The small northern team Östersunds FK defeated Arsenal at the Emirates. Foto: TT

Serious economic crime suspected in funding of Swedish football sensation

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UPPDRAG GRANSKNING · The rapid rise of the tiny Swedish club Östersunds FK from amateur level to the knockout phase of the Europa League shocked the football world. But now, the chairman of the team is facing prosecution for suspected serious economic crime that may lead to prison. Mission Investigate can now reveal how the team may have acquired its club license based on false information.

It is spring 2018. Östersunds FK have just defeated Arsenal at the Emirates. Although the team is knocked out of the tournament despite winning the match, its recently departed chairman Daniel Kindberg is spot on with his comment after the match:

“This match will go down in history.”

Just six years earlier, ÖFK, a small northern team, played in Sweden’s fourth tier. In just a few years they climbed from amateur level to playing the top European teams. Not only did the team play entertaining football, they were also unconventional off the pitch. They performed plays, wrote books and painted. Core values were an important message that the club often talked about. Everyone was welcome, everyone got to play.

The ÖFK success story has been told, over and over again.

But the reality behind the fairytale is not as well-known, or as glamorous. It might even result in prison for the club’s previous chairman of many years, Daniel Kindberg.

Mission Investigate now reveals information indicating that the club’s status among Sweden’s football elite, and its surprise career in Europe, are based on suspected falsified data and a financial set-up in which millions of Swedish taxpayers’ kronor may have been funnelled into the club from the municipality.

But to understand how it all started, we need to look back in time.

Players celebrating at their home stadium Jämtkraft arena. Foto: TT

In 2013, ÖFK took its first step into the upper echelons of Swedish football. The team was promoted to Sweden’s second division, joining the country’s elite. But their successes on the pitch came with strings attached. The Swedish Football Association demands a certain financial status of teams, so ÖFK needed positive equity, or it risked dropping down to amateur status again.

This is when a mobile restaurant, given to ÖFK as a gift, became vital to the club’s finances. The club’s 2012 annual report shows that ÖFK received the restaurant and then sold it for about SEK 3 million.

“The sale of the building is of vital importance to the club’s liquidity requirements in 2013, as well as the amount of reported equity,” their accountant wrote in the annual report.

But there was one problem:

The sale was bogus.

The restaurant was never sold and still stands in the stadium today. The figures sent to the Swedish Football Association, showing that the team had positive equity and thus met the requirements for its club licence, are based on false data. If not for the bogus sale and the higher valuation, the club would have reported negative equity.

Now the club admits that the restaurant was never sold.

“I don’t know why our accountant chose to write that in 2012, because the restaurant is still an asset today,” says Lars Landin, office manager of ÖFK and one of the three representatives of the club who signed and confirmed that the annual report was correct in 2012.

The accountant tells SVT that she would never have formulated it that way if the club had not shown her proof of sale.

Instead, the building remains, and is still registered as an asset today. According to the club, the building got valued to SEK 3 million, even though they didn’t sell it. But Mission investigate can reveal information from a document that shows that ÖFK, by the time of the bogus sale, valued the building to SEK 1,1 million. 

The bogus sale and the revaluation to SEK 3 million helped balance the club’s finances and met the requirements to keep their club licence for several years. 

The 2013 and 2014 annual reports also show that equity is only positive due to the valuation of the building. This means that the Swedish Football Association may have been misled by ÖFK’s figures even when the club applied for its licence in later years, for example in the 2015 Allsvenskan and its later breakthrough into European top football.

But this is not the only case in which representatives of ÖFK are suspected of tampering with their financial reporting. This spring, the man considered responsible for the team’s success, previous club chairman for many years Daniel Kindberg, faces prosecution. He originated the vision of taking ÖFK to the top levels of Swedish football; he got English coach Graham Potter to leave his country to train an amateur team in cold northern Sweden.

Graham Potter coached the team during the successful years. Foto: TT

“Of course, for me, he was the reason why I ended up there. He sold me the vision if you like, the idea. I believed in that. I think his ability to create that vision for everybody to follow was a huge part of the success.”

The Swedish Economic Crime Authority states that Kindberg, as CEO of the municipal housing company in Östersund, created a system in which money flowed from the housing company through a circuitous route to ÖFK:

Kindberg had an entrepreneur from the town of Sollefteå invoice the construction company PEAB.

A manager at PEAB received the invoices and paid the Sollefteå entrepreneur. Then PEAB sent invoices to the municipal housing company of which Kindberg was CEO.

The invoices from PEAB then got paid.

The entrepreneur in Sollefteå, who had been paid by PEAB, which in turn was paid by the municipal housing company, then sponsored ÖFK with millions.

This procedure is suspected to have gone on for years.

The municipal housing company’s internal investigation is sure they know what happened.

“We have received regular invoices for additional work, yes. What we found in the investigation is that it amounts to SEK 10.7 million,” commented Christer Sundin, CEO pro tem of the housing company at a press conference last year.

As a result, Kindberg and two others are now being prosecuted for serious economic crime.

Daniel Kindberg does not wish to comment on the report by Mission Investigate. Foto: TT

Graham Potter was the coach behind the team’s successes.

Does this scandal take away anything from Östersund’s success story?

“There are a lot of ‘ifs’ there, of course. Of course, somebody has to be convicted first, before there is any announcement to make. At the moment, I think he is still innocent, according to Swedish law. If it’s true, the reality of it is, it’s a sad thing for him, and people can make of it what they will, that’s nothing I can control. I know the work that I did and what I put into the project. So that’s how I think of it,” says Graham Potter, who has now left ÖFK to coach Swansea.

Do you think he is innocent?

“I have no reason to think anything else. He never indicated anything to me other than that.”

The team’s future is uncertain. Their successes in the Europa League provided a much-needed boost to their income, but the new year has begun poorly on the pitch. The team’s dream of playing in Europe again collapsed quickly when they were knocked out of the Swedish Cup at an early stage by a team in a lower division.

SVT´s Mission Investigate has tried repeatedly to reach Daniel Kindberg, who does not wish to comment.

The club’s vice-chairman for many years, who has served as chairman since Kindberg’s departure, is also under suspicion. He is being investigated for bribery.

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