Tuesday, December 16, 2008

Fakin' it: IT Factory's Stein Bagger, fooled banks, KPMG, Deloitte, and Ernst & Young

There has been quite a bit of discussion about the concept of trust in the financial world. As the world-wide economy continues to struggle, the fakes are like cockroaches scurrying about to get out of the light.

A recent article in the Wall Street Journal reveals that Denmark's Entrepreneur of the Year, Stein Bagger, was a fake. Bagger's "fake" company, IT Factory, was audited by Deloitte, and later KPMG, and even was named as IBM's Best Partner for software. According to the article, Bagger's company owes IBM about $23 million dollars.
Danske Bank may be out $64 million.

Bagger's academic credentials were fake, too. Apparently he hired an artist/actress to "play the role of an official at San Francisco State University, and institution that does not exist", just in case anyone became suspicious.

"The gist of the allegations is that Mr. Bagger used a web of phantom firms to get money from banks and then used these same companies to place big purchase orders for IT Factory software and services. He was buying from himself using other people's money."

For Denmark's Entrepreneur of Year, Something Was Rotten: Stein Bagger Pleads Guilty to Faking Software Deals; His Ph.D. Was Phony, Too. -Andrew Higgins, WSJ 9/17/08
Emails From Bo Svensson to IBM Management
Email to Actress Hired to Play Role of University Official

One good thing about the struggling economy is that the cockroaches will have nowhere to hide when their houses of cards tumble down around them!


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