Icelandic police close investment fraud probe; investors unlikely to recover funds

Authorities in Iceland have closed a complex fraud investigation that has left nearly 400 investors facing significant financial losses. The case centered on businessman Geir Skoug, who allegedly promised substantial returns on investments that have now vanished.

The Southwest Iceland police department announced the closure of the investigation, which had been ongoing since last year following complaints from 44 investors. They accused Skoug of large-scale financial fraud related to his investment venture, The Gate Index. The total amount invested is estimated to be between 50 to 80 million Norwegian kroner (approximately $4.8 to $7.6 million USD).

Skoug, who died in March, had reportedly promised investors returns of up to 17%. He cited real estate in Cyprus, an initial public offering, and the export of water from Folldal, Norway, to Asia as the drivers of this promised yield. Investors were allegedly unaware of Skoug's extensive history, which included nearly 30 bankruptcies and a record of economic crimes.

One of the investors, Pål Buer Abrahamsen, expressed his disappointment, stating he had been trying to recover his family's money for five years. Investigations by Norwegian broadcaster NRK had previously revealed that many of Skoug's purported partners and offices did not exist. Skoug himself maintained before his death that he never intended to deceive anyone, claiming he was merely trying to build a distribution network that ultimately failed.

Police have stated that no other suspects besides the deceased Skoug have been identified in the case. According to prosecutor Pål Madland, the investigation will not continue as there is no prospect of a resolution or indictment, a common outcome when the primary suspect has passed away.