Hannes Smarason was indicted by Iceland's special prosecutor for embezzlement. The former chairman of FL Group HF was said to have misappropriated ISK2.875 billion or USD23.5 million from the FL Group before it was renamed as Stodir.

In 2005, Smarason had transferred money from an FL Group account to a friend's account. The money was then spent to purchase Sterling Airlines SA. These were found in a copy of the indictment that was emailed to prosecutors earlier today.

Two calls were made to Smarason to his mobile phone seeking comment on the matter. Both calls were left unanswered.

Smarason resigned as CEO of FL Group back in December of 2007. This was the year the company had lost ISK67.2 billion according to its financial earnings reports. FL Group then renamed itself Stodir hf after it had placed a moratorium on debt payments at the end of September 2008. In 2009, creditors of Stodir agreed to swap the debt for shares in the company.

He became the Chairman and CEO of IcelandAir in 2004 and a year later became the FL Group. Prior to Icelandair, he served as Executive Vice President and Finance Officer of deCODE genetics between 1990 and 2000. Now, he is the CEO of NexCode Health, a start up formed to apply the genomics database of deCODE Genetics directly upon Nation care.

He left GL Group in 2007 and from there his business dealings were the subject of investigation by Icelandic authorities. There were also findings that his personal as well as related firms had owed about ISK 80 billion from Icelandic Banks that had folded up during the financial crisis. 

Aside from this case, he was also indicted as one of the defendants in the bankruptcy case of Glitnir Bank. While the case was already dismissed, he had sought to be reimbursed for legal expenses from the bank's winding up community.