Special prosecutor charges ex-Reykjavík Energy manager with fraud

Iceland’s special prosecutor into the banking crisis has laid charges against Reykjavík Energy’s former horticultural department manager for embezzlement.

The former manager is accused of taking ISK 26 million (EUR 164,000) from the publicly-owned company and he faces up to six years in prison.

According to the charges, which were handed to the defendant just before the new year, the deductions began in November 2003 and carried on until September 2008. The accused was at the time manager of the Reykjavík Energy horticulture department; which deals with selling heat and electricity to geothermal greenhouse operators.

The former horticulture manager is accused of having given out 58 ungrounded invoices over the five year period. In many cases he is accused of personally producing documentation, receiving the invoices and granting payment on behalf of Reykjavík Energy.

He is not, however, accused of stealing the money for his own use. During most of the five year period in question, the manager was also the chairman of the Icelandic Horticulturists’ Association and the money he took, according to the charge sheet, was used to pay the wages of two women who were employed as directors of the horticulturists’ association. One of them received ISK 11 million of the money between 2003 and 2005; while the other got ISK 14 million between 2006 and 2008. Neither of the women is accused of any wrongdoing, RÚV reports.

The man in question was sacked from his job in autumn 2008, when the case first came to the attention of police. The case later transferred to the special prosecutor when his office merged with the police economic crimes unit.

Reykjavík Energy is demanding all the money back from the accused, with interest; while the special prosecutor is calling on the courts to make him pay all legal costs and serve up to six years in gaol, if found guilty.

Reykjavík Energy is deeply indebted and needed to be bailed out by the City of Reykjavík. It is a private company whose shares are entirely owned by local governments (mostly the City of Reykjavík). Its mandate is to serve the people of the capital region; but it was liberalised by politicians to such an extent that it was able to participate fully in the speculative investment and borrowing of the boom years, fully backed by an unsuspecting public. More on that story here and here.