The man behind the notorious Escobar-branded smartphones and gadgets has pleaded guilty to multiple counts of fraud and money laundering. Olof Kyros Gustafsson, former CEO of Escobar Inc, admitted in a US court to orchestrating a scheme that duped thousands of online buyers with promises of ultra-cheap foldable smartphones, gold-plated iPhones, and even flamethrowers.
Escobar Inc, founded by Roberto Escobar – the brother of Colombian drug lord Pablo Escobar – rose to infamy in 2019 with the Escobar Fold 1, a rebadged Royole FlexPai. This was followed by the Escobar Fold 2, a Samsung Galaxy Fold thinly disguised under gold stickers. Tech YouTuber Marques Brownlee (MKBHD) exposed the scam in 2020 when he peeled off the sticker to reveal Samsung’s logo underneath.
The company’s scams didn’t stop at smartphones. It also advertised the Escobar Flamethrower which mimicked the Not-A-Flamethrower by Elon Musk’s Boring Company, as well as Escobar Cash which was marketed as the world’s first “physical cryptocurrency”.
In each case, customers paid hundreds of dollars for items that never arrived. Gustafsson’s team instead used the act of sending out inexpensive certificates or books as proof of delivery to payment processors, helping to block refund claims. Between late 2019 and mid-2020, he laundered more than US$300,000 (~RM1.2 million) collected from the fraudulent sales, according to court filings.
Gustafsson, who was arrested in Spain in 2022 and extradited to the US earlier this year, faces up to 20 years in federal prison for each fraud charge and 10 years for each money laundering count. He has agreed to pay up to US$1.3 million (~RM6 million) in restitution to victims, with sentencing scheduled for 5 December 2025.
(Source: US Attorney’s Office, via The Verge)
