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.
