Olof Kyros Gustafsson, former CEO of Escobar Inc., pleaded guilty to fraud and money laundering charges in a US Department of Justice agreement. The company, known for marketing products such as the Escobar Fold 1 and 2 phones (featured in a 2020 Marques Brownlee video), is accused of taking customer orders without delivering products. Gustafsson and Escobar Inc. allegedly seeded products with tech reviewers and social media influencers to boost demand, then laundered customer funds for personal use. Other products included a $500 "Escobar Flamethrower," a $500 "Escobar Gold 11 Pro Phone," and "Escobar Cash," a purported physical cryptocurrency. Instead of shipping ordered products, customers received certificates of ownership, books, or promotional materials. Gustafsson used this as proof of delivery to deny refund requests.

Gustafsson faces up to 20 years in prison for fraud and up to 10 years for money laundering, along with up to $1.3 million in restitution. A sentencing hearing is scheduled for December 5th.

Impact Statement: The guilty plea concludes a significant fraud case, highlighting the need for consumer protection against deceptive marketing tactics and highlighting the consequences of financial crimes.