Latest news with #OlofKyrosGustafsson
Phone Arena
6 days ago
- Business
- Phone Arena
The gold-plated Escobar phone scam has finally caught up with its creator
If the words Escobar foldable phone ring a bell, congrats – you've definitely been paying attention to tech news over the years. That gold-plated foldable phone from 2019 was very much a real headline at one point – even if the product itself turned out to be anything but. Now, the guy who ran the show – Swedish CEO Olof Kyros Gustafsson – has officially pleaded guilty to fraud and money laundering. The announcement comes straight from the US Department of Justice, marking the end of one of the most bizarre tech scams in recent memory. Back in 2019, Gustafsson was fronting Escobar Inc., a company named after the Colombian drug kingpin. The company promised wild things: gold-plated foldables for just $399, physical cryptocurrency called 'Escobar Cash,' even flamethrowers. But instead of building real products, Gustafsson was just slapping gold foil on Samsung's $2,000 Galaxy Fold and reselling it under the Escobar name. Something that popular reviewer Marques Brownlee (MKBHD) exposed back then in a video, helping spread the word about the whole scam. Video credit – MKBHD However, people placed orders, and well…they never got the phone. Instead, Gustafsson would send them some random 'Certificate of Ownership,' a promo book, or other junk just to have a tracking number. If someone asked for a refund, the company would point to that mailing receipt to deny the request. In total, Gustafsson now faces up to 30 years in prison – 20 for the fraud, 10 more for the laundering – and could be ordered to pay $1.3 million in restitution. Sentencing is scheduled for December 5. This whole saga is a wild cautionary tale about too-good-to-be-true tech. I mean, a foldable phone for $400, especially one dipped in gold? That's not a bargain, it's bait. So, better stick to official stores or trusted retailers – and if something sounds too good to be true, it almost always is.
The Verge
7 days ago
- Business
- The Verge
The Escobar Phone scam saga has finally come to an end
is a news editor covering technology, gaming, and more. He joined The Verge in 2019 after nearly two years at Techmeme. The former CEO of the company that marketed the sketchy-looking Escobar Fold 1 and Escobar Fold 2 phones — which you may remember from a 2020 video from Marques Brownlee — has pleaded guilty to fraud and money laundering, according to the US Department of Justice. In a plea agreement, United States attorneys detail how Olof Kyros Gustafsson and Escobar, Inc. took orders for the phones and other products branded with the likeness of the drug lord Pablo Escobar, seeded products with tech reviewers and social media influencers to 'in order to attempt to increase demand,' did not deliver the products to customers, and transferred and laundered customer money to 'use the funds for their own personal use.' In Brownlee's video, he unboxed an Escobar Fold 2 phone shipped to him and found that it was just a Samsung Galaxy Fold — a phone that cost nearly $2,000, far more than the $400 Escobar Inc. was selling it for — with a gold sticker on it. Escobar Inc. also sold a $500 'Escobar Flamethrower' that was 'modeled after' The Boring Company's Not-A-Flamethrower, the $500 'Escobar Gold 11 Pro Phone' that was 'marketed as a refurbished Apple iPhone 11 Pro,' and Escobar Cash that was 'marketed as the world's first 'physical cryptocurrency,'' according to the plea agreement. Instead of sending products to paying customers, Gustafsson mailed them a ''Certificate of Ownership,' a book, or other Escobar Inc. promotional materials' to create a mailing record, the DOJ says in its press release. Then, when a customer tried to get a refund for something that wasn't delivered, 'Gustafsson fraudulently referred the payment processor to the proof of mailing for the Certificate of Ownership or other material as proof that the product itself was shipped and that the customer had received it so the refund requests would be denied.' A judge has scheduled a sentencing hearing for December 5th, where Gustafsson faces up to 20 years in federal prison for the fraud-related counts and up to 10 for the money laundering-related counts. Gustafsson must also pay as much as $1.3 million in restitution.
