Pablo Escobar’s brother sues Europe’s most valued fintech
Pablo Escobar’s brother is suing Europe’s most valuable fintech Klarna, valued at $10.6bn, for withholding Escobar Inc’s foldable phone funds sold on Klarna’s platform. As Escobar Inc. comes under fire for scam accusations, Maddy Christopher investigates the mysterious Escobar holding company.
Founded by the notorious Columbian druglord and narcoterrorist Pablo Escobar (deceased), Escobar Inc. is suing Swedish fintech Klarna for reportedly withholding €400,000 owed for their Escobar-branded foldable phones.
Now run by brother Roberto de Jesús Escobar Gaviria and Swedish CEO Olof Gustafsson, often called “El Silencio”, the company has frequently been seen suing companies using the Escobar name.
“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,” Kalashnikov-wielding Olofsson told Sifted. “Then we can stop Klarna from going public in the US.”
Valued at $10.6bn and raising $650m during its last funding round, the amount appears insignificant. But as the fintech gets ready for a US IPO, Klarna is now being placed under an ill-timed spotlight into its dealings with a company associated with various scams.
In order to become an approved business customer at Klarna, Escobar Inc. went through processing lasting several weeks during which it had to provide evidence of the ordering site, product prices and advertisement type to Klarna. The days after the Escobar Fold was released, Klarna began mounting distrust of Escobar's company and stopped sales via its platform, stating “ethical reasons” as its explanation for doing so.
“We have terminated the store’s agreement with reference to our ethical guidelines,” Klarna told Gustafsson’s Swedish lawyer in an email.
Klarna’s side of the story
According to Klarna, it denied the money on the grounds the funds needed to be kept for refunds as the customers were reportedly not being sent the phones.
“A central part of our offer to the end-consumer is that if a trader does not send goods by agreement, it should not affect the consumer,” said Klarna in a statement to Sifted.
Klarna is supported by a multitude of would-be customers who spent $399 on the illusive Escobar Fold 2 who claim to never have received their phones. The news has attracted a lot of attention in Sweden.
“Please don’t buy the foldable phone from Pablo Escobar’s brother. You’re almost certainly getting scammed,” PCman.com tells readers.
Escobar Inc’s shady foldable phones
In February 2020, Escobar Inc. began advertising re-skinned Samsung Galaxy Folds (originally £1,500) for £300. Unsurprisingly, the Escobar Fold 2 attracted a lot of YouTube attention.
“There are huge, huge amounts of Fold 2 telephones available to us for purchase at a very low cost in Shenzhen, Mainland China,” CEO Olof Gustafsson told PCMag. “Our delivery partners have confirmed our access to easily over 200,000 units at an incredible per unit cost.” This is despite the Galaxy Fold costing Samsung £500 to manufacture.
Due to arrive in March, the majority of customers were claiming their phones had not arrived, with no response from the company despite repeated complaints. Escobar Inc. claimed the delay was caused by the company’s focus on buying unwanted Galaxy Fold phones from China.
However, several high-profile YouTube stars received their phones promptly, suggesting the Escobar Fold 2 was primarily a coverage ploy. YouTube celebrity and smartphone reviewer Mrwhosetheboss received a phone under his YouTube name, despite applying as an anonymous customer. He also proves the phone is a re-labelled Samsung Galaxy Fold using software benchmarking tool AnTuTu.
Instead of receiving their order, many buyers were sent a biographical book of Roberto Escobar’s life titled “I Made Billions Selling Coke Now My Smartphones Will Destroy Apple and Samsung”. Many claim that the books were sent as proof of order delivery to manipulate fintechs Stripe, CCBill and Klarna to release funds.
All three fintechs have now severed ties with Escobar Inc. The company now only accepts direct bank transfers to the Escobar Inc. website.
Escobar Inc’s tall tales
The Escobar Fold 2 is far from the first case of scam allegation faced by Escobar’s company. In 2019, Escobar Inc. marketed a propane torch as a flamethrower and later accused Elon Musk’s The Boring Company of intellectual property theft with its “Not A Flamethrower”.
The last update was Escobar inc. asking for a £100m cash settlements or Tesla shares. Escobar’s flamethrower also largely failed to arrive, with customers receiving a certificate of ownership for the company to use as proof of shipment.
In 2016, Escobar Inc. demanded £1bn from Netflix for unauthorised use of content in its series Narcos. An undisclosed amount was settled out of court. The company has also allegedly sued Apple for £2.6bn, despite selling a refurbished version of the iPhone 11 Pro earlier this year.