Last September, Danish Computerworld awarded IT Factory, a provider of CRM, HRM and Business Intelligence add-on solutions based on a SaaS delivery model, with the prestigious “Denmark’s Best IT-company 2008″. This week, the company has been declared bankrupt and its managing director Stein Bagger went missing in Dubai while under scrutiny by the police and Interpol.
Update: Bagger was arrested in California December 6, more information here.
The remarkable story is all over the Danish press but has remained largely unnoticed outside of the country so far.
Stein Bagger apparently got his hands really dirty: he’s wanted by the Danish police by Interpol for financial fraud and a possible link to an assault on a business man (alledgedly executed by members of the Hell’s Angels, a group he was connected to somehow, but that’s not sure), although charges haven’t been pressed so far. Nobody has seen Bagger since last Thursday, when he disappeared somewhere in Dubai, where he was attending a business conference in the company of his wife and child (his wife is also the one who reported his disappearance).
The Danish press dug up his background after Computerworld did some research together with blogger Dorte Toft in the context of the award that was handed out to IT Factory a couple of weeks ago, and it turns out Bagger has connections to two Swedish business men (Carl Freer and Mikael P. Ljungman), who have been both convicted of fraud in the past. Further investigation is still being carried out.
Reporters also found out Bagger had been renting a secret office in a conference hotel since two weeks near the IT Factory offices, which he reportedly used to forge documents and signatures in order to keep the massive-scale fraud going (it concerns about half a billion Danish Kroner or $85 million). Overall, sources assess that up to 90 percent of IT Factory’s turnover had been based on non-existing or false contracts. There’s also talk of a scam where non-existing IT equipment and other stuff was sold to leasing firms, and the cash was sent off to shady offshore companies.
The fraud scandal has many corporations and banks in Denmark licking their wounds. One of the victims is international cycling team CSC-Saxo Bank, led by Bjarne Riis, who counted on IT Factory as one of their main sponsors.
Most of the information above comes from a tipster and translated versions of Danish articles. We’ll update this post whenever we get more information.
One minor detail: currently Mr Bagger is only (!) wanted by Interpol as a missing person – the financial fraud is still to be investigated and formal charged.
That’s not good for Loopt. They employed some 200 foreigners to poorly program their social networking service.
Sam (my inflection rises–not falls like most grown ups) Altman has got to be very pissed off. Which means every dog within a 5 mile region will hear his high pitched shreaks of anger and 22 year-old outrage.
That’s what happens when Richie Cunningham runs a $15 million start up.
yet another instance in which it seems bank reconciliation was necessary. contracts are great, and revenue too, but where’s the cash ?? nobody seems to ever ask that question…
http://www.mark...8604861C8DD8%7D
It was the Danish blogger Dorte Toft, that first noticed that It-factory had some issues with their business model http://bizzen.b...st-af-interpol/
Stein Bagger succeeded in keeping his fraudulent business hidden from a well know accounting firm, and a you mention, winning a price for best IT business
If you haven’t read the Danish writer Hans Christian Andersen’s “Emperor’s new clothes”, now is the time to do it. It is Enron all over again!
Let’s give credit where it’s due – Enron was accounting fraud on a MUCH larger scale than this. Enron was a huge, billion dollar company.
not a secret office anymore i guess lol
Every bubble that bursts generates its share of shady bankruptcies. Remember Lernout & Hauspie, anyone?
http://en.wikip...t_&_Hauspie
What about DEN? http://en.wikip...ainment_Network
Yikes…gotta love scamtastic (Hollywood Movie) nature of this fraud. Seems to be almost Crazy Eddie like in its audacity. Hope they catch the guy in Dubai.
So probably the next ‘prestigious’ award would go to Wipro (already on the brink of disaster)?
The curse of Gizmondo seems to have its tentacles spread far and wide.
Hrm, Swedish mafia. Dollars to donuts Stefan Eriksson of the Media Power Group is somehow involved in this
This is no different to all the other shady businesses made by example Franco Fedeli and his crew in the Nordics. Remember Icon Medialab, Core Venture and now the airline FlyMe. They cleaned the company on every asset it ever had and moved the money off-shore. They were getting both board renumerations, salaries and using their own consulting companies. And what does the Swedish Government do. The right answer is NOTHING.
I know this is a tech blog, but unless you’re talking about Digg, the word “dug” is spelled with a single ‘g.’
And since when do people who commit fraud receive the label “fraudsters”? It sounds like a new social networking service for former CEO’s of bankrupted companies.
Hehe, http://www.fraudster.com/
Fixed both, thx.
Where is Richie Cunningham going to do now?
Aw Mom.
wow the drama does not get much better than this. is denmark part of poland or somewhere near it? im trying to make sense of all this.
BikerLocator.com – hell on 2 wheels
No we’re not a part on Poland. Far from.
Denmark is a country located in Nothern Europe. We’re a part of Scandinavia and a member of EU.
More here: http://en.wikip...rg/wiki/Denmark
LOL you are a moron Locator.
Stein Bagger, IT-Factory CEO, was connected to Hells Angels because he had an HA-rocker on payroll – hired as a “security-consultant”.
General english article here: http://politike...ticle606159.ece
Or you can use google translate on http://business.dk http://borsen.dk or http://epn.dk – the three top financial-sites in Denmark.
Danske Bank (biggest bank in Denmark) has lost 350 mio DKK or aprox $60 mio. http://politike...ticle606378.ece (in danish)
Furthermore on the story – it’s come to show, that Stein Bagger lied about his education-credentials. He claimed he had an MBA from Scotland, but that’s not true.
Was the award the OPM Leasing Services, Inc. award?
http://law.gsu....PR/OPM-End.html
err, and first: http://law.gsu....gham/PR/OPM.htm
can anyone understand these comments?
Do they have running water in Denmark? Since the Danes are neighbouring Dubai..he probably just had to cross the border to disappear. He probably got sick and tired of all the muslims in his country.
that is just pathetic Duude… or should I say Reetaard!
Dude,
That is just totally flubbed up. Tired of muslims so go to the United Friggin Arab Emirates (no muslims there I presume).
Dumbarse…
He is charged for around $130 million. It is a lot of money..
Today it was also revealed that it was the chairman of the board of IT-factory that was tipped off because a man he never had met, claimed to be partner with Stein Bagger, that man also had a violent assult by creepy people a couple of nights ago – it gets weirder by the minute, but that was how they found out that something wheren’t smelling right in the kitchen
Carl Freer was a part of Gizmondo right?
Gizmondo had their share of crooks and Hell Angels as well.
Dig this! http://www.business.dk is reporting hits from a single IP address originating from the Bahamas… Could it really be…?
they were talking about this fall in 2007
http://www.iamlittle.net
Well not only did they win the Danish Computerworld awarded. But the they also won ( And now lost ) the even more prestigious Ernst & Young’s Entrepreneur Of The Year. I really don’t think that it where that they had in mind when they called him an Entrepreneur ;P – Link: http://translat...sl=da&tl=en
yeah tells you a lot about the ernst & young award… they are full of it as much as this danish guy.. sorry if that award would mean anything they’d at least do some basic research
There are numerous factual errors in this story. Here’s a summary of the events as of Tuesday: http://www.info...disappears.html
Also IT Factory was given the mentioned award in September – not last week. The award was based on independently audited financial reports – based on numbers that now appear to have been falsified.
Finally you should note that Computerworld Denmark has worked closely with Danish IT journalist and blogger Dorte Toft in this investigation: http://bizzen.b...gs.business.dk/
Best regards
Jens Møller Nielsen
Computerworld Denmark
Wow.
Another error.
As far as I am concerned (and I have been following the news about this pretty close), there are still no reports on Heels angels executing the assault, but the one who got assaulted says that when he was assaulted, the people executing told him that they were some of Stein Baggers friends…
…far fetched, eh?
This is some crazy stuff.
“Carl Freer was a part of Gizmondo right?”
Yes.
To those who do not know what Denmark is:
http://en.wikip...rg/wiki/Denmark
Stein Bagger is now officially charged for fraud and forgery worth over $150 million!
He is now wanted by the Danish police.
Oh yeah and I nearly forgot: You can now play Stein Bagger – The Match Game.
http://www.steinbagger.dk/
This article is based on hear-say events. What about 500-700+ employees wirking with IT factory and a number of associates. They were directly associated with clients, client engagement activities, software development and collection of bills. So all of it mentioned in the write-up is not true.
I am sure there is a money spinoff from the IT factory accounts.
These days media print/TV/web love to spice-up the story so that circulation or eye ball views or clicks increase.