Icon trial opens over millions in investor funds

The trial of the Vaasa-based Icon property investment company began on Wednesday at the Ostrobothnia District Court, with nearly 400 claimants and more than 3,000 investors involved. Yle reports that investors put at least 40 million euros into the company before it went bankrupt in 2019.

Yle’s MOT investigation found that millions of euros in investor funds may have ended up with the fund’s founders and in their business activities. Seven people are accused in the case, including Icon’s former chief executive Markus Havulehto, his business partner Rami Virtanen and the company’s former board chair, Jari Koskinen.

How the case began

Yle crime reporter Jyri Hänninen has followed Icon for several years. He said he first noticed news of the company’s bankruptcy in 2020, but initially did not consider it unusual.

He began looking into the company after receiving a tip about how funds raised mainly from investors had been used. His investigation uncovered unusual features in the company’s operations, including large consultancy fees that were in some cases paid to shell companies in Estonia.

Hänninen also found that Icon had carried out property transactions with people close to the company’s management. According to him, Icon’s executives had sold properties to the company, raising questions about whether investor funds had been misused.

At least 40 million euros invested

More than 3,000 people and some institutional investors put at least 40 million euros into Icon. The company’s business idea was to find properties that could be developed or renovated, or to build entirely new properties.

Nearly 400 people are listed as claimants, meaning they may have been victims in the case.

Hänninen described the case as highly unusual, even by Finnish standards. The scale of the police investigation will become clear when the pre-trial investigation material and the indictments are made public at the start of the proceedings.

He said the case may also have an international aspect because some of the money was transferred to companies in Estonia.

Questions over consultancy fees

In the MOT investigation, Hänninen initially focused on certain consultancy fees. Paying commissions for finding suitable properties is common in the property sector, he said.

However, some of Icon’s executives themselves received consultancy fees worth hundreds of thousands of euros. This has raised questions about the purpose of the payments and whether the funds were used appropriately.

Some of the seven defendants still work in the property or investment sectors.

Proceedings expected to last for years

Icon went bankrupt in 2019, and police began investigating the company’s activities that same year. The Ostrobothnia District Court has reserved 50 hearing days for the main proceedings, an exceptionally large number according to Hänninen.

He expects the case to proceed to the Court of Appeal because of its complexity. Hänninen also estimated that it could take as long as 10 years before a legally final judgment is reached.