Fugitive CEO Stein Bagger Arrested In L.A.

In a case that has taken more bizarre twists and turns than a David Lynch film, Bagger stands accused of defrauding Danish banks and U.S. partners, such as IBM, out of more than $205 million, although investigators believe that figure could be much higher.

Bagger, 41, walked into the Los Angeles Police Department's Central Division on Saturday at 1 p.m. and surrendered to officers on duty, who initially had no idea who he was, and had to verify his identity through a Web search, according to a Sunday report in CRN Denmark.

According to CRN Denmark, Bagger told police he flew from Dubai to New York on Nov. 28 and then drove a rental car to Los Angeles. After his arrest, police transferred Bagger to the Metropolitan Detention Center, where he'll be held by U.S. immigration authorities while awaiting extradition proceedings.

It's unclear why Bagger traveled to California before surrendering, but Danish authorities had reportedly been expecting him to flee to the U.S. because of his many stateside business contacts.

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

Bagger has reportedly told family members he was blackmailed into committing fraud by unnamed third parties, claims that Danish police have thus far been unable to verify. After his disappearance, rumors of Bagger sightings cropped up in the Bahamas and Panama.

Bagger, who reportedly has links to the Danish branch of the Hell's Angels, is also suspected of involvement in a beating of a former business partner that took place last month.

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, and more recently, shifted its focus to delivering SaaS versions of CRM, HRM and business analytics software.

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.