1. November 2016–
For several weeks the digital-bank WB21 and its founder, Michael Gastauer, have been making headlines.
Articles posted on Forbes and Business Insider have referred to Gastauer as a finance genius for plans to sell his startup on the market for 2.2 billion dollars by 2020. He is currently looking for investors to make it happen.
Gastauer also made headlines when he recently announced that the company’s new European headquarters will be in Berlin, not London, while staying at Berlin’s luxurious Hotel Aldon.
Gastauer promised 200 new jobs for Berlin, 50 million euros (55.7 million USD) in investments and was welcomed to the capital with open arms by Hans Reckers, currently Berlin’s Permanent Secretary and former head of the Bundesbank, Germany’s Federal Bank.
However, these numbers don’t add up. And further documents, including court documents, acquired by the German online magazine Gruenderszene, show that Michael Gastauer has a long history of dubious tendencies. The 42-year-old declined to provide comments, but made clear his lawyers are standing by to take legal action if anything is published.
Embezzlement, Tax Fraud and Forgery
The more closely one looks at Gastauer’s web of companies, the more disconcerting it becomes. Roughly half a dozen different companies can be found filed under his name in Switzerland, London, the British Virgin Islands and Singapore. Many of them have filed for bankruptcy in recent years.
Gastauer’s past is filled with embezzlement, unauthorized purchases of weapons, tax fraud and forgery. His story is one of commercial fraud on a grand scale.
Two of Gastauer’s companies play a particularly important role in understanding the extent of his deceit: G & S Asset Management and Apax Global Payment.
In 1998 Gastauer founded G&S. A little later Peter Zimmermann, the main shareholder of the investment company Realtos, hopped on board. Zimmermann transferred 200,000 of Realtos’ shares to G&S, only for Gastauer to go behind his back and embezzle 60,000 shares, Realtos said.
During this time press releases were promoting G&S’s success: The company is managing 1.4 billion francs (1.3 billion euro) worth of customer assets and making a profit of over 10 million francs per year. These successes attracted more investors.
Before long, the Zurich-based financial company Baklin, and the well-known, Swiss businessman, Dieter Behring, are also involved with G&S. In 2003, Behring transferred a total of 16.3 million Swiss francs to the seemingly successful asset management company.
Fast forward to 2016: Behring is found guilty and sentenced to more than five years in prison in one of Switzerland’s largest fraud cases.
As cunning as Behring was he still fell prey to Gastaur. In 2004, a year after transferring the money to G&S, Behring filed charges.
That same year G&S files for bankruptcy. Court records show that Gastauer was investigated for one and a half months. He denied this. His business partner, Zimmermann, was also under investigation until committing suicide in November of 2004.
Court documents: “A shameless parasite”
In 2009, Gastauer was called before the Swiss court. The court documents acquired by Gruenderszene show the court attested that Gastauer’s acts of fraud were “extremely professional and done with an intentional approach.” The acts required “substantial criminal energy,” the court documents said.
The court called him a “shameless parasite,” who regardless of the expense to others was “only concerned about his own personal benefit.” In addition to facing fraud allegations, Gastauer was also held accountable for the repeated purchase of illegal firearms, including a Mossberg shotgun.
Gastauer denied this as well.
Other court documents, in which Gastauer injured a police officer during a car accident, state that Gastauer has an “extremely reckless” manner and does not care about danger posed to others. The incident would have been much worse had the police officer not been able to prevent the situation from escalating.
In 2010, the Swiss court sentenced Gastauer to 18 months in prison, one month more than the prosecutor’s office was pushing for, on counts of commercial fraud, false accusations and counterfeiting.
It took the prosecutor’s office more than three years to prepare the accusations. Too long, according to the court, who barred some of the allegations, like the illegal weapons charge.
Gastauer pleaded guilty to some of the charges and the court confiscated more than one million euros from multiple accounts under Gastauer’s name or from G & S to compensate creditors.
A drop in the bucket compared to the court estimates that state the loss incurred was around 20 million Swiss francs.
But that’s not where it ends. During this time, Gastauer founded another company: Apax Global Payment. Gastauer told Gruenderszene that he sold the company in 2008 to the Malaysian banking group, CIMB, for 480 million dollars.
However, the deal cannot be found in CIMB’s annual financial report and the Financial Times blog Alphaville quotes a CIMB spokesperson saying the deal never took place.
Gastauer told Gruenderszene that these 480 million dollars are where he got the 22 million euro used to finance WB21, his newest startup. The same startup that he is hoping to secure investors for and that he claims acquired a remarkable one million customers in only ten months.
Adding to these massive inconsistencies are smaller incidents, which all paint Gastauer in an unflattering light.
A deleted Wikipedia page
Adding to these massive inconsistencies are smaller incidents, like the entrepreneur's Wikipedia page. The entry, which was recently updated with unflattering information by Wikipedia contributors using reports published by Sueddeutscher Zeitung, Alphaville and Gruenderszene, was deleted. The reason? The sources are apparently not credible enough.
One Wikipedia contributor wrote that four “paid contributors” are constantly trying to “whitewash” and “promote” Gastauer’s page so that it comes across better. When confronted by Gruenderszene, Gastauer denied hiring contributors.
But frankly a deleted Wikipedia entry is hardly enough to restore Gastauer’s and WB21’s reputation. The real question now is whether WB21 will crumble beneath the weight of his fraudulent history or go on to secure the 200 million dollars in investment capital as he previously planned.
This article was originally published on Gründerszene.