Where In The World Is IT Factory's Stein Bagger?

IT Factory CEO Stein Bagger reportedly disappeared last week during a combined business/leisure trip with his wife to Dubai, United Arab Emirates.



In early December, Bagger was officially charged by Danish authorities in a $170 million fraud and forgery case stemming from falsified leasing contracts. The move opens the door to an international arrest warrant.

According to one report, IBM has disclosed that it's on the hook for $25 million in unpaid IT Factory accounts, including $9 million in software licenses and the remainder in unspecified "other products".





While $25 million isn't going to break the bank for Big Blue, if true, the news probably couldn't come at a worse time. An IBM representative contacted by ChannelWeb didn't respond to a request for comment.

According to a Thursday report in the Nassau, Bahamas-based Freeport News, there's no truth to rumors that Bagger has been hiding out at a local resort.

Until recently, Bagger had been credited with steering IT factory through an incredible turnaround. Ernst & Young Denmark on Nov.27 named Bagger its "Entrepreneur Of The Year," but on Monday revoked the award. IBM Denmark last December named IT Factory as its top SaaS Partner for 2007.





According to Danish newspaper Politiken.dk, Bagger stands accused of creating a scam in which IT Factory could demonstrate healthy financial results without having any actual assets. In a 2007 document (available here), IT Factory forecast revenue of $125 million and claimed to have 1.3 million SaaS customers worldwide.

In June 2007, IT Factory inked a global distribution deal with Avnet, and claimed in an announcement on its Web site that this would give the company a global distribution channel.



It's unclear whether that agreement is still in place: An Avnet representative contacted by ChannelWeb said company policy precludes comment on customer-related issues.

IT Factory started life in the 1990s as a privately held, Boston-based solution provider focused on Lotus Domino and Microsoft Exchange. The firm once billed itself as the largest Lotus Domino ISV in the world.

More recently, IT Factory shifted its focus to delivering SaaS versions of CRM, HRM, and business analytics software, and on company documents available through Google, lists IBM as its closest business partner.



IT Factory enjoyed huge success in the late 1990s, acquiring eight companies between 1991 and 2001. But IT Factory fell on hard times and sold off its assets in December 2001, at which time it consolidated the remains of its technology business in Copenhagen and named Bagger as its new CEO.

Now that Bagger has been officially charged, Interpol will likely be stepping up its search for Bagger. No word yet on whether IBM or any of the U.S. vendors that have allegedly been defrauded by Bagger will offer a bounty for his capture.



Such a move does have precedent: Microsoft in 2004 offered a $250,000 reward for the arrest and conviction of the Mydoom author, creator of what some experts at the time called the worst virus in history.