German authorities have uncovered an alleged €300-million payments fraud that has drawn in former staff and executives at several payment companies, deepening the sector’s long-running crisis years after the collapse of Wirecard, according to Bloomberg.

The case, known as “Operation Chargeback,” centers on allegations that criminal networks used stolen credit-card data to sign victims up for fake pornography, dating, and other websites, with German payment firms processing the transactions, Bloomberg said. Prosecutors in Koblenz searched more than 60 locations late last year and arrested about 20 people as part of the probe.

The investigation has focused on four German payments firms, including companies formerly tied to Wirecard, Concardis, Unzer, and Payone, now part of Worldline SA. 

The Wirecard connection runs deeper than the sector’s broader post-collapse fallout: broker Ruben Weigand allegedly linked the shuttered payments company to high-risk merchants such as porn and dating sites, former Wirecard staff are among those suspected of helping facilitate the fraud, and one of the U.S.-based networks accused of running fake subscription schemes had ties to Wirecard dating back to at least 2011, Bloomberg said. 

Former Wirecard executive Jan Marsalek also appears in documents tied to the probe and remains at large, according to the report.

The alleged scheme traces back years, Bloomberg said. Weigand’s March 2020 arrest during a stopover in Los Angeles prompted several European payment companies to review their ties to him. Later that year, KKR-backed Unzer filed the first of several suspicious activity reports to anti-money-laundering authorities.

German investigators say three networks were behind the fraudulent transactions. Two of them, identified in U.S. warrants as WebOps and FSX, allegedly used stolen card data to create more than 18 million subscriptions to fake porn or dating sites between 2016 and 2021, often charging victims small monthly sums to avoid detection. The networks are accused of operating at least 1,500 websites through more than 500 front companies, largely in the U.K. and Cyprus, Bloomberg reported.

Prosecutors suspect some staff members inside the payment firms helped facilitate the transactions. In one example, a Koblenz court ruling cited by Bloomberg said prosecutors believe a Luxembourg unit of Unzer used a “settlement solution” tool to channel funds from illicit transactions and that merchants linked to Weigand may have been exempted from risk controls. 

Read more at Bloomberg