Europe’s biggest fraud suddenly turned into its biggest espionage scandal. A sensational story in the Financial Times reads like a John Le Carre thriller but isn’t fiction. Investigators have discovered that years ago Russia infiltrated Europe’s financial, political, NATO, police, and military systems. And at the center of this scheme was a middle-aged, Austrian-born Czech named Jan Marsalek who disappeared in 2020 after being charged with fraud and embezzlement involving Germany’s $2-billion Wirecard scandal. Now, four years later, he is also accused of obtaining and selling secrets to the Russians as he rose to the position of Chief Operating Officer of the German payments processing giant. He commingled his crimes. He sold the Kremlin access to Wirecard’s confidential data base containing financial information about millions of people. He embezzled funds and also used his company’s transactions business to bribe officials and finance Russian undercover operations and crimes. “Marsalek used compromised intelligence officials in Vienna to spy on European citizens and plot break-ins and assassinations by elite Russian hit squads,” wrote FinTimes’ reporter Sam Jones.
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German wanted poster
Interestingly, novelist John Le Carre was an expert on spies as well as fraudsters because he knew that they were cut from the same cloth. Each relies on deception and dishonesty, he explained in his brilliant, semi-autobiographical book “A Perfect Spy”. He realized the similarity because he was raised by a father who was a globe-trotting con man and because Le Carre himself did a stint as a spy with British intelligence before becoming a writer. Essentially, he posited, success in either walk of life requires the same skill set of lies, subterfuge, trickery, and amorality. “Being found out is not the worst thing that can happen to a spy. Being wrong is,” he wrote.
Being wrong – and also found out -- is what has happened to Marsalek. For years, he lived a glamorous life as an executive and jet setter. Now authorities believe he likely hides away in a luxurious bolthole in Dubai. It also appears that he’s been a criminal over-achiever all his life. His meteoric rise at Wirecard was puzzling because he was a school dropout who quickly rose to become its COO and one of the most powerful businessmen in Germany. By 2020, the company was more valuable on stock markets than the country’s largest financial institution Deutschebank. And its executives became the toast of Germany’s financiers as well as its government ministers and premiers.
“He already stands accused [in 2020] of stealing hundreds of millions of dollars from investors,” wrote The Wall Street Journal. “Following multiple international investigations, officials from intelligence, police and judiciary agencies in several countries now say the 43-year-old native of Austria used his defunct payments company to illegally help Russian spy agencies move money to fund covert operations around the world.”
It’s believed that Marsalek became involved in 2013 with the GRU, Russia’s military intelligence agency, and with the SVR, its overseas spying organization. Both wanted access to Wirecard’s financial data as well as to its payment services in order to pay off corrupt European politicians, intelligence officers, and informants or to blackmail officials and funnel money into conflict zones in the Middle East and Africa. Worse, wrote The Wall Street Journal, “officials suspect Marsalek was gathering information on Germany’s main BND intelligence agency and the Federal Criminal Office, the country’s equivalent of the FBI, and handing it over to Moscow.”
Marsalek in Russia and his girlfriend. Der Spiegel
After Wirecard went bust, Marsalek fled to Belarus by private jet then Moscow. Along the way, he worked with the Wagner Group’s late founder, Yevgeny Prigozhin, setting up mercenary armies in Africa and the Middle East. But his Russian skulduggery began years before, said Le Monde, after he was recruited on a yacht by a Russian actress. She introduced him to a lavish, oligarchic lifestyle that provided links to top Russian officials who made him fabulously wealthy by paying him to obtain illicit information.
Of course, one woman does not a fraudster make. Lying, skulduggery, and Russian links came naturally to Marsalek. His grandfather was a Russian spy during the Second World War, wrote Der Spiegel. Grandad’s name was Hans Marsalek, an ethnic Czech communist and resistance fighter, who survived detention in a Nazi concentration camp then co-founded what later became Austria’s intelligence agency. The elder Marsalek received Austria’s highest honor for service to the state and died in 2011, when Marsalek was 31.
His story is sensational and worthy of a movie or a Netflix series. But geopolitically, the ramifications of his misdeeds are serious and worrisome for the Western alliance. He has also given Austria, a sleazy breeding ground for espionage and corruption, another black eye. For centuries, Vienna and its environs have been deeply linked to Moscow and its permissive laws have encouraged and allowed spies to thrive there, safe from detection or extradition. But after news of this shocking Russian intelligence operation broke, Austria’s Chancellor publicly pledged to clean up the place and enact laws to match those in the rest of Europe.
The scandal also exposed corruption inside Austrian institutions. Allegations are that Marsalek used an Austrian security official to obtain confidential police or financial information from other European police departments on behalf of Russian authorities. It is also alleged that his associates accessed Europe’s Schengen Information System, on behalf of Moscow, to track people entering or leaving the region, including movements by Russian dissidents or agents, according to Britain’s MI5. A case in point involved the GRU assassination in 2019 of a Chechen dissident in a Berlin park. A Russian hitman was convicted and serves a jail sentence, and is the same individual who was cited this year as a possible beneficiary in a prisoner swap for Alexei Navalny that never took place.
Assassination in Berlin Park in 2019 by Russian
Of greatest concern is that Marsalek facilitated the theft by the Kremlin of a special computer containing the advanced cryptographic tools used by Western governments to send classified information. Put another way, he helped compromise the integrity of NATO and government communications between allies for years. The Kremlin has known everything.
Naturally, the case has rocked Europe. On April 6, NATO’s general Secretary Jens Stoltenberg admitted that Putin spies had worked in NATO’s headquarters for years before being kicked out. These revelations underscore that the Cold War never ended and that Russia has been waging war for years against Europe as well as Ukraine. Clearly, Europe must now unearth all its traitors and terrorists and continue to mobilize its militaries against Putin. It must also clean up its political system. Last summer, the Qatargate bribery scandal exposed corruption in high places in Brussels involving cash in suitcases accepted by European politicians. But this newly-revealed treachery is on a breathtaking scale and raises new questions. What German Chancellors or other European leaders have been, or still are, in Putin’s pocket or on his payroll?
Stay tuned. Putin has spent decades fighting Europe and NATO. He began his career as a spy for the KGB in Germany before going back to Moscow but now all the world realizes that he found his perfect replacement.
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