Sweden Yachts Group: Prison sentence and professional ban against shipyard boss

The verdict handed down by the criminal division of the Uddevalla District Court in western Sweden on 11 June marks the end of one of the most brazen cases of insolvency fraud in international boatbuilding in recent years. As YACHT has documented extensively since the beginning of 2024, Mattias Rutgersson, former head of the Sweden Yachts Group, had cheated yacht buyers out of advance payments totalling more than four million euros for years.

More about the case:

• End for Sweden Yachts Group
• What yacht buyers can learn from the shipyard bankruptcy

The customers, including a doctor from North Rhine-Westphalia, had repeatedly injected hundreds of thousands of euros during the coronavirus pandemic to enable the continued construction of their boats. However, the then head of the Sweden Yachts Group actually used the money to bridge other financing bottlenecks.

As it now turns out, he even used it to pay his own tax liabilities. A kind of Ponzi scheme that he was able to maintain until autumn 2023 thanks to the good reputation of Orust's boat builders, his trustworthy appearance and the good faith of the owners. But then the scam was exposed.

One year in prison for Rutgersson

Following the ruling by the Uddevalla District Court in western Sweden on 11 June, Rutgersson has been jailed for a year. He was also banned from practising his profession for three years and ordered to pay a heavy fine for "serious tax evasion".

He has until 2 July to lodge an appeal. However, the court did not set the custodial sentence as requested by the public prosecutor's office and made it clear that there was no alternative to the sentence now found.

In the course of the trial, Rutgersson even showed something like insight. He denied that he was liable for repeatedly submitting late tax returns, which enabled him to conceal the financial difficulties of his shipyard. However, he did not object to the classification of the seriousness of his offences. As stated in the judgement, he "admitted the tax offence" during the hearing. He also "did not object to the applications to prohibit the business activities."

Over 4 million euros gone

When insolvency proceedings were opened in the spring of last year, the whole fiasco that Rutgersson had caused gradually became apparent: more than incomplete accounting, high liabilities, many only partially completed yachts and virtually no assets that could have been utilised as bankruptcy assets.

In her report, insolvency administrator Paula Save stated that only 11,860 euros in assets could be found - but that there were outstanding receivables totalling 4.17 million euros. Due to the glaring gaps in the accounts, she was unable to determine the exact date of insolvency. This could have "already occurred in the first quarter of 2020" - three years before Rutgersson filed for insolvency.

In the course of the proceedings, which have now been concluded, the District Chamber of the Regional Court found a total of "seven breaches of the accounting obligation", which are to be categorised as "not minor". The defendant "was unable to provide a reasonable explanation as to why all the annual financial statements had not been submitted on time despite reminders and late payment penalties".

Misappropriation of company funds

However, the misappropriation of company funds to pay tax debts weighed most heavily in the judgement. The court considered it proven that Rutgersson diverted a total of 4,090,000 Swedish kronor (the equivalent of around 373,000 euros) from two of his companies, Sweden Yachts Group AB and Sweden Yachts Group Marin AB, to pay his private debts.

"He explained that he had borrowed the money elsewhere and then wanted to pay it back," the judges stated. "However, Rutgersson did not give a single indication of where the money was to come from. (...) He must have realised that he might not be able to borrow more than 4,000,000 kroner privately. (...) Against this background, the District Court agrees with the Swedish Tax Agency's assessment that the payments should be regarded as salary."

The former shipyard boss must now not only pay the outstanding income tax on the stolen company capital, but also a 40 per cent penalty on the tax debt.

The judgement concludes with an explanation regarding the prison sentence: "Rutgersson has also been prosecuted for accounting offences in the past," the court writes. "A sanction other than a custodial sentence is therefore out of the question."