Sunday, 7 December 2008

Stein Bagger arrested in LA

The Danish CEO of IT Factory, who committed fraud for so far US$170 ml. has been arrested in Los Angeles, USA early Saturday.

According to the Danish Police, Stein Bagger turned himself in to the LA Police.

Stein Bagger was threatened to commit crime

Stein Bagger sent information to his family claiming he had been forced to commit the crimes over the past four years, since someone was threatening his family.

"We not convinced about Stein Bagger should have been threatened to commit the crimes” says Gert Have from Danish Police to newspaper Politikken.

So who threatened Stein Bagger? Is it true? Still material for a book, TV series, Computer Game and much more. Who will buy the rights?

Friday, 5 December 2008

Stein Bagger update 3


Stain Bagger fraud US$205 million
Stein Baggers fraud in IT Factory increases to an estimated US$205 million. And more might pop up say the Lawyer who is handling the assets after IT Factory.

Stein Baggers home searched by police
The home of Stein Bagger and his wife was searched by police yesterday says Danish Newspaper Ekstra Bladet. Stein Baggers “friend” Allan Vestergaards home was searched as well. We will post a follow-up on the relationship between Allan Vestergaard and Stein Bagger later on. Allan seems to be the reason the scam fell through and is a central piece to the whole story.

Stein Bagger – call your lawyer
Per Justesen, the appointed defence lawyer asks Stein Bagger to call him. Since charges have been brought towards Stein Bagger, the defence lawyer would like Stein Bagger to contact him. But dear Stein Bagger – we know you are reading this – so why don’t you send your account of the details to us, and we will post your side of the story. (email address is listed on top of the page)

Stein Bagger in Panama?
According to Danish Newspapers Stein Bagger might be in Panama. Travel records suggest it. But now the arrest warrant is out, travel will be a lot harder. We guess Stein Bagger has backup travel papers, but maybe they are with a little different looking Stein Bagger. So maybe Stein Bagger is staying below the radar until he has grown some facial hair and if he can – some more “top” hair. J

Thursday, 4 December 2008

Stein Bagger accused of $170 ml fraud


Danish Police have officially indicted Stein Bagger for fraud for about US$170 million. The US$170 million is based on advanced leasing scam, apparently run by Mr. Bagger and multiple international companies. Mr. Stein Bagger was CEO of Danish IT Cometh IT Factory.

This now means the Police can put out an International arrest warrant. To top the charges the Danish Tax department was investigating a sales tax fraud case him for about US$3.4 million. The tax fraud alone can get Mr. Bagger a jail sentence of about 8 years alone.

IBM is among the latest to disclose they have been swindled for US$25 million by IT Factory. IT Factory owes IBM for about US$9 million in software licenses and US$16 million in “Other products”

Hewlett Packard has disclosed outstanding dept from IT Factory to the region of US$5.4 million.

The future does not look so bright for Mr. Bagger.

The other Investors behind IT Factory are in a state of disbelief, since their holding company (JMI Invest) and other companies JMI have invested in, are now hit by the banks closing outstanding dept for every associated company.

JMI Invest have borrowed money against the apparently valuable shares of IT Factory. Now that the shares of IT Factory does not have any value, the banks are looking to get coverage for as much as possible, as quickly as possible to minimize the total loss in IT Factory.

It is a shame that hits some of the other investments JMI Invest have.

Wednesday, 3 December 2008

Stein Bagger updates


The mystery about Stein Bagger is still unfolding.

Here is a list of recent updates

  • The defrauded amount can be up to US$170 million and not US$100 million as reported earlier.
  • Danske Bank (Big Danish Bank) admits to having leasing agreements with “IT Factory” for US$60ml, most of which are made in 2008. The underlying assets seem not to exist.
  • Nordea Bank has leasing agreements worth US$3.5 ml.
  • Danish Hells Angels member Brian Sandberg has been employed by IT Factory and Stein Bagger for the last 12 months as “Security Consultant” guarding Stein Bagger and IT Factory. Brian Sandberg spoke to Stein Bagger just before he left to Dubai on Nov. 26th.
  • Stein Bagger owned 50% of IT Factory through an offshore holding company called Agios United. Everyone thought Aigos United was a 100% Stein Bagger Company, until this week where shareholders in IT Factory learned that Allan Vestergaard was a partner in the Agios United holding company
  • Allan Vestergaard was attacked last week by unknown persons. It seems to have some relation to the case. Allan Vestergaard then called the Chairman of the board of IT Factory and that started the ball rolling. The Chairman did not know Allan Vestergaard was a partner, and hurried to Denmark and hired a bodyguard.
  • The leasing fraud was based on Company X sending IT Factory an invoice for computer products for fx. US$10 ml. Then IT Factory went to a bank and got it financed. Then the bank paid company X. Thereafter IT Factory invoiced Company X for US$3 ml for “Software Licenses”, which company X then paid. That left enough cash in IT Factory to pay the outstanding leasing obligations and showed “software revenue”
  • Stein Bagger claimed that he had a Phd and an MBA. The MBA was according to Edinburgh Business School never completed. The Phd seems to be fake as well. It was “issued” from “SFTU” which according to Stein Bagger was “San Francisco Technical University” a University no one can find...

Tuesday, 2 December 2008

Scandinavian CEO elopes after US$100 million fraud in IT company

Case ties in with former Gizmondo CEO and convicted criminal Carl Freer & Mikael P. Ljungman and creates a big black eye to Ernst & Young who 1 week before applauded the CEOs company as best of the best..

Danish IT Company “IT Factory” has been hailed as the “Success of Successes” companies in the Danish IT sector. Lead by charismatic CEO of Norwegian descent, Stein Bagger, the company had an estimated net worth of US$ 1.5 billion – until this Friday. Now it is bankrupt.

IT Factory CEO elopes from Dubai
On a pleasure trip to Dubai in the United Arab Emirates with his wife, IT Factory CEO Stein Bagger suddenly disappeared this Thursday and became impossible to reach. His wife since 2003 started a search together with the Danish Consulate in the UAE, only to discover that the husband left from Abu Dhabi airport at 03.00 am the night to Friday.

Then things started to unfold very quickly. First it turns out that the missing CEO Stein Bagger rented a little office, close to the main office of IT Factory. From there it seems he had been running his “fraudulent” part of the business, issuing purchase orders with forged signatures to IT Factory, managed an advanced leasing scam, forging the Chairman of the Boards signatures and much more.

In a statement to the Danish Press, the Chairman of IT Factory claims the total embezzlement is in the region of US$ 100 million, and had taken place over several years.

The link to criminal Carl Freer
The Danish version of IDG Computerworld had 3 weeks before started to dig into the true story behind the apparent success of IT Factory. They dug out that some of the clients and resellers listed on IT Factory’s homepage was not all what they seemed to be.

Some clients denied ever buying software from IT Factory. Other dealers said they did not know why they was listed as dealers on the website. Others had asked to be removed a long time ago as references.

And suddenly – two of the very big reference names strike the Computerworld Denmark guys as strange. Media Power Inc and eCommerce LLC. Both companies controlled by Mikael P. Ljungman and founded by Carl Freer. (website

Confronted with the dud references, CEO Stein Bagger said “We do not check the background of the people behind eCommerce LLC and Media Power Inc. As long as the behave nice we will keep them on as dealers”

And they Black Eye go to... (drum roll) Ernst and Young
Ernst & Young evaluated IT Factory and did not find anything but “greatness” – they looked through the 2007 accounts and could not find any cause to doubt the figures. They had hour long interviews with the now missing CEO without spotting any wrong doing. And even after IT Blogger Dorthe Toft had pointed out some suspect issues in the Danish press about IT Factory, Ernst and Young “double checked” again 2 weeks ago – and that did not lead to any changes of heart about giving IT Factory the Danish version of the price: “Ernst & Young Entrepreneur Of The Year®”

Black Eye runners up are Danish Computerworld who gave IT Factory 2 consecutive prices as “Best of IT” – before they started digging up the nasty stuff. But Computerworld was also part of showing the real "IT Factory" so they should be excused a bit for their part of scam boosting.

3rd Black Eye runner up is the IT Factory audit company … “KPMG Denmark” who have not been able to find anything wrong with companies accounts the last few years.

The recap
So the CEO is missing. IT Factory is missing US$100 million and is bankrupt, with 115 jobs lost. Newspapers in Denmark are full of stories about the missing guy and the fraud. Now the “former” CEO, who is a former body builder, is tied to Carl Freer and whispers from Danish police even mention Hells Angels relations. So was this planned? Was it all just a gigantic fraud from the beginning or was it a CEO trying to boost his ego by committing fraud. Only the future will tell – if he ever gets found.

In any case – this is material for a book and a Hollywood movie deal. Real life often surpasses what fiction writers can dream up. Maybe this will become a feature on CSI Miami – all we need now is a murder and the story is worth a lot of dollars. May I suggest that the remains after IT Factory gets a revenue share deal?


about the bankruptcy and CEO (in Danish)

IT Factory bankrupt and CEO is on the run
Danish Computerworld articles about IT Factory’s collapse

About Carl Freer

2nd Arrest Made in Ferrari Case
Gizmondo's Spectacular Crack-up