took the form of unsecured loans. At the time, Wirecard said the loans were used to pay its partners in Dubai, Singapore and the Philippines who processed card transactions.

Last week, three of Wirecard’s biggest lenders filed earnings reports that declared substantial losses to the collapsed company.

Frankfurt-based Commerzbank AG and ING Group in the Netherlands each took a hit of 175 million euros ($207 million), more than half of their profit for the second quarter. Credit Agricole, the French financial institution, suffered a loss of about 110 million euros ($130.6 million).

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Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.





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