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Bagger surrenders in Los Angeles

by VeloNews.com

• December 07, 2008
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Bagger surrenders in Los Angeles

Photo: Agence France Presse

“I’m Stein Bagger,” the well-dressed man told the desk sergeant at a Los Angeles police station on Saturday. “I’m a fugitive from Europe and I’m here to turn myself in.”

Understandably skeptical, police at the substation near the city’s toughest neighborhood initially assumed the man with a noticeable accent was somehow delusional.

“We’ve had several people come in and tell us they were the king of Denmark,” Officer Jack Richter told the Los Angeles Times.

But further questioning and a computer search revealed that the man who strode into the station after a cross-country trip in a friend’s borrowed car was indeed Bagger, who has been the subject of a world-wide manhunt and the central suspect in the collapse of the Danish software giant IT Factory.

In a December 1 press conference, company IT Factory chairman Asger Jensby announced the company had filed for bankruptcy and contacted police on suspicion that company CEO, Stein Bagger, had stolen at least $85 million from the company. That figure has since been adjusted upward and may be as large as $170 million.

The collapse had an immediate effect on financial markets in Denmark and clouded the future of the country’s only ProTour cycling team, since IT Factory had signed on to be the co-sponsor of Bjarne Riis’s Saxo Bank squad, the team previously known as CSC.

Bagger had vanished during a trip to Dubai, in the United Arab Emirates, on November 27 and had not been heard from until he turned himself in to police in Los Angeles.

Upon Bagger’s disappearance, police and company officials launched an investigation that revealed that virtually all of the company’s projected 2008 revenues were based on based on fraud. The company revised its projected $60 million profit and immediately sought bankruptcy protection in Danish courts. Investigators even found a dummy office for one of IT Factory’s biggest “customers” at a nearby hotel. The scam reportedly involved the resale of fake contracts to banks and other investors.

Bagger’s guidance of the company even prompted the international accounting firm Ernst & Young to name him “Danish Entrepreneur of the Year,” a distinction that has since been withdrawn.

The fallout left cycling’s No. 1 ProTour squad in dire straits, but Riis assured fans that the team will be able to continue and began a hunt for a new co-sponsor.

“We’re working with Saxo Bank to find solutions and a new sponsor,” he said. “We’ve had a meeting with the cyclists and we’ve assured them that the team will continue.”

Los Angeles police, meanwhile, said that Bagger has claimed that he was the victim of a conspiracy and that he is not guilty of fraud. He is expected to be returned to Denmark to face charges of counterfeiting, forgery and fraud.

The case has generated considerable press in Denmark, with wide-spread speculation that the 41-year-old Bagger had banked millions and would spend the rest of his days relaxing on an isolated beach in a country with no extradition treaties. The hunt even led one creative Internet entrepreneur to register the domain www.steinbagger.com and post a simple on-line game challenging web surfers to “find Stein.”