Olof Kyros Gustafsson, the 32-year-old Swedish boss of Escobar Inc, has been jailed for four years over a scam that used half-naked models to sell non-existent Pablo Escobar-branded flamethrowers and gold phones.
The company cashed in on cartel infamy by claiming its products were linked to the notorious drug lord, using sexualised social media ads featuring models holding weapons and gold bricks to lure fans of "narco" culture.
US prosecutors said the flashy pitch was a scam, and investigators found the company's headline gadget, the "Escobar Fold", was not a cut-price miracle phone.
Fake gold phones and flamethrowers
The Escobar Fold was advertised as a 24-carat gold-plated folding smartphone for $349 (£275). In reality, it was a cheap Samsung Galaxy Fold covered in gold stickers.
The firm also pushed "Escobar Flamethrowers", copying the viral marketing style of Elon Musk's Boring Company. According to the US Department of Justice, the flamethrowers were never manufactured, let alone shipped to customers.
Mail-fraud scheme
Court papers allege Escobar Inc ran a ruthless mail-fraud operation to stop angry buyers getting refunds. When customers complained items had not arrived, the firm allegedly issued fake tracking numbers or shipped empty boxes to make it look like orders had been delivered.
The bogus shipping records were then used to block chargebacks with banks and payment processors, locking in the cash.
Gustafsson is accused of funnelling more than $1.3 million (£1.03m) through shell companies and into personal bank accounts to fund a luxury lifestyle, the Telegraph reported.
Arrest and sentencing
The US Department of Justice said the fraud unravelled after investigators audited payment processors and used shipping weight logs to prove "deliveries" were often empty.
Gustafsson, who partnered with Roberto de Jesús Escobar Gaviria in 2014 to set up Escobar Inc, fled the US but was arrested in Spain in December 2023 and extradited back to California after a lengthy legal fight.
He was sentenced at a Los Angeles court last Friday and ordered to pay $1.3 million (£1.03m) in restitution to victims.
