An executive at Mastercard was allegedly involved in a sophisticated money laundering operation with links to disgraced payments firm Wirecard, according to reports.
The executive was operating at Cyprus-based FBME Bank at the time, with the bank’s owners commissioning the report into the alleged criminal activity, The Times reported. The news outlet uncovered a variety of evidence about the alleged fraudulent activity, including a mechanism for fooling international payment systems into processing potentially illegal transactions.
Allegations of criminality include terrorism financing, with transactions processed in connection with Syria’s chemical weapons program, and transactions around online child sex abuse.
The bank is connected to Wirecard through an undisclosed client, an unfortunate connection given the ongoing scandal with over $2.1 billion of missing cash at the German card operator.
The missing funds led Wirecard to initiate insolvency proceedings, resulting in the eventual arrest of former CEO Markus Braun. The firm’s COO, Jan Marsalek is currently thought to be in hiding in Russia, funded by money transferred to him in digital currency.
In this latest twist to the story, the unnamed Mastercard exec has been accused by investigators of using phantom transactions to evade money laundering checks. By running these fake transactions at inflated volumes, it is alleged the impact of the suspicious transactions was diluted, preventing existing Mastercard and Visa payment systems from flagging the transactions.
FBME shareholders have dismissed the reports, citing a lack of any evidence behind the investigators’ findings.
A spokesperson for Mastercard was quoted by the news outlet saying the allegations had yet to be proven, and that the firm maintains “a rigorous enforcement process” for payment processors.
Wirecard is currently subject to ongoing investigations by law enforcement authorities. Alongside the hole in its accounts, the firm is being investigated by the U.S. Department of Justice over its role in a $100 million bank fraud conspiracy.
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