When former Gizmondo executive Stefan Eriksson wrecked his million-dollar Ferrari on the Pacific Coast Highway last month, it simply seemed like a fitting metaphor for the death of his hapless handheld - the destruction of one expensive piece of machinery to mark the end of another.
But what began as one helluva moving violation turned out to be merely another clue in the first great gaming scandal of 2006.
Playing out like a B-movie screenplay, the complicated twists and turns of this story extend far beyond the crash itself, bringing to light a multi-million dollar scam masquerading as a handheld gaming platform and the mafia masterminds who managed to walk away from both wrecks seemingly unscathed.
Far be it from GR to get all investigative - we're more prone to study polygons than the facts of a legitimate crime - but after being directed by Kotaku.com to this piece at the LA Times website, we inhaled all we could about the bizarre circumstances surrounding the crash itself and figured it was worth some sort of explanation.
As best we can currently surmise, this is the story of Gizmondo's explosive burnout.
The Big Bang
According to the Times piece, on February 21 Stefan Eriksson and a man known only as "Trevor" were driving a limited-edition Ferrari Enzo down the Pacific Coast Highway in Malibu, California at a relaxing 165 mph. As luck would have it, they hit a bump in the road and flew into a concrete utility pole, ripping the car in two. In spite of being in a wreck estimated to have left a streak of debris as long as a football field, both men emerged relatively unhurt, though Eriksson suffered a cut lip. Trevor reportedly flagged down a passing car and asked to use the driver's cell phone.
When police arrived at the scene, Eriksson claimed he was merely a passenger in the Ferrari, which was actually being driven by a German man he knew only as "Dietrich." According to Eriksson, the two had been racing a Mercedes SLR at the time of the crash, after which Dietrich fled on foot. Trevor claimed to have been a passenger in the Mercedes, which he said also fled the scene.
Minutes after police arrived, two men flashing badges and claiming to represent Homeland Security showed up, asking to question Eriksson and Trevor. Police allowed them to do so, and eventually the two "agents" left with Trevor, but not before he provided police with a home address. Police also released Eriksson, who currently faces misdemeanor charges of driving under the influence (his blood alcohol level at the scene was .09%) and providing false information to police officers pending the match of a DNA swab to blood found on the Ferrari's driver-side airbag.
To further complicate matters, police are certain there was no Mercedes involved whatsoever (although Eriksson does own a Mercedes SLR that Scotland Yard has listed as stolen) and have yet to turn up any man named Dietrich.
It only gets creepier. The good samaritan who initially stopped and lent Trevor a cell-phone suddenly discovered a loaded glock magazine stuffed behind the seat of their car. Meanwhile, the authorities were shocked to find that the home address Trevor supplied to the cops turned out to be the boat slip for a $14 million dollar yacht that presumably went out to sea with Trevor onboard. According to this article in the Malibu Times, the owner of the yacht is none other than Carl Freer, former director of Gizmondo Europe and business associate of Stefan Eriksson.
So what does any of this have to do with a quirky handheld that seemed to haphazardly step into the ring with Sony and Nintendo before getting unceremoniously knocked out of it? As it turns out, quite a bit.
It has since come to light that the whole Gizmondo enterprise was little more than a well-orchestrated scam that bought Ericksson, among other things, the Ferrari he crashed and the yacht on which Trevor escaped. What seemed like a retarded handheld was really a Swedish meatball concocted by some very clever, and now very rich, Swedish chefs. Those guys are everywhere...
This gameindustry.biz article outlines several of the interesting coincidences that lined the pockets of Freer, Eriksson, and other Gizmondo employees. Our personal favorite is the maneuver in which Gizmondo paid Northern Lights (a company owned by Freer and Eriksson) $3.5 million to develop the games Chicane and Colors, even though those games had already been developed by Warthog and Indie studios, both of which were owned by Gizmondo Europe. Also notable are $100,000 luxury car allowances granted to various Gizmondo employees. Is it too late to apply for a job?
Pretty much. Gizmondo's parent company, Tiger Telematics, was getting hammered to the tune of $321 million in losses between Septembers '04 and '05, as shown by this income statement. Although the Gizmondo execs were very careful about maintaining the illusion of legitimacy, spending millions to commission games from EA and "game concepts" from Games Factory (including Typing Tutor, even though the Gizmondo lacked a keyboard) and producing actual Gizmondo handheld units (we have one here at GR), this obviously wasn't a company built to last. It was built to be looted, and left to die.
Gizmondo Europe, Ltd. hit the mat like a mafia-backed fighter, and in the same motion sucker-punched investors out of hundreds of millions of dollars. The only thing this story is missing are the mafia backers, but according to this fascinating article, they aren't missing at all.
In fact, at least one of them was in the car.
Meet two members of the Swedish Uppsala Mafia: mastermind and money launderer "Fat Stefan" Eriksson and collector/enforcer Johan "The Torpedo" Enander. Eriksson, as you may recall , is the Gizmondo executive who crashed the Ferrari, while "The Torpedo" was most recently employed as Gizmondo's head of security after serving six years in a Swedish prison on a blackmail and assault conviction. What, did you think the Gizmondo was here to amuse you?
Apparently, Swedish news source Aftonbladet tried to warn the world of Eriksson's and Enander's mafia connections - Eriksson was sentenced to ten years in Swedish prison for a $3 million scam in 1993 before escaping to the United States - but no one could figure out what they were saying since no one outside of Sweden reads Swedish. Except for someone at Gizmodo.com, because they have a translation of the story you can read here.
Like a burning Ferrari, Eriksson rode Gizmondo to a fiery halt, exiting rich and seemingly untouched by the flames.
Well, perhaps not entirely. While the following is surely conjecture, it's suspected that one of Eriksson's future schemes may have disintegrated in the crash along with his Ferrari.
Remember the two "Homeland Security" agents who questioned Ericksson and Trevor at the beginning of the story? The Malibu Times reports that the badges they flashed were issued by the San Gabriel Valley Transit Authority, which, it turns out, is a privately-owned shuttle service based in Monrovia, CA. that transports handicapped and elderly patients to and from appointments.
It all sounds pretty innocent...until you stumble across an entry in their press releases announcing the selection of Philip J. Sugar as their new police chief. The website for the Transit Authority PD claimed (before they took it down - follow the link for a cached version) to have an entire police force and anti-terrorism unit with officers "on the front lines, playing a vital role in the defense of Southern California’s homeland security."
Much like Gizmondo, the SGVTA has an impressive front, including this flashy .gov website, but in reality their only base of operations is a garage in Monrovia called Homer's Auto Service. The "police dispatcher" for their "Police Department" actually doubles as the receptionist for the auto repair shop. Now that's multi-tasking.
That's right - a small shuttle service that takes the elderly to doctor's appointments in Malibu, of all places, apparently requires a private police force. Are we that worried about old, rich, white terrorists? Oh wait... In all fairness, those guys don't take the bus.
So how is Stefan Eriksson involved with the fictional anti-terrorism unit of a bus line for the handicapped? According to this article on whittierdailynews.com, Transit Authority founder Yosuf "Yo" Maiwandi claims that the Transit Authority was going to launch a program to get funding from government agencies for surveillance technology developed by Eriksson. Presumably, they wouldn't have mentioned to the government that the only people they'd be watching with all that grant money would be some paraplegics on a bus. But according to Maiwandi, this plan to get their hands on our tax money might now be in jeopardy because of Eriksson's bad driving, er passengering. "Now this guy crashes his car and everyone wants out," Maiwandi told the Whittier Daily News.
It's probably too late to pull the ripcord, however. Though the investigation is ongoing - we still don't know who Trevor was, why he hid the glock magazine or whether the San Gabriel Valley Transit Authority's plans are as shady as they seem - it's pretty clear that the folks behind the Gizmondo have been anything but clean. Besides, we have some Doritos and Mountain Dew that need interrogating. But if you'd like to try piecing the puzzle together yourself, you're welcome to take a crack at our handy-dandy flow chart of all the players and pieces involved in this game gone wrong. We'll be updating it as more facts come out, so be sure to check back.
April 17, 2006 - We've got more on this story, an updated flowchart, and investment tips right HERE.
Click to enlarge!