One of the four Icelandic men suspected of large scale illegal currency speculation, the investor Gisli Reynisson, is in the process of building a massive new house near Reykjavik.
The unfinished house is nearly 500 square metres in size, with the garage alone coming in at around 50 square metres. At the same time, the investigation by the Icelandic police financial crimes unit is in full swing, DV reports.
Reynisson and his wife invested in the plot in the Reykjavik suburb of Gardabaer in April 2008, but plans for the luxury house floundered at the time of the banking collapse in autumn 2008. However, construction has gone ahead full steam over the last year.
The site is teeming with workmen today and will be worth at least ISK 150 million (USD 1.2 million) upon completion.
Reynisson’s legal registered address is in the UK, as are the addresses of the other three men arrested in the police investigation: Karl Love Johannesson, Markus Mani Michaelsson and Olafur Sigmundsson.
The men are suspected of having broken Iceland’s currency exchange rules in speculative trade through the Swedish firm Aserta. The company’s illegal currecny trade is thought to be in the region of ISK 13 billion.
The four men’s assets have been frozen, meaning the Gardabaer house cannot be used as security or sold, but construction work continues. Police detective Helgi Magnus Gunnarsson would not discuss the case in detail but said that an investigation of this scale does not take place without significant evidence already having been amassed.
Read an older article on this issue here
This article clears up any confusion that might arise from there being two Gisli Reynissons (well, after that recent Bjarni thing, I’m sure there are more, but you know what I mean :) ):
http://icelandtalks.net/?p=882
To put this 13bn in context, that’s about 75m euros. But that’s presumably the amount traded, not the illicit profit made.
It’s old data, but then I suppose that might more accurately reflect the time period that we’re dealing with. Onshore ISK:EUR rate ~170, offshore ~215.
http://www.bonds.is/assets/files/islb66.htm
So the difference is about 15m euros. Still good money, but not as impressive a figure as 13bn.
The Icelandic economy is obviously improving.
This is strange but true. Hoping that the investigation will soon be over and the hands of the law will be in action and justice will prevail. Most welcome and awaited event since the collapsed of the banks. Please do not forget the interest. No friends and favours. How about the rest ? Where are they ?
Such stuff always happens when the exchange rate of a currency is determined by the government, and not by supply and demand. Black markets emerge, and the smuggling of foreign currencies becomes lucrative. As Bromley showed, there’s a nice arbitrage profit in this “business”. However, with all those laws and surveillance targetting money laundering in place everyhwere, I wonder how the crooks intended to get away with this on such a grand scale?
Good that they were caught. Because, don’t forget, they’re actually stealing money from the government, which is spending huge amounts to stabilize the ISK. Their millions come from the Icelandic taxpayers! Those *******s deserve to be tarred and feathered.
Gray, Germany says:
“which is spending huge amounts to stabilize the ISK”
If this is a fact, where do get the information that the Icelandic state is spending huge amounts to stabilize the Iskr?
If this is a fact, where do get the information that the Icelandic state is spending huge amounts to stabilize the Iskr?
Good point. It’s probably more accurate to say that the Icelandic government will likely have to spend huge amounts of money to stabalise the currency. Currently it’s the (honest) exporters that are subsidising the support of the currency, with the government presumably covering the difference if it’s negative (which I believe it isn’t).
“If this is a fact, where do get the information that the Icelandic state is spending huge amounts to stabilize the Iskr?”
Well the ISK is not a free floating currency, the
“If this is a fact, where do get the information that the Icelandic state is spending huge amounts to stabilize the Iskr?”
Well the exchange controls are a tax on exporters to keep the ISK artificially high – so its exporters who are paying for it, not the state. Very unfair, as the fishermen would have gained least from the banking industry making their exports expensive and they are now expected to pay to repair the ensuing mess.
Peter -London says:
March 23, 2010 at 9:41 pm
“Well the exchange controls are a tax on exporters to keep the ISK artificially high – so its exporters who are paying for it, not the state. Very unfair, as the fishermen would have gained least from the banking industry making their exports expensive and they are now expected to pay to repair the ensuing mess.”
Is that a reply to my question?
Exports are sold to a foreign market at foreign currency prices. Those prices are dictated by the foreign market, not by the value of Iskr. How on earth do the exports become more expensive with local currency controls in place?
The foreign currency, earned from exports, by law should be banked in Iceland/converted to Iskr. Have you determined with some research that the fish exports at present are less profitable than before 2008? That the fish exporters are suffering more than others?
Or do you say they are suffering because they could make more profit if there were no currency controls and were allowed to bank their proceeds abroad?
Either way it is irrelevant to my question, is not the answer to my question in the accounts of the Central Bank?
“Or do you say they are suffering because they could make more profit if there were no currency controls and were allowed to bank their proceeds abroad?”
Yes, obviously if they could sell for Euro’s and convert at the open market exchange rate they would get twice the ISK for their fish sold. So the government is taxing them by setting a artificial exchange rate and forcing them to buy ISK at this rate.
Hope the truth is found. Of course, innocent until proven guilty. But if he is proven guilty, I hope they throw the book at him.
I’m glad the assets have been frozen.. if the investigation proves charges are warranted, I hope the trial is fair and that justice is served and the facts are presented. Let the jury decide if it gets that far
Of course, innocent until proven guilty. If he is proven guilty, I hope they throw the book at him. Hope the truth will be found.
One point to add to what Brumley did say here, the biggest export of that year for Iceland was aluminium and then fish.
( Most of the exports of aluminium went to companies in Holland. But no doubt go to other locations for use. )
Easy billionaires! Glad that their assets are frozen, ’til they are proven guilty of course. I hope that the truth will come out… hope to hear the progress of this case.
I guess they’re confident that they won’t be proven guilty. People should still be assuming they’re innocent anywway but surely they wouldn’t be allowing construction to continue if they know they’ve done wrong and their assets have been frozen?
With exchange rates and money to be made we will always find that someone trys to make an illegal gain. Hope they get found guility and the law wins the day to set an example.
Interesting! In my country if assets are frozen that would mean there would be no funds available to complete to the building. How does this work in this country? I am confused to how he could fund the building and stand to profit once the charges have been dealt with.
Well, that might be a case of having laws, but applying them subjectively, depending on family/political connections. Its called corruption in your country.
He who has the gold makes the rules, I suppose. Life…
This content is largely a piece that is sensationalised. Firstly, the person who has bought the property is a suspect and not proven guilty of the charge.
To ensure the human rights of all, we must uphold the basic principles of law, that is, a person is not guilty unless proven in front of the law of court. Equally, the pscyhological message to the readers is somewhat concerning, it is misleading as the judgment has been sown without evidence and outcome through the judicial system.