The Crazy Way Billionaire Bjorgolfur Gudmundsson Went Broke In Less Than A Year

The Icelandic former billionaire Bjorgolfur Gudmundsson has seen some ups and downs during his rollercoaster career as a shipping executive, brewer, embezzler, and soccer team owner. And it appears that he deserved every downturn he experienced and should never be allowed to reach the heights of wealth he keeps recovering after losing it all.

According to The Guardian, his troubles first began in the mid-'80s, when his company Hafskip went insolvent and a federal investigation led to him spending a year in prison for embezzlement. After that slap on the wrist, he went off to Russia to rebuild his fortune (nothing shady there). He and his billionaire son Thor started up a soft drink company, turned it into a brewery, sold it to Heineken, and Bjorgolfur was back in business. He and Thor claimed they never made any deals with the St. Petersburg mafia, even after being threatened by criminals, but as we'll get to shortly, the Gudmundssons aren't really the most trustworthy types.

The sale of the brewery put a few hundred million in his pocket, so, having built back his fortune in Russia, Papa Gudmundssun returned to Iceland, where he invested in the country's second-largest bank, Landsbanki, becoming the chairman in 2003. He also bought the English soccer team West Ham United. Things appeared to be looking up for ol' Gudmundssun. When the Great Recession struck Iceland's banking sector in 2008, he and Thor were the country's only two billionaires.

According to Forbes, posted at Yahoo Finance, Gudmundssun was worth a whopping $1.1 billion in March 2008. But like his company in the '80s, Landsbanki went belly-up just seven months later (starting to see a trend in Gudmundssun's business acumen here?) and his billionaire status was reduced to flat broke. By December, his net worth was listed as $0, his holding company Hansa went into voluntary liquidation, and the West Ham Football Club was up for sale. "Whatever the fate of Iceland," wrote Forbes, "it seems clear that Gudmundsson won't return to the billionaire ranks for a very long time."

And as The Telegraph reported the following year, that seemed to be true. Gudmundsson filed for bankruptcy in August 2009, claiming debts totaling over half a billion dollars. According to the Center for Economic Studies & Ifo Institute, it was the biggest recorded personal bankruptcy in the world. He apparently told the judge he had an "almost complete lack of income."

He faced more consequences in 2015, when French authorities charged him in one of the largest fraud cases in that country's history. Iceland Magazine reported that he and eight other executives at the Luxembourg branch of Landsbanki had defrauded clients, mismanaging the supposedly "risk-free" investments they sold, and ignoring customer complaints from 2006 to 2008. But that was just the tip of the iceberg, and more news of Gudmundsson's shady behavior was still to come.

In April 2106, a whistleblower in the Panama-based law firm Mossack Fonseca began to release droves of documents detailing financial information about over 200,000 offshore business entities that did business with the firm. Although offshore entities aren't illegal in and of themselves, the documents revealed a number of shell corporations used for illicit ends, such as tax evasion, fraud, and avoiding international sanctions. Not surprisingly, Gudmundsson was one of the scores of wealthy people whose financial crimes were exposed by the leak. The Iceland Review reported that the Panama Papers included information dating back to 2001 that linked him and his son Thor to at least 50 corrupt offshore companies.

One of those companies, Ranpod Limited, had been listed as owned by Gudmundsson's daughter Evelyn Bentina, but he and Thor gained power of attorney over it just after the collapse of Landsbanki in October 2008. Ranpod was founded in July 2008, just months before the collapse. Having set up over 400 offshore companies through Mossack Fonseca before it went under, the Icelandic bank was the law firm's sixth-largest client globally. The Panama Papers revealed that the companies were used to move massive amounts of money around undetected. "Some of the loans were never paid back," wrote the Iceland Review, "and it's impossible to tell where those amounts ended up." So who knows — maybe Gudmundsson, like fellow "broke" billionaire Vijay Mallya, isn't as penniless as he'd like us to believe.