Subscribe or upgrade your account to read:

From payments to armaments: the double life of Wirecard’s Jan Marsalek | Free to read

Wirecard AG

From payments to armaments: the double life of Wirecard’s Jan Marsalek | Free to read

A suspect in one of Germany’s biggest financial frauds talked of assembling a Libyan militia and bragged of adventures with Russian troops

This story is outside the FT’s paywall (you do not need a subscription to access it) so it can be shared freely.

It was early 2018 when Jan Marsalek, the young chief operating officer of German fintech champion Wirecard, held a meeting in his palatial home in Munich to talk about a new special project he was interested in: recruiting 15,000 Libyan militiamen. 

Mr Marsalek has now vanished in the wake of Wirecard’s implosion. An international warrant has been issued for his arrest. German prosecutors regard him as one of the key suspects in a vast fraud that for years inflated the payment company’s balance sheet and profits and helped propel it into the prestigious Dax 30 index.

But as documents and testimony from first-hand witnesses reveal, Mr Marsalek’s interests went far beyond unorthodox accounting.

The 40-year-old Austrian has led multiple lives, with complicated and overlapping commercial and political interests. Sometimes those interests cleaved to Wirecard’s aggressive expansion plans in frontier markets. Sometimes they coincided with Mr Marsalek’s own sprawling and unusual range of personal investments. And sometimes they seemed to fit neatly with the work of Russia’s intelligence agencies. 

Mr Marsalek is now a person of interest to three western intelligence agencies, according to officials in three countries.

In particular, they are intrigued by Mr Marsalek’s association with individuals or networks linked to Russia’s military intelligence directorate, the GRU — the agency blamed for the attempted assassination of ex-spy Sergei Skripal in Salisbury, the covert war in Ukraine, and the manipulation of the 2016 presidential election in the US. 

He has an extreme affinity for security . . . I could never tell whether it was real or staged

A person who worked with Mr Marsalek

Since 2015, Libya has been a focus of Mr Marsalek’s world beyond Wirecard. His activities there — fragments of which have been pieced together by the Financial Times — are a window into his alternative work: secretive projects that took him across the Middle East, often into conflict zones. For the past decade, Libya’s bloody civil war has kept all but the most adventurous western investors and boldest politicians away. But it has become the locus for a hidden war of interests — both commercial and diplomatic. And a playground for spies.

Over the past six months, the FT has spoken to half a dozen individuals who worked directly with Mr Marsalek on projects in the north African country, and gained access to documents and emails concerning his affairs far outside the scope of his job at the helm of a major German multinational.

Most of those people spoke on condition of anonymity because they are fearful for their livelihoods and their personal safety. 

“In general, Marsalek is a very strange character: he has an extreme affinity for security and is very mysterious,” said one of those who worked with him. “I could never tell whether it was real or staged.”

Another recalls a lunch in June 2017, at the Käfer-Schänke in Munich, a luxury restaurant that was a favourite haunt of Mr Marsalek’s. Across a table of starched linen and pristine crystal glasses, Mr Marsalek boasted to his two dining companions of a trip he had made — to the desert ruins of Palmyra, in Syria, as a guest of the Russian military. He was there with “the boys” right after they retook it from Isis, he said, and it had been a fantastic experience. Russia’s defence ministry did not respond to a request for comment.

What has been hard to understand, one intelligence official stressed, is the degree to which Mr Marsalek was aware of who he was becoming entangled with, or whether his often maladroit actions were instead driven by a deluded sense of adventurism.

The FT put a list of questions concerning Mr Marsalek’s activities to his lawyer in Germany, who declined to comment.

Prinzregentenstrasse 61, Mr Marsalek’s palatial home in Munich © Lyndon Hayes

A palatial home next to the Russian consulate

Prinzregentenstrasse 61 was described by Mr Marsalek as his home. But the huge urban villa — which stands opposite the Russian consular compound in Munich — was as austere inside as it was embellished outside. Guests would be welcomed by a female assistant and shown to the spotless salon. Polished floors and brilliant white walls, spartanly, if strikingly, adorned with modern works of art, gave the place an eerie formality, recall visitors — somewhere between an Apple store and an extremely expensive lawyers’ practice. 

It was an aesthetic Mr Marsalek cultivated in his dress, too, in what one source described as an unvarying “uniform” of a neatly tailored suit and a brilliant white, crisp shirt, open at the collar.

The official purpose of the meeting at Prinzregentenstrasse 61 in February 2018, was to discuss humanitarian reconstruction in Libya.

Months earlier, through contacts he had made at the Austrian-Russian Friendship Society — an organisation backed by the Russian government to promote networking between senior policymakers in the two countries — Mr Marsalek had recruited a small group of Austrian security and international development experts for such a project.

The Friendship Society, which has courted criticism in the past because of its cosy relationship with Moscow, hit the Austrian headlines this week, after it was revealed that its finance secretary had been receiving classified documents from Mr Marsalek — illegally obtained from Austria’s interior ministry and security service — and passing them to the country’s far-right populist party, the FPÖ.

Some of those Mr Marsalek used the society to gain introductions to, however — who included senior serving Austrian government officials and former diplomats — grew less than comfortable with Mr Marsalek’s interest in Libya as they came to understand more about it.

Originally, Mr Marsalek had offered them €200,000 to work for him and produce a report to suit his needs, according to an informal agreement discussed in a series of emails. Through contacts in the Friendship Society, he secured the promise of an additional €120,000 funding from Austrian government ministries, including the Ministry of Defence, according to signed official documents.

But as time passed, Mr Marsalek appeared to have little interest in the subject of rebuilding communities in war-ravaged Libya that he had initially discussed.

“Mr Marsalek’s interests were very different to economic development,” one person working on the project said.

“I don’t know what his [Mr Marsalek’s] real plans were, but we were supposed to be a fig leaf for whatever he was doing,” said another. “We were there to add a humanitarian gloss to things.” 

In fact, Mr Marsalek was much more interested in how control could be gained over migration flows on the southern Libyan border, using armed force, three of those working with him said. 

“The priority for JM is ‘to close the border’ preferable [sic] via an ‘15,000 strong border police force’ that would be comprised of former militias. He repeated this throughout the conversation,” according to minutes of the February 2018 meeting, which were circulated to participants, and have been seen by the FT. “This could be used in his opinion with the national government in Tripoli as a leverage against the power brokers in the east. Closing the border can be sold to the EU as ‘solving the migration crisis.’…” 

In pursuit of such goals, Mr Marsalek was not drawn towards soft solutions. He expressed very little interest in the pages of detailed work experts had prepared on community and social development, and encouraging local entrepreneurship and civil society in Libya’s fractured south. 

On one occasion, he was overheard in a parallel conversation in the same room discussing “equipment” being sent to Libya. He appeared to be watching body camera footage taken from an incursion between unknown groups of gunmen in the country. The footage was extremely violent.

More worrying yet, to some, was a proposal from Mr Marsalek to introduce the Austrians he had assembled to “a Russian who wears a number of hats . . . who could provide security”, as a note taken by one participant records.

Andrey Chuprygin was referred to simply as ‘the colonel’ by Mr Marsalek © Lyndon Hayes

The Russian was Andrey Chuprygin — whom Mr Marsalek would often refer to simply as “the colonel”. Mr Chuprygin is a veteran Arabist who teaches at Moscow’s Higher School of Economics. He had a long career serving with the Russian military in the Middle East. 

For two of those Mr Marsalek was working with, whose background was in European diplomacy and security, Mr Chuprygin’s involvement rang serious alarm bells about the real purpose of the work. 

A western intelligence official said they were correct to be concerned: Mr Chuprygin had been assessed with a high degree of confidence to be a former GRU senior officer with strong links to the agency. 

Mr Chuprygin told the FT he had consulted with Mr Marsalek on the Libyan security situation. The country’s shifting politics and tribal dynamics are his special subject, he said. 

But, he added, his contact with Mr Marsalek had been “strictly limited” to his expertise as a researcher and a linguist. He resigned his military commission in 1989, he stressed, and had only ever served in the Russian armed forces as a Middle-Eastern language specialist: “I never ever had any connection to any intelligence-gathering service, military or otherwise.”

Mr Chuprygin said he knew nothing of Mr Marsalek’s connections to other Russian agencies or security forces. 

A Libyan cement factory turned Russian barracks

Emboldened by its successes in Syria, Russia has significantly ramped up its involvement in Libya in recent years. Doing so opens up a host of geostrategic opportunities that suit the Kremlin’s agenda: greater influence there helps Russia towards its goal of prising the eastern Mediterranean from Nato’s sphere of influence. It holds out the prospect of a major future client for Russian armaments. It guarantees Russia’s future at the top table of international diplomacy. And it offers a lever of influence against the EU when it comes to the single most sensitive and politically charged sore point of the past five years across the 27-member bloc: migration. 

Russia’s involvement in Libya, however, has so far been strictly off-the-books. It has used its military intelligence arm, the GRU, to co-ordinate clandestine operations there using Russian mercenaries as troops, according to military analysts. It is a model that has worked well in Syria and in Ukraine, where soldiers from the Wagner Group in particular, have been well-documented in dozens of local media reports, and official diplomatic cables, in deployment. The exact ownership, control and origin of the Wagner Group are unknown. Although it is a commercial organisation, western intelligence believes it to be used extensively by the GRU. The Russian government has consistently denied it has any relationship with the company. 

“Russia is in no way involved in military activity in Libya and has nothing to do with these groups,” Kremlin spokesman Dmitry Peskov told the FT.

A UN report, leaked in May, concluded that between 800 and 1,200 Wagner personnel were active in Libya since October 2018, according to Reuters

“This is a very murky business. There isn’t a huge amount of information available,” said Sergey Sukhankin, an analyst at the Jamestown Foundation, a US non-partisan think-tank historically linked to the CIA. Mr Sukhankin has followed the activities of Russian private military contractors for several years in Libya. “[They] are tools of geopolitics. In Libya they are there to apply pressure . . . To gain leverage.”

In fact, Russian mercenaries have been in the country for years, in a series of ad-hoc deployments. In 2017, according to Mr Sukhankin, their presence became more substantial — and lasting.

The first instance of Russian boots on the ground that year was at industrial facilities in Libya Mr Marsalek has repeatedly claimed to co-own.

Several dozen heavily armed soldiers from Russia’s RSB Group were contracted in a “de-mining operation” at plants in eastern Libya owned by the Libyan Cement Company (LCC) — deep in the territory of warlord Khalifa Haftar, at the time, Russia’s principal ally in the country.

RSB hires highly trained Russian special forces combatants. Its chief executive Oleg Krinitsyn has claimed that its intake includes veterans of Russian Spetsnaz forces, including the feared Alpha and Vympel units, the FSB and the elite Ryazan parachute regiment.

A spokesperson for RSB Group said that the company had no knowledge of Mr Marsalek and dealt only with “the director” of LCC.

Pictures of RSB personnel posing in front of crude signs spray-painted on walls in English reading “Mine — RSB Group” were circulated in Libyan media at the time, and appear on the company’s own website. General Haftar’s official spokesperson, Colonel Ahmed al-Mismari, gave several interviews to stress the limited footprint of the group.

RSB said its work in Libya was “a humanitarian mission”, and that it “does not co-operate with the special services or the government of the Russian Federation”.

The spokesperson said that after RSB had completed its work in Libya, a “fake company appeared” at the factory “that tried to work under our name”.

According to local social media reports, soldiers at the LCC plant frequently left the facility and appeared to be engaged in more than just ordnance disposal.

LCC is publicly described as a company owned by the London-based Libya Holdings Group. LHG describes itself as an organisation that partners with third-party investors seeking to become involved in Libyan business opportunities.

Ahmed Ben Halim, the British FCA-registered chief executive of LHG, told the FT that the company had no connection to Mr Marsalek. LHG has previously publicly claimed that LCC is backed by 15 investors from Saudi Arabia and the United Arab Emirates.

Prior to its purchase by LHG in 2015, LCC was owned by the Austrian conglomerate Asamer.

According to five separate sources, in Austria, Germany, Libya and Russia, Mr Marsalek claimed to be one of the new owners of LCC, however.

Documents seen by the FT from a Munich-based consultancy firm, Wieselhuber & Partner, which worked for Asamer, additionally show that Mr Marsalek applied to have a €20m debt waiver granted by the Austrian state against LCC’s facilities in 2017. The money was paid out to Mr Marsalek, the documents indicate.

According to Mr Sukhankin, the “pattern” for the deployment of Russian mercenaries across the Middle East and in Africa has increasingly revolved around establishing their presence through on-the-ground commercial contractual relationships, such as that between RSB and LCC.

It’s not just about plausible deniability [for the Kremlin] but also about the commercialisation of the project

Sergey Sukhankin, analyst at the Jamestown Foundation

He points to the Wagner Group’s official presence in the Central African Republic, where it is contracted to secure mining facilities, as a comparable example.

“They have to be financed by sources where they operate. It’s not just about plausible deniability [for the Kremlin] but also about the commercialisation of the project . . . sustainable relationships to keep them on the ground without cost to Russia . . . the geo-economics of it are as important [as the military influence].”

When it came to his plans to try to set up a southern Libyan border force, Mr Marsalek regularly told interlocutors he would have no problem securing armed force on the ground from Russia — thanks to deep relationships he held with Russian “security specialists”. He referred to his Libyan business interests, including cement factories, as an example of how he had already done so.

Yet Mr Marsalek’s grand ideas in Libya never seemed to come to fruition. LCC’s operations are still partially furloughed. Libya is still a divided country. Russia’s mercenaries there have suffered significant recent setbacks. And Wirecard has collapsed. 

For many of those that dealt with him, even closely, his motives remain unclear. “He wanted to have influence and build networks,” said one, who speculated that Mr Marsalek’s lack of formal education left him as an outsider in Austria and Germany growing up, with a need to be accepted and to impress.

Secrecy and dissemblance seemed to be the tools Mr Marsalek had learned to do just that, they said. In Vienna, in particular — where clubbable networks of politically-aligned individuals dominate business life behind the scenes — Mr Marsalek seems to have been desperate to build his own web of allies and placemen.

“The only thing he seemed to like more than having secrets and being involved in all of these surreptitious things, was letting you know it,” said another.

That was apparent in 2018, when Mr Marsalek turned up on Wirecard business in London with a highly unusual dossier, which he disclosed to traders and speculators, in an apparent attempt to compromise or impress them. Wirecard at the time — and Mr Marsalek in particular — were desperate to fend off and, if possible, neutralise those short-selling the company’s stock. 

In Mr Marsalek’s possession were four highly sensitive, classified reports, from the Organisation for the Prohibition of Chemical Weapons, containing detailed analysis of the Russian plot in the sedate English cathedral city of Salisbury in March 2018, in which one of the world’s deadliest nerve agents had been used in a botched assassination attempt against a GRU defector, Sergei Skripal. 

The sensitive files contained the precise formula for novichok — a poison developed by Soviet scientists in the cold war. 

Where Mr Marsalek could have obtained such documents is unclear. Leaks from the OPCW, one of the world’s most secure international organisations, are unheard of. Months prior to Mr Marsalek’s London trip, the body had, however, been the target of a GRU-led hacking campaign, which was unmasked by Dutch intelligence services in October 2018. 

That Mr Marsalek should have so brazenly touted such sensitive documents in London, at a time when British intelligence and security services were on high alert against Russian operations, and vigorously pursuing leads relating to the Salisbury incident, speaks to a recklessness that even for Russian operatives might be considered excessive. 

That the now-vanished executive should have such documents in his possession at all, on the other hand, marks him out as more than just a fantasist.

Additional reporting by Henry Foy and Max Seddon in Moscow, Andrew England and Dan McCrum in London, Erika Solomon in Berlin and Olaf Storbeck in Frankfurt

Letter in response to this article:

Wardrobe malfunction? Call the continuity police / From Muffy Calder, Glasgow, UK

Copyright The Financial Times Limited . All rights reserved. Please don't copy articles from FT.com and redistribute by email or post to the web.