The Escobar Fold phones were a scam after all
foldable phones
branded with
Pablo Escobar
's name? Turns out they were exactly what they looked like, too good to be true and a scam.
Olof Kyros Gustafsson
, the 32-year-old Swedish mastermind behind
Escobar Inc.
, pleaded guilty to fraud and money laundering charges, finally putting an end to one of tech's most brazen scams.
Gustafsson convinced thousands of people to shell out $399 for the "
Escobar Fold 2
," promising cutting-edge foldable technology at a fraction of Samsung's $2,000 Galaxy Fold price. The catch? Most never received their phones. Those lucky few (mostly influencers) who did get a package found
Samsung
Galaxy Folds wrapped in cheap gold foil,
Escobar Fold phones were not made by Escobar Inc.
The Escobar Inc caught attention when Marques Brownlee famously unboxed an Escobar Fold 2 on YouTube, revealing it was simply a
Samsung Galaxy Fold
with gold foil stickers slapped on top.
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Even more telling, Gustafsson later admitted in company correspondence that the Fold 2 was "an overstock purchase of the Samsung Galaxy Fold" bought from retailers and wholesalers. The first device, the Fold 1, bore striking similarities to the FlexPai from Chinese manufacturer Royole, though Gustafsson denied any connection.
Now, that Fold 2, per Marques, was sent by Escobar Inc. themselves. That tells that Gustafsson deliberately sent sample devices to influencers to drum up interest, knowing the buzz would drive more orders. It worked, The videos inadvertently gave the fake company some credibility, eventually pocketing over $300,000 from unsuspecting customers.
Books instead of Folds
These thousands of people who paid around $399, would get a "Certificate of Ownership," over their mail. After that one would hope for their Escobar Fold phone. Instead they received Pablo Escobar's brother Roberto's autobiography and a congratulatory flyer featuring scantily-clad women. When buyers demanded refunds, Gustafsson used these book shipments as "proof" that products had been delivered, successfully blocking refund requests through payment processors.
The company didn't stop at phones. Gustafsson also hawked "Escobar Flamethrower," a dupe of Elon Musk's Boring Company flamethrower, an "Escobar Gold 11 Pro Phone" that was supposedly a refurbished iPhone, and even "Escobar Cash," that the Escobar Inc. marketed as the world's first physical cryptocurrency. None of these products existed beyond promotional materials and the occasional sample sent to reviewers.
CEO faces 20 years jailtime for $1.3M fraud
Federal investigators eventually caught up with Gustafsson's operation. He was arrested at his home in Marbella, Spain, in December 2023 during a joint raid by Spanish police and U.S. Internal Revenue Service agents. After unsuccessfully seeking asylum in Spain to avoid extradition, he was brought to Los Angeles to face charges for 115-count federal indictment
Court documents show Gustafsson laundered over $307,000 through bank accounts in the United States, Sweden, and the United Arab Emirates during just the first six months of the scheme.
Gustafsson sentencing is scheduled for December 5, and he faces faces up to 20 years in federal prison on fraud charges and up to 10 years for money laundering when he's sentenced on December 5th. He must also pay $1.3 million in restitution to the customers he duped, though many victims are likely wondering if they'll ever see that money either.
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