In first convictions for Wirecard case, 2 former executives get jail for helping to misappropriate funds from payments firm

SINGAPORE — In the first Wirecard-related conviction globally and in Singapore, two former employees of Wirecard Asia were sentenced to jail on Tuesday (June 20). 

Chai Ai Lim, 44, and James Aga Wardhana, 39, pleaded guilty to criminal breach of trust for their roles in abetting Edo Kurniawan, who was in charge of Wirecard AG's financial matters in the Asia-Pacific region, to misappropriate S$88,200 and S$223,070 from the company.

Chai was given 10 months' jail and Wardhana was sentenced to 21 months' jail.

Wirecard Asia is a Singapore registered company and a subsidiary of Wirecard AG, which is an international payment services company registered in Germany. In June 2020, the company's auditor EY discovered €1.9 billion (S$2.8 billion) missing from its accounts. 

The amount that was supposedly entrusted to Third Party Acquirer companies in Dubai, the Philippines and Singapore turned out to not actually exist and was later revealed to be a fraudulent inflation of the company's earnings in a case that has made global headlines.

At the time of the offence, Chai, a Singaporean, was employed as the head of finance who oversaw the company's accounting team and handled accounts for Wirecard entities in the Asia-Pacific region.

Wardhana is an Indonesian who was employed as the international finance process manager who was responsible for setting up standard operating procedures for the finance department in Wirecard Asia. Both reported to Kurniawan.

Kurniawan left Singapore on Oct 10, 2018, before investigations commenced against him and currently has a warrant of arrest and an Interpol Red Notice issued against him for the misappropriation of money.

Five other individuals have been charged in connection to the Wirecard investigation in Singapore while three of the company's executives, including its ex-chief executive officer Markus Braun, are currently on trial in Germany.

WHAT HAPPENED

Wardhana's charge was based on an incident which occurred sometime in 2018 when Kurniawan asked Wardhana to find ways to obtain S$100,000.

When Wardhana said that he was not able to get the money, Kurniawan said he would arrange for Wirecard Asia to give Wardhana the amount as a bonus, which would be later handed over to Kurniawan.

Deputy Public Prosecutor (DPP) Vincent Ong told the court on Tuesday that on July 16 in 2018, Kurniawan emailed the head of accounting at Wirecard AG about obtaining S$100,000 to be used as a "variable bonus" to retain Wardhana, who purportedly wanted to resign.

When this was approved, a S$100,000 transfer was made to Wardhana's personal bank account. He withdrew the money as instructed by Kurniawan and passed the money to another man.

Court documents did not state who the man was, what happened to the money and if it was eventually recovered. 

WIRECARD 'EMPLOYEE LOAN'

Around early October 2018, Kurniawan told Chai that he needed to transfer S$100,000 and asked if Wirecard Asia was able to make the transfer.

Despite not knowing the purpose of transfer, Chai told him that the company had sufficient funds.

Kurniawan subsequently approached Chai's subordinate Krystal See, who was the controlling manager, and told her that he needed cash urgently, said DPP Ong.

Kurniawan asked Ms See to take a loan from Wirecard Asia and not to worry about the loan repayment as it would be converted into a "bonus" for her.

Chai was then informed by Kurniawan about the S$100,000 employee loan to Ms See. Even though Chai was uncomfortable with the arrangement, she accepted Kurniawan's explanation about the loan as a "bonus "to Ms See.

Of the S$100,000, S$47,000 was transfered to Ms See's person account as an "employee loan" .

Ms See was later updated by Kurniawan of the transfer and proceeded to withdraw S$40,250 as instructed and handed it over to an unidentified man.

She also withdrew cash totalling S$3,310 through four separate transactions and passed the cash to Kurniawan. She kept the remaining S$3,440 and spent it on her personal expenses.

The loan was never converted into a bonus and it has not been repaid. 

As a result of the loan approved by Chai, Wirecard Asia suffered a loss of S$88,200.

Ms See has since repaid the sum of S$3,440 and a restitution of S$70,000 has been made by Chai to Wirecard Asia on June 13 this year.

Court documents did not elaborate if Ms See was charged for her involvement.

THE FAKE INVOICES

Between October and December 2018, Jacobson Fareast Marketing Services issued invoices to Wirecard Asia for payment of marketing intelligence reports and comments for Cambodia, Myanmar and Laos.

However, the company did not actually provide any market research reports as they are a wholesale textiles and furniture company that also traded in spare parts for heavy equipment.

On Oct 5, 2018, Kurniawan arranged for Wardhana to transfer S$41,200 from Wirecard Asia to Jacobson. 

The plan was for Jacobson's managing director Henry Yeo to withdraw and hand over S$40,000 to Wardhana on the same day.

At this point, Wardhana was unaware of the services described in the invoices between Wirecard Asia and Jacobson and had merely acted on Kurniawan's instructions, stated DPP Ong.

On Dec 20, Kurniawan and Wardhana had a discussion about an upcoming payment of S$81,370 from Wirecard Asia to Jacobson that would comprise a three per cent commission for Mr Yeo and S$79,000 that would be returned.

Kurniawan instructed Wardhana to help Mr Yeo falsify Jacobson's invoices by splitting the payment into two so that each amount would not "look big".

Wardhana then provided Mr Yeo with templates as well as required details to be included in the four invoices to be prepared.

The court heard that on the following day, Wirecard Asia's finance department made six payment requests totalling S$85,000 to seek approval for the upcoming S$81,370 payment to Jacobson.

After the payment requests were approved by Chai, Wardhana met with Mr Yeo where Mr Yeo withdrew S$79,485, which was later handed over to a man called "Ramesh".

Wardhana then informed Mr Yeo that another S$500 would be transferred as additional commission.

A total loss of S$223,070, which included the amount from his six other charges that were taken into consideration, was suffered by Wirecard Asia as a result of Wardhana's actions and no restitution was made. 

Court documents did not state if Mr Yeo was charged for his part in the scheme.

CHAI WAS 'INSTRUMENTAL' IN SCHEME: JUDGE

Speaking on behalf of their clients, defence lawyers Riko Chua Isaac and Chentil Kumar Kumarasingam both urged the court to consider a lighter sentence as Chai and Wardhana were not the "mastermind of the scheme".

Mr Isaac added that Chai had merely been acting on instructions from Kurniawan and did not stand to benefit from the scheme, while Mr Chentil argued that consideration should be given to the "control" that Kurniawan had over Wardhana.

In delivering his sentence for Chai, District Judge Soh Tze Bian said that even though restitution has been made, she was still "instrumental" in the scheme and had followed instructions when she knew Kurniawan had been dishonestly misappropriating money.

While the degree of trust is relevant for Wardhana, the judge found that the amount involved was significant and that though he was not the mastermind, Wardhana still acted as the "arms and legs" of the scheme and had been integral in instructing Mr Yeo about the fake invoices.

For committing criminal breach of trust, Chai and Wardhana could have been jailed up to seven years, or fined, or both.