Shortly after Gärdestad's return to Sweden in 1986, the Prime Minister of Sweden, Olof Palme, was murdered. Gärdestad was wrongly mentioned in the Swedish media as "the 33-year-old," a suspect in the investigation of the assassination, which severely affected him although Gärdestad was on vacation in Greece at the time of the murder, and although he was never questioned by the Swedish police nor was under suspicion by the authorities, the speculations and rumours followed him and his family for the rest of the 1980s. A few years later, he was again the subject of rumours accusing him of being Lasermannen, a bank robber and serial killer. The rumours affected the sensitive and already unstable former star, and Gärdestad withdrew and fell into a deep depression.