Olafsson was sentenced to four and a half years in prison, while the other three were sentenced to between four and five and a half years in prison by the Supreme Court of Iceland.
Olafsson will serve his sentence at Kviabryggja penitentiary, an open prison, used to house prisoners who have no previous convictions or are not considered likely to misuse the proportionate freedom at Kviabryggja. No fence or bars are used at Kviabryggja.
Kviabryggja was once a farm but was turned into a prison in 1954. It is situated on Snaefellsnes peninsula, about a three hour drive north of the Icelandic capital Reykjavik.
There are currently 23 prisoners serving time at Kviabryggja which has a staff of six prison guards, a warden and one accountant. Below are pictures, taken by Pjetur Sigurdsson of Frettabladid, inside the prison.
The Kaupthing foursome was accused of hiding the fact that a Qatari investor, Sheikh Mohammed Bin Khalifa Bin Hamad al-Thani, bought a stake in the firm. Al-Thani had bought the stakes with money illegally loaned by Kaupthing.
Al-Thani's purchase, a 5,1% share in the bank, was announced only a few weeks before the collapse of Kaupþing in October 2008. The investor's purchase was seen as a confidence boost for the bank while rumors circulated about the bank having troubles.
Four to five and half years in prison
The Supreme Court confirmed the five and a half year verdict Hreidar Mar Sigurdsson, the former chief executive, received in the district court. Sigurdur Einarsson, former chairman of the board, was sentenced to four years in prison, while Magnus Gudmundsson, the former chief executive of the Luxembourg branch, was sentenced to four and a half years in prison.
These are the heaviest sentences for financial fraud in Iceland's history. The four will have to pay their own legal costs for the case which amount to 82 million kronur or approximately 670 thousand
Hannes Smarason, former chairman of now bankrupt company FL Group, has been acquitted of embezzlement charges in Reykjavik's district court.
Four former bosses from the Icelandic bank Kaupting have been sentenced to between four and five and a half years in prison in the Surpreme Court of Iceland.