He was 2009–2010 convicted of fraud and false accounting related to his business activities, for which he served a two-year prison term.
Ljungman initially received a two-year prison sentence;[12] which was reduced to 10 months on appeal after the tax evasion charges were dismissed.
Ljungman was linked to IT Factory's CEO Stein Bagger,[17] who went missing four days before the company's collapse was publicly announced.
[18] Bagger fled from Dubai to the United States and eventually surrendered to police in Los Angeles, where he was found to have Ljungman's car and to have used his credit card.
On 9 January 2009 the Deputy Attorney in charge of fraud cases in Denmark announced that they wanted to question Ljungman.
He was arrested by Swedish police in Norrköping where he had just started his ten-month sentence in an open prison and was extradited to Denmark on 27 July 2009.
[24] On 26 March 2010 Ljungman was convicted of involvement in the IT Factory fraud in Denmark,[25] and was released under supervision in September 2013 after serving slightly less than half of a seven-year sentence.
[29] In December 2012, Danish authorities recovered a portion of the money stolen from IT Factory from accounts in Hong Kong and Jersey belonging to Mikael Ljungman.