This is how the fraud happened: How could a lawyer manage to keep a fraud going for several decades, and deceive more than a hundred people for several hundred million kroner? We will try to explain this step by step: The first investors were offered to pay in loan capital which the now deceased lawyer Per Asle Ousdal said he would pass on to people who needed loans. The lenders were presented with interest rates far above what the market could otherwise offer. The money was paid into Ousdal, either to his private account, or to a large extent to the client account in the law firm in which he was a partner. But the money never passed on to the borrowers. They didn’t exist. The loan documents that Ousdal had drawn up were false. Instead, Ousdal used a good portion of the money that kept coming in from the lenders to pay out interest to the investors who had already joined. So far, everyone was satisfied, and no one suspected. In addition, Ousdal took part of the cake himself, either for private consumption or for his own investments. Over the years, more and more capital came in from new lenders, and for a long time Ousdal had enough money to pay out interest to those who were already in. At one point, the fraud scheme began to grow too large for Ousdal. This was especially true when lenders started insisting on having the entire loan repaid, what is known as the principal. Of course, such repayments require much more than just paying out interest. And as long as there were no real borrowers at the other end, there was no one who could repay the loans, other than Ousdal himself. But he had spent the money, either on himself or to pay interest. Beyond 2024, Ousdal was unable to make all the payments because new payments were no longer able to cover the ongoing obligations. The house of cards collapsed, and in June this year the scandal became a fact. Wessel-Aas, who until recently was head of the Bar Association, reacts to the statements that general manager Lars Kåre Pedersen of Bull Årstad Advokatfirma DA made to news on Tuesday. Pedersen claimed that the strict confidentiality that lawyers have in client relationships prevented the other partners at Bull Årstad from being able to uncover Per Asle Ousdal’s fictitious loan business. In the same article, it emerged that NOK 727 million from Ousdal’s lenders went into Bull Årstad’s client account in the period 2013–2023. These payments made up more than half of all payments to the client account during this period. – When, as has been the case with Ousdal, exceptionally large amounts have flowed in and out of the firm’s joint client account, it appears strange that the other partners have not had or have requested any further information about the type of matters or transactions involved about, says Jon Wessel-Aas. The bar association’s former leader refers, among other things, to the responsibility that he believes Bull Årstad has had with regard to legislation on money laundering. – It is not the case that the duty of confidentiality, as it is understood under current law, has prevented Ousdal from being able to answer this. In any case, at a superior level to the company’s management, says Wessel-Aas. Refers to new law Although the individual lawyer is basically bound by a duty of confidentiality regarding details about the client and information about the client and the assignment, this does not prevent the sharing of information internally in a law firm at a more senior level, Wessel-Aas believes. – This may be necessary to ensure statutory requirements for legal practice and its normal operation, says Jon Wessel-Aas. Several lawyers disagree with the Bull Årstad management’s interpretation of the confidentiality rules. Photo: Ole Andreas Bø / news He refers to what the ministry writes about the exception from the duty of confidentiality in the preparations for a new lawyers’ act that has been adopted, but has not yet entered into force: “An appropriate operation of the legal profession also requires that the lawyer can share confidential information both with internal and external employees and helpers. On this basis, the committee has proposed that it should follow from the law that the lawyer can use confidential information to the extent necessary for the fulfillment of statutory requirements for the practice of law, the operation of the practice of law and general office maintenance. The proposal is considered to be in line with current law.” The lending scandal Per Asle Ousdal, former partner in the law firm Bull Årstad DA in Stavanger, is said to have raised loan capital from investors over several decades. These were offered interest rates of 10–15 per cent, without risk. The lawyer enjoyed a high degree of trust in the local business community, and he was a sought-after board member in various businesses. He informed the lenders that the law firm guaranteed the paid-in funds through so-called declarations of suretyship, but the guarantees turned out to be false. The lawyer left Bull Årstad on 31 December last year. The company reported him to the police on 31 May, and he took his own life three days later. The family has chosen to be open about this. The lenders who have lost money are both companies and private individuals in Rogaland, mostly south of Stavanger: In Sandnes, Ålgård and in the municipalities of Klepp, Time and Hå. The case broke in the media late in the evening on Wednesday 12 June. Then Sandnesposten reported that there had been a claim for at least half a billion kroner in the estate of a recently deceased lawyer from Sandnes. Dagens Næringsliv published a longer article about the entire case complex shortly afterwards. Økokrim announced on 18 June that they would start an investigation. The Sør-West police district is also involved in this. On 21 June, the Finanstilsynet also announced that they had started follow-up of certain companies in the case. This applies, among other things, to certain banks, as well as accounting agencies and audit firms. It was on his own Facebook page that Jon Wessel-Aas first published his objections to Bull Årstad’s view on the duty of confidentiality. Gets support Lawyer Olav Lægreid also reacts to the Bull Årstad manager’s reference to confidentiality. – The partnership in Bull Årstad may be interested in not having to bear financial responsibility for Ousdal’s actions. Regardless of whether Ousdal has kept this secret from the other partners or not, it becomes a question of the company’s legal responsibility towards the lenders who have lost money, Lægreid believes. Lawyer Olav Lægreid. Photo: news He characterizes the amounts that have gone into the client account as “absolutely outrageous”. He believes that at least the general manager of the company should have known to whom the transactions concerned, and to which tasks this was connected. Bull Årstad: – Multiple and complex reasons We have submitted the criticism to lawyer and partner Lars Kåre Pedersen who is general manager of Bull Årstad Advokatfirma DA. Lars Kåre Pedersen, general manager at Bull Årstad Advokatfirma DA. Photo: Bull Årstad Advokatfirma DA Pedersen responds to the criticism as follows: – We do not want to participate in a discussion in the media about the scope of lawyers’ duty of confidentiality, he says. – There are several and complex reasons why the fictitious loan business was not discovered earlier, either by us, accountant, auditor or supervisory authorities. Our former partner has managed to lead us and many others astray, extensively. We are very sorry for the damage he has managed to inflict on so many, adds Pedersen. – Due to the ongoing investigations, we do not wish to comment further, although we understand the many questions that are being asked. There is still a great deal in this matter that we are working to clarify and we are cooperating with the supervisory authorities and the police, says Lars Kåre Pedersen. According to Aftenbladet, 114 creditors had submitted claims for a total of NOK 765 million when the deadline expired on Wednesday. Published 01.08.2024, at 10.29 Updated 01.08.2024, at 11.16
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– Strange that the other partners in Bull Årstad did not ask questions – news Rogaland – Local news, TV and radio
