After 291 trial days, the criminal proceedings before the Landgericht München I (Munich I Regional Court) (Az. 4 KLs 402Js 108194/22, case no. 4 KLs 402Js 108194/22) appear to be entering their final phase. The trial of the former chairman of the management board of an insolvent German payment services provider and two co-defendants has been ongoing since December 8, 2022. No decision has yet been handed down; all defendants continue to be presumed innocent.
Deadline for Final Motions to Take Evidence
The court has given defense counsel until November 26, 2026, to submit further motions to take evidence. The competent criminal division considers the taking of evidence envisaged by the court ex officio to have been concluded.
Six Trial Days for Closing Arguments
Provided there are no further delays, the proceedings are then to continue with the following steps:
- First, the public prosecution and the defense are to deliver their closing arguments.
- The three defendants will then be given an opportunity to make their final statements pursuant to § 258 StPO (German Code of Criminal Procedure).
- A total of six additional trial days has been scheduled for these stages.
This means that a judgment could, in principle, still be delivered before Christmas. This would be shortly after the fourth anniversary of the start of the trial. However, the presiding judge pointed out that the schedule would already be tight if all of the designated days were required for the closing arguments.
Requirements for the Date of Delivery of the Judgment
As a rule, the judgment is delivered after the conclusion of the trial and the court’s subsequent deliberations. The criminal division may also schedule a separate date for this purpose. Under § 268(3) StPO, this date may generally be no later than two weeks after the close of the trial.
Subject Matter of the Criminal Proceedings Against the Payment Services Provider’s Former Managers
The payment services provider filed for insolvency in June 2020. This was triggered by the fact that reported cash balances amounting to EUR 1.7 billion could not be located. To date, the insolvency administrator has found no trace of the funds recorded in the accounts.
The public prosecution accuses the three former managers of offenses including falsification of accounts, organized commercial fraud, market manipulation, and breach of trust. According to the indictment, non-existent revenue was allegedly included in the financial statements over a period of several years in order to deceive lending banks. The public prosecution estimates the resulting losses at EUR 3 billion.
The transactions alleged by the prosecution to have been fictitious were reportedly recorded primarily through three third-party partner companies in Singapore, Dubai, and the Philippines. The trial is being held in an underground high-security courtroom on the premises of the Justizvollzugsanstalt München-Stadelheim (Munich-Stadelheim correctional facility).
Defendants Give Differing Accounts
The defendants’ positions differ on key points. While one co-defendant largely confirms the public prosecution’s account, the former chairman of the management board denies the allegations against him.
Former Dubai Manager Confirms Key Allegations
The co-defendant who formerly worked for the company in Dubai has confirmed the public prosecution’s assumptions on the key points. Before the deadline was announced, he described the company’s reported figures as “synthetic fictions.”
Former Chairman of the Management Board Denies the Allegations
The former chairman of the management board has been held in pretrial detention for more than six years. Since the trial began, he has denied all allegations and stated that he had assumed the billions reported in the accounts actually existed.
When the court put it to him that his account was not plausible, he responded that he was not proposing theories. According to his testimony, the underlying transactions were genuine. However, he alleged that the profits generated from them had been misappropriated by the former chief sales officer, who has been a fugitive since 2020, the co-defendant who formerly served as the Dubai manager, and other individuals involved. The former chairman of the management board also pointed out that he had invested a very large portion of his assets in the company’s shares.
Whether and to what extent the allegations in the indictment are substantiated remains subject to the Landgericht München I’s final assessment of all the evidence. Until a decision is rendered, the allegations must not be treated as proven.
Significance of the Imminent Final Phase
With the expiry of the deadline for further motions to take evidence, one of Germany’s most extensive white-collar criminal proceedings is approaching a possible conclusion. Nevertheless, the further timetable will depend on whether additional motions are filed and whether they result in the taking of further evidence or other delays.
Companies, members of corporate bodies, investors, and high-net-worth individuals may require an assessment tailored to their circumstances when facing comparable issues involving criminal and commercial law. MTR Legal assists affected parties by providing legal advice on white-collar criminal law.
