At the FBME Bank in Cyprus, Mastercard Executive Accused of Criminal Activities Cover-Up
July 28, 2020 4:23 pm
In a new report, Mastercard executive operating at the troubled FBME bank in Cyprus has been accused of Money laundering cover-up at the bank, linked with the Controversial German payments processor and the issuer of several crypto debit cards, Wirecard.
The United States’ Financial Crime Enforcement Network had banned U.S. financial institutions in 2014, from dealing with FBME after the bank was accused of being used to “facilitate money laundering, terrorist financing, transnational organized crime, fraud, sanctions evasion and other illicit activity.”
According to a July 27 article from The Times, the allegations included helping the processing of funds tied to the Syrian chemical weapons’ program and internet child sex abuse.
FBME’s Alleged Links to Wirecard
FBME is reported to have links to Wirecard via an unnamed key client, which has itself recently become mired in its scandal after being unable to account for a missing $2.1 billion in cash on the company books. The uncovering of the missing funds encouraged Wirecard to file for insolvency and resulted in the arrest of Markus Braun, the firm’s CEO in Germany. Jan Marsalek, Wirecard’s chief operating officer, is claimed to be lurking in Russia, where he is believed to be relying on funds transferred using cryptocurrency.
In the latest part of the saga at FBME, an unnamed Mastercard executive has been accused by private investigators of a money-laundering cover-up using a system of “phantom transactions” designed to thwart detection by Visa and Mastercard’s anti-fraud and money-laundering checks.
The system supposedly worked by pinging phantom transactions back and forth between firms, thereby weakening the incidence of suspicious (red flag) transactions within a higher artificially raised volume of hundreds of thousands of apparent transactions. The fresh allegations have been dismissed by the spokesperson for FBME’s shareholders as being fantastical and unproven, saying that the court has not found the private investigators’ findings to be “supported by any evidence base.”
A Mastercard spokesperson stated the Times that while the company would not comment on the FBME case, Mastercard “maintains a rigorous enforcement process” for payments processors, which can involve fines and/or the suspension of licenses.
Wirecard’s Unfolding Scandal
Wirecard is claimed to have miscoded gambling transactions and to have had high levels of stolen card purchases and reversed transactions, Per a report today from the Wall Street Journal.
In acknowledgement, both Visa and Mastercard are alleged to have each imposed fines on Wirecard over $10 million over 10 years ago. Sources have declared that Visa executives raised concerns about the German payments processor since at least 2015.
The U.S. Department of Justice over its possible role in an alleged $100 million bank-fraud conspiracy correlated to the marijuana marketplace Eaze Technologies Inc. also investigated the Wirecard. Amid the unfolding scandal, following a temporary suspension, the UK’s financial regulator recently reactivated the Wirecard subsidiary responsible for issuing Visa crypto debit cards.