What We Can Learn From the Wirecard Whistleblower

The Wirecard scandal was one of Germany’s biggest accounting frauds, and many anti-fraud professionals followed the saga of its crash with baited breath. It makes sense, then, that virtual attendees of the ACFE Fraud Conference Asia-Pacific eagerly attended the conversation between Pav Gill, a lawyer best known as the Wirecard whistleblower, and Stefania Palma, a Financial Times Singapore correspondent who helped Gill break the story.

Wirecard, a German payment processor and financial services provider, crashed in 2020 after admitting to a €1.9 billion misrepresentation of funds. While the fraud rocked the fintech world at large, it also forever altered the life of Gill and his former colleagues. Given his significant role in the company’s downfall, Gill offered valuable insight during his conversation with Palma, which offered a platform for him to share his story and to address the lessons learned.

Noticing red flags

As Wirecard’s Singapore-based in-house lawyer, employees approached Gill with suspicions of wrongdoing. After those reports, Gill took steps towards an internal investigation. Understanding that establishing trust and confidence with the internal employees was paramount, he met with them outside the office in an obscure cafe. Almost immediately, he could tell that there was “irrefutable evidence of fraud,” and that the scam “ticked every box in the fraud manual.” In the moment of that realization, Gill noted that “the whole world just turn[ed] upside down.” Looking back now, he can pinpoint organizational red flags.

Some of Gill’s challenges with working at Wirecard stem from the integration issues between the Asia-Pacific and the Europe offices, and the lack of internal standardization. He told listeners that there was no consistent way of doing things: employees used messy spreadsheets; operations were rudimentary and granular; and the implementation of rules was unpredictable. “That was kind of weird because [Wirecard] was trying to be this up-and-coming fintech...a leader in technology and payments, and also a financial institution,” but the reality was “far more chaotic.”

While he would have expected more organization from a large fintech company, Gill thinks a lot of the chaos was intentional. For example, he explained, if someone was engaging in fraud, they wouldn’t want to use sophisticated technology that can track finances effectively. Oftentimes, the old-fashioned processes were less likely to signal red flags in the workplace.

Gill shared there was no real corporate governance being implemented in a strict manner. Managers enacted regulation unpredictably and in a way that allowed them to fire someone if they had suspicions of anyone planning to expose fraud. “If you look back, a lot of potential whistleblowers were fired on technical grounds,” revealed Gill. Gill also noted a huge failure of corporate checks and balances, and a threatening work atmosphere. The Asia-Pacific CFO had an enormous amount of power over finances, including every department’s budget and wages, so no one ever wanted to offend him. The unpredictability kept employees constantly second-guessing and also gave Gill no sense of security in handling a situation like that. 

A threatening work environment

Once Gill launched the internal investigation, the Asia-Pacific local manager created an intimidating workplace by raising his voice at Gill, threatening his employment, trying to discredit his work and shutting Gill’s office door deliberately throughout the day. Gill recalled the isolation he felt, as if it was him against the whole company. He worried not only about his employment status, but also about the trajectory of his career and the safety of himself and his family. 

Over and over, he stressed that his primary concern was always about protecting the internal whistleblowers. “It’s never easy when, not only do you suspect your employer of engaging in dubious practices, but when you actually have your colleagues come to you in confidence and say this is what the company is doing,” Gill told the virtual audience. “They fear for their lives...not just theirs but those of their families, simply because many of these employees were hired by the very people that they’re accusing of malfeasance.” 

Gill was forced to resign after he refused to leave for a business trip from which the Munich office had hinted he wouldn’t return. The office told Gill they would part on professional terms, and they even promised fair references. However, Gill noticed people tailing himself and his mother. During job interviews, CEOs spent hours asking him about Wirecard in attempts to make him breach his NDA. “It’s one thing if the Wirecard thing didn’t work out from an employment standpoint, but another thing if [they’re] still going to badmouth and discredit me,” Gill shared. Gill felt overwhelmed and tormented still as he had so much information but no way to act on it. After notable encouragement from his mother, Gill eventually reached out to the Financial Times to blow the whistle.

Gaps in whistleblower protections

Gill stressed that “there’s a huge gap” in options for potential whistleblowers. The U.S., for example, has advanced SEC protections and rewards programs, but Gill noted that something like that doesn't exist in other first-world nations. From a technical standpoint, former employees can face recrimination by keeping information from company computers in order to prove their point. Blowing the whistle requires enough confidence to believe the crime the company committed is larger than the crime the employee may have committed by downloading confidential information. Gill cautioned that “it could fall flat, and then you are left without a license or a job.” Also, Gill noted the cultural element that discourages employees from coming forward. Many people are taught from a young age that they shouldn’t “snitch” on people, even if they know someone is doing the wrong thing.

Because of these potential limitations and deterrents, Gill advocated that governments create independent whistleblowing agencies, such as third-party organizations that listen to potential whistleblowers and determine whether they are overthinking something or if they are on the right track. Then, those organizations can guide people toward avenues that will support them coming forward. He fears that internal whistleblower tools are used to root out potential whistleblowers instead of support them. He implored the need for a paradigm shift and a rethinking of who is really the bad actor or criminal in these situations. “We need to ask big questions, like what exactly is the meaning of doing the right thing?”

Even though he revealed the biggest financial scandal in Germany’s post-war history, he has not yet received a word of thanks from anyone at the company, and he is still unprotected in Europe. There are moments where he doubts his safety, forcing him to ask, “Is this how a whistleblower should be treated?” He gains confidence knowing he had a crucial impact on the financial world, though he still feels guilt for everyone who lost their job and now has the “Wirecard stigma” on them professionally. “The burden of that should fall on those who committed the crimes,” he said. Yet, sadly, the shame seems to fall on the former employees. Gill believes this reality will be a theme for years to come whenever the Wirecard story is told.

As complicated and nuanced as Gill admits the story is, he has learned valuable advice that he was eager to offer virtual attendees: “Use your moral compass as your guide. If you have the truth and you have the ethics and the principals in your favor, then I think there’s nothing really to fear.”