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In a plea deal, U.S. prosecutors describe how Olof Kyros Gustafsson and Escobar, Inc. accepted orders for phones and other items featuring images of drug kingpin Pablo Escobar. They distributed these products to tech reviewers and social media influencers to “boost demand” but ultimately failed to deliver the products to customers, opting instead to channel and launder the funds for “personal use.”
In a video by Brownlee, an Escobar Fold 2 phone was revealed after being sent to him. It turned out to be merely a Samsung Galaxy Fold, retailing at almost $2,000—significantly higher than the $400 price set by Escobar Inc.—adorned with a gold sticker.
Moreover, Escobar Inc. marketed a $500 “Escobar Flamethrower” inspired by The Boring Company’s Not-A-Flamethrower, a “Gold 11 Pro Phone” supposedly a refurbished Apple iPhone 11 Pro priced at $500, and Escobar Cash touted as the world’s first “physical cryptocurrency,” as detailed in 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.
