Seventy people charged in Landsbanki fraud case
Tuesday 27th October 2026 on 15:31 in
Iceland
Seventy people have been charged in a fraud case involving Landsbanki, after several men allegedly exploited a temporary system error to take hundreds of millions from the bank, mbl.is reports.
The two main defendants, both in their thirties, are accused of defrauding the bank of 120 million. The proceeds of the alleged offences are estimated at about 95 million.
Prosecutors say the men used one defendant’s Landsbanki online banking account to make 218 transfers from an account without sufficient funds. A temporary fault at the Banks’ Data Centre, known as RB, meant the account’s available balance did not decrease after each transfer.
The alleged offences took place from 11 to 28 October last year. The money was transferred to accounts belonging to other defendants, who withdrew it as cash and handed it to the two main defendants or four alleged accomplices. Those who took part were paid a share of the estimated proceeds.
The four alleged accomplices are accused of arranging for others to participate in the laundering of the money, acting as intermediaries between the main defendants and those who withdrew the cash. The article describes the scheme as money laundering through intermediaries, also known as a money mule scam.
The charges cover 120 million, although when the case emerged last year, reports said about 390 million had been taken from Landsbanki and 10 million from Arion Bank. In January, the district prosecutor said between 200 million and 300 million had been recovered.
Most of the defendants live in Iceland. Two people identified as suspects were reported to have left the country, and one of the main defendants is now in prison.
The case is due to be arraigned next Monday at Reykjavik District Court. The hearing is expected to last six hours in courtroom 101, the court’s largest. The room can accommodate about 30 to 35 people, including defence lawyers, in addition to the judge, a court employee and the prosecutor. An arraignment typically takes five to 15 minutes, according to mbl.is.