On Friday the economic crime unit of the Norwegian police raided the headquarters of Microsoft-owned Fast Search and Transfer in Oslo.

According to Dagens Næringsliv Fast has entered 90 million NOK into the accounts for an Australian deal that never existed.

Økokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime) has now confiscated several thousand documents in order to find out who knew about this so-called Telstra-deal.

Photo of John Lervik

Fast signed a memorandum of understanding with Australian Testra on December 21 2006, but this MoU was never turned into a proper sales agreement.

The theory is that Fast inflated its accounts, and thus made company look more profitable than it was, by including deals like this one. More than 100 million NOK worth of contracts were not real. At the same time as some 30 million NOK was apparently paid out to Fast directors as bonuses via straw companies.

Fast Search and Transfer risks getting fines of several million Norwegian kroner, and some Fast heads, including CEO John Markus Lervik, may serve up till 6 years in prison, according to the Norwegian newspaper.

According to today’s edition of Dagens Næringsliv Kredittilsynet (the Financial Supervisory Authority of Norway) visited Deloitte, Fast’s auditors, the previous week.

Microsoft is apparently taking action to clean up the mess. John Lervik is, according to Dagens Næringsliv removed as board leader for the Fast daughter company Fast Search and Transfer International as, although he remains CEO of the main company.

Fast was established in Trondheim in Norway in 1997 with Lervik as one of its first employees. The company soon became one of the leading search engine companies in the world, and became known for its AlltheWeb web search engine.

Later on the company decided to focus on enterprise search. Lervik became CEO in 2001, after a very turbulent time for the company.

Microsoft bought Fast earlier this year.

See also: Fast and Microsoft establish Innovation Center in Norway
Microsoft will move its main office for enterprise search to Norway
Razzia hos Fast (E24, in Norwegian)
Fast samarbeider etter razzia and Jukset seg til million-bonus (Computerworld Norway in Norwegian)
Microsoft’s Fast Search charged with fraud in Norway (IT World)