JAKARTA Olof Gustafsson, CEO of Sweden from controversial company Escobar Inc., has finally pleaded guilty to six counts of fraud and money laundering before a federal judge in Los Angeles, United States.
He now faces a threat of up to 20 years in prison for any charges of fraud, and up to 10 years for each charge of money laundering. The sentencing is scheduled to be announced on December 5.
Escobar Inc. founded by Roberto Escobar, brother of legendary Colombian drug kingpin Pablo Escobar. The company caught the world's attention in 2019 and 2020 with the launch of various technological products that sounded extraordinary but turned out to be deceptive.
Among the products offered are Escobar Fold 1 and Fold 2 folding phones, gold-plated iPhones, flamethrower firearms that resemble products from Elon Musk's company, as well as Escobar Cash, which is claimed to be the world's first physical cryptocurrency.
However, the reality behind these products is far from expectations. Escobar Fold 1 turned out to be just a rebranding version of Royole FlexPai, while Escobar Fold 2 proved to be the Samsung Galaxy Fold which was only coated with gold stickers and sold for $399 far below the original market price. Although it looks interesting, most customers never receive the products they buy.
Instead, they were only sent Escobar's certificate of ownership, book, or merchandise. These items were used by Gustafsson to create fake shipping records, which he then used to convince payment service providers such as PayPal and Klarna that products had been delivered, making it difficult to return funds for the victims.
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Similar modes are also used for other fake products, including a flamethrower for $249 and a gold-plated iPhone. Gustafsson even admitted that he illegally assembled product samples to a number of well-known technology influencers and reviewers to create hype and increase demand. One of the viral videos of the MKBHD technology YouTuber in 2020 accidentally helped expand the reach of this scam.
During his operation, Gustafsson received more than 300,000 US dollars from the victims. He was finally arrested in Spain in 2022 and extradited to the United States in March 2025.
In his plea deal, Gustafsson agreed to pay up to 1.3 million US dollars as restitution to the victims and handed over all the proceeds of fraud, including funds stored in Swedish bank accounts.
In a press release in 2019, Roberto Escobar once stated, 'I want people to burn money, as Pablo and I usually do.' Unfortunately, most customers lost their money long before setting them on fire. Now, they can only hope that this legal process will provide justice and a decent refund.
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