Icelandic businessman hopes extradition fight leads to UK

By Guy Dixon, Reuters McCLURE, Bermuda – The Canadian businessman who has been hit with an extradition order while at the centre of a political scandal in Iceland made a bold move three years…

Icelandic businessman hopes extradition fight leads to UK

By Guy Dixon, Reuters

McCLURE, Bermuda – The Canadian businessman who has been hit with an extradition order while at the centre of a political scandal in Iceland made a bold move three years ago: buy a “financial lubricant” company offshore.

Arun’s Hedgerow Limited, filed in the British Virgin Islands in February 2013, received a treasure trove of information from a former currency trader at UBS, using the Icelandic courts.

The affair has sparked a criminal investigation by Iceland’s public prosecutor, and on Thursday a judge ordered the extradition of Arun Bjorgvinsson, 44, to face money laundering charges, for which he faces up to 16 years in prison if convicted.

The alleged fraud involved arrangements that involved a number of banks and people, including other Icelanders.

Bjorgvinsson could not be reached for comment. His lawyer declined to comment.

Prosecutors have alleged that the money laundering occurred via bank accounts and company structures set up in the British Virgin Islands, Ireland, Switzerland and the United States, while using Bermuda offshore entities as an intermediary.

Justice Court Judge Anna Polding ruled against an attempt by Bjorgvinsson to dismiss the case. He has 20 days to appeal the decision.

Bermuda public prosecutor Andrew Richmond said the case against Bjorgvinsson is complex, with large scale transactions involving many banks and connected individuals. “It takes time and complex language to explain this activity to a lay audience,” he said.

Earlier this month, Iceland’s central bank governor and police commissioner both stepped down after dealing with the fallout of the currency crisis in 2007 and 2008 that almost brought the country to its knees.

The crisis was triggered by panic over its top banks – Landsbanki, Glitnir and Kaupthing – which refused to accept the easy loan terms offered by central banks around the world.

Former UBS trader Steingrimur Sigfusson is already in Icelandic custody on allegations of currency fraud.

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