Back in 2020, Sifted reported on how the Kalashnikov-wielding CEO of a company that manages the trademark of deceased Colombian drug lord Pablo Escobar was taking Klarna to court — saying that the Swedish fintech was withholding €400k that it owed his business.
Four years later, the same Olof Gustafsson is facing legal troubles of his own. The CEO of Escobar Inc — the company which oversees the rights to the family name — is now in custody in Spain for fraud, having failed to deliver 500–600 gold-plated mobile phones it sold, some of them through Klarna.
But fraud is only one of the crimes that Gustafsson is suspected of. Others include smuggling, money laundering and participation in a criminal organisation that deals in illegal art trading.
From a cell in the Penitentiary Center in Murcia, Spain, he is now fighting extradition to the US.
The Klarna case
Gustafsson, also known as “El Silencio”, has been running Escobar Inc for the last nine years. Escobar Inc has filed lawsuits against several companies for allegedly misusing the family name. In 2016 it sued Netflix over the television series Narcos and a settlement, for an undisclosed amount, was reached out of court. The company has also filed lawsuits against companies such as Apple and the rappers 2 Chainz and Snoop.
In 2020 Escobar Inc claimed that Klarna was withholding €400k in cash owed to them for a thousand gold-plated, Escobar-branded mobiles sold through the Klarna platform.
Back in December 2019, Escobar Inc was given the go-ahead to sell its phones through Klarna. Within three days of the release of its Escobar Fold 1 (actually a gold-plated Royole FlexPai), Gustafsson claims that over 1,000 phones had been sold through the website.
After those three days, Klarna decided to discontinue Escobar Inc as a business customer due to “ethical reasons”.
Why Klarna didn’t pay Escobar Inc for the mobiles the company had sold through the platform had to do with suspicions that the phones never reached the customers, according to an email sent from Klarna in 2020.
At the time Sifted spoke to Gustafsson in November 2020, he said that he was confident of winning the court case against Klarna and even being able to delay the planned IPO for Klarna.
“I can guarantee that since my lawyers are very good, we will win in the US and that will be a big loss for Klarna. If we take this to a jury, we can get a temporary injunction. Then we can stop Klarna from going public in the US,” Gustafsson said at the time.
One year later, in April 2021, the case against Klarna was voluntarily discontinued by Escobar Inc.
Escobar Inc continued to sell the phones through other channels and the fraud allegations involve 500-600 mobile phones customers paid the company for but never received.
According to Gustafsson, who has spoken to the Swedish newspaper Svenska Dagbladet, he now says that the delays were due to delivery problems caused by the pandemic.
“Our business has been affected by force majeure, it is not illegal to do bad business,” he told Svenska Dagbladet.
The Escobar connection
In addition to Spanish police, federal agents from the US Internal Revenue Service also participated in Gustafsson's arrest, according to the Swedish newspaper.
According to Gustafsson, the US wants to extradite him because of his close relationship with the Escobars — he has known the family since meeting them to discuss making a video game about the deceased drug lord in 2014.
“I know an incredible amount of sensitive information. I am one of the few people that Roberto Escobar (Pablo’s brother) knows well and has done business with for over 10 years,” he said to the newspaper.
Since Gustafsson made his Swedish family holding company a business customer of Klarna, he argues that this is not a case for US law enforcement but a case that should be handled in Sweden.
“The deals have been done via Swedish limited companies in Swedish kronor, I am a Swedish citizen. I hope Sweden will take me home and give me a humane legal process, not send me like a piece of meat to the USA,” he told Svenska Dagbladet.