Israeli boiler room managers arrested in the Philippines

Wirecard in The Philippines and Israeli Connections

A lack of funds in the amount of €1.9 billion dragged Wirecard into insolvency, thus causing problems for the company’s auditor EY as well as the German regulatory authority BaFin. The first question to be asked in the first place is whether the funds were ever in Wirecard at all. Most likely not! Another question pops up in this context: Why the Philippines?

Wirecard operated its global business with a highly networked and fragmented structure. The organization could probably best be described as amorphic. It worked through many so-called Third-Party Acquirers (TPA). Especially the Asian business but also many high-risk segments were processed via these TPAs. These TPAs are a kind of special-purpose entities that did not legally belong to Wirecard. The company has nevertheless claimed that the transaction volumes and funds acquired by these TPAs are legally and economically attributable to Wirecard. One hypothesis regarding the missing €1.9 billion is that these funds were actually available at the TPAs for certain periods of time but never in the power of disposal of Wirecard.

Israeli Scam Hub

The Philippines are interesting in this context. The last place the money is said to have been banks in the Philippines. At least a fake confirmation of a Philippine bank is supposed to indicate this. The Philippines are interesting in this respect because this is also the home turf of many Israeli scammers. In the Philippines, Israeli scammers maintain boiler rooms and companies in order to operate in the Asian region and Australia. The Times of Israel, for example, reported on the arrest of Israeli boiler room employees here.

Could the missing €1.9 billion be money associated with Israeli scams? It would be plausible, to say the least. We already know that Wirecard was heavily engaged in the global binary options fraud via scams operated by Israeli perpetrators.

Wirecard and Israeli Connections

It is well known that Jan Marsalek and Markus Braun had excellent relations with Israel and the Israeli scammer scene. Between 2015 and 2017, for example, GreyMountain Management Ltd (GMM), founded by the Israeli David Cartu and his brothers Joshua Cartu and Jonathan Cartu, operated as a TPA in the field of binary options. GMM acted as a payment processor and acquired the operators of dozens of binary options scams as customers (merchants). Additionally, the Cartu brothers were and still are massively invested in online gambling and also settled via Wirecard. In 2017, the former Wirecard UK & Ireland Director Michelle Molloy joined the Cartu brothers as manager.

We know from our network that the operators of numerous Israeli payment processors were shareholders and partners of Wirecard. These Israeli payment processors (licensed and unlicensed) such as GMM, Moneta International (now Bruc Bond UAB), or MoneyNetInt have supported broker scams and illegal transactions with their services.

The connection between the disappeared €1.9 billion and Israeli scams and high-risk ventures is currently only an educated guess and therefore a hypothesis that needs to be verified or falsified.

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