- What does a Crashed Ferrari Enzo, a Swedish Mobster named Fat Steve and Chris Roberts Have in Common?
- In a chilly morning of February 2006, along a vacant stretch of road in Malibu, California, sheriff’s deputies were treated to a bizarre sight. A limited edition Ferrari Enzo, one of only four hundred in the world, had been shredded in half by a power line. The force of the crash was so violent that the engine was several hundred feet away from the passenger compartment. Miraculously, they didn’t find a body. The driver of the wreck was by the side of the road, seemingly unfazed by the crash. It seemed that the deputies’ bizarre night was over, that it was just another drunk millionaire who had crashed an expensive toy. That was until the driver claimed to actually be the passenger. The actual driver was a crazed German named Dietrich, who he had met in a bar the night before. They had been racing a Mercedes when the crash took place. Another witness confirmed the story, as he had been the passenger of the Mercedes who had gotten out to check on the Enzo when his own driver rudely sped off. Both the passenger of the Enzo and Mercedes claimed that Dietrich was intoxicated on cocaine and become extremely agitated, resisting all efforts to remain at the scene. He had run off to parts unknown, and both men were afraid to try and find him. When the police had asked for the name of Enzo’s passenger, he gave it. One Stefan Eriksson of Sweden. The American deputies didn’t give it a second thought. Swedish police would have had a different reaction. To them, he was known as Fat Steve, head of the Uppsala mafia.
- Like many places in Sweden, Uppsala was relatively crime free. It boasted the oldest university in Sweden, as well as being its religious center. Eriksson’s rise started off rather unimpressively, boasting convictions for petty theft and drug possession. He might have remained a petty thief, if there wasn’t one niche that could be easily exploited. Like all places, Uppsala had desperate people. And those desperate people sometimes took on debts that couldn’t be repaid. These people would then be referred to debt collection agencies. Typically, the worst that would happen would be harassing phone calls and letters. Eriksson’s established “Cannon Debt Collectors” in the early 1990s. His debt collection service operated a little differently. If you couldn’t pay with money, you’d pay with blood and bone. Violent crime is rare for Sweden, and perhaps that’s what made Eriksson so effective. He and his debt collectors were so successful at their jobs, Eriksson soon began to think of himself more than a mere thug. He branched out into the drug trade and dressed in expensive suits, holding business meetings in Stockholm hotels. He earned his other moniker, ‘The Banker’, by trying to defraud the Swedish Bank of nearly 22 million. Unfortunately for him, his successes in violent crime didn’t translate well to the white collar world. Eriksson and his associates were convicted and went to prison. But once released, he didn’t give up his debt collecting ways. He had destroyed a man’s house and threatened to kill him. Despite this, the man had Eriksson arrested. His reputation had grown so fierce, few of his other ‘clients’ were willing to testify against him. And their fears were not unfounded. Eriksson had tried to murder the head witness for the prosecution by blowing him up. Not once, but twice. Eriksson wasn’t convicted, but something had changed. Maybe it was the brush with prison again that made him try something other than violence. Perhaps he was content with the money he had made and would go into early retirement. Or maybe it was meeting a charming con man named Carl Freer.
- Laundering a car isn’t like laundering money. You can’t just bounce it around multiple places in the blink of an eye and bury it in such minutiae by the time police have realized what happened you are in a non-extradition country. That’s where Carl Freer came in. A literal used car salesman, he bought stolen cars, blended them on the lot and forged the right paperwork. Maybe Eriksson met him on the lot and recognized a fellow traveler. Or maybe Freer had heard of Eriksson and had a business proposition he couldn’t refuse. Regardless, Eriksson and Freer were joined at the hip. Freer wasn’t content being a lowly forger and con-man, and like Eriksson he held big dreams. And that included setting his sights on the gaming industry. Freer founded Tiger Telematics Incorporated and the new company found itself with a suspiciously large amount of capital along with a NASDAQ listening. It also found itself with Eriksson as an executive along with two of his long-time Debt Collector Associates. Now, after all this, you might ask yourself: What does Chris Roberts have to do with a debt collector psychopath and a literal used car salesman con man? It comes in the form of a little known device that is one of gaming’s biggest failures and frauds: Gizmondo.
- Today, the Gizmondo is mostly recognized by people misspelling the tech blog Gizmodo in Google or their address bar. But back in 2001, it was Carl Freer’s dream. An awful system he could convince naïve parents to buy, packed to the brim with ads that companies would pay him revenue for and produced for pennies on the dollar. It was the perfect scam and it was completely legal to boot. Freer’s idea was to use the device to take on the Nintendo and Sony hand-held systems in the UK. Maybe it would have worked. It was offering things that hand-held just didn’t do at the time, like a camera, Bluetooth and the ability to send SMS. It just had two fatal flaws. Freer had created it in response to the N-Gage and the capacity for those involved to not milk it for all its worth. The company spent money like water with no indication of any revenue. It bought a model agency and a UK Games developer named Warthog in early 2005. It acquired its subsidiaries and paid off its debt, incorporating its employees into Tiger Telematics. When the Gizmondo was finally released, it held a celebrity studded event at its London flagship store. Sting preformed there for a rumored 750,000 pounds. And why not? The company could afford it. During 2005 alone, the company had brought in nearly $300 million of investment capital. And it had just released its product on top of that. Some games journalists even predicted it would be a sleeper hit. What could go wrong?
- The Swedish press had been cautiously watching the Gizmondo story and bided their time, waiting until release to publish an article that revealed several of the executives had criminal ties and one was the infamous gangster known as Fat Steve. One of the executives even had an outstanding warrant in Sweden. It dug deep into the financials and found that $200 million of corporate funds went to bankrupt entities or corporations that never existed in the first place. As a consequence, the major arm of the company, Gizmondo Europe, declared bankruptcy. Despite collecting massive amounts of money, the company was actually operating at a loss since 2004 and was about $210 million in debt by late 2005, one month before the device itself launched. It cited ‘development costs’ and had given away shares to pay people instead of cash payments. Even with the massive amount of losses, the salaries of Gizmondo directors amounted to 6.6 million pounds for the nine months it operated in 2005. In addition to the expose that basically forced the entire upper echelon of the company to resign in shame, the device itself was a disaster. You could pay an exorbitant $500 for a Gizmondo or, if that was too expensive, pay $299 for one with ads enabled. It barely worked and the games themselves were awful. It sold less than 25,000 units. As a plus, since the hand-held itself was criminally defective, the ads were never displayed. Not selling nearly enough to repay its debts, the remains of the company were being picked apart by liquidators. And that all leads us back to Fat Steve, on a long stretch of California Highway with a German named Dietrich.
- Of course, there was no Dietrich and Eriksson’s story grew increasingly erratic. The mobster himself claimed that he was only going 60 mph, but it was later revealed that he was going nearly 200 mph. It also didn’t help that the police found no evidence of any race that occurred nor any Mercedes. In addition, he was quite clearly intoxicated along with claiming to be a member of Homeland Security. It wasn’t long before Eriksson’s story fell apart completely and his true identity revealed. He spent two years in prison in the United States before being extradited to Sweden where he served another 18 months for his part in the Gizmondo scam. And that, theoretically should be that. But the truth is stranger than fiction. Several years later, Chris Roberts would employ a company known as Cubic Motion to do motion capture work on Star Citizen’s single player module, Squadron 42. The CFO of Cubic Motion is Simon Elms, formerly of Warthog games, which was bought by Gizmondo in 2005. Elms also worked with Chris Roberts on Starlancer in 2000. In addition, several other Star Citizen employees worked for both Gizmondo and Roberts. Nick Elms was an Art Director on Starlancer, which Chris Roberts produced. He later went on to work on Gizmondo titles that were never released. Currently, he works for CIG Manchester as a lead on story content in Squadron 42. Star Citizen Executive producer Erin Roberts was the studio manager for Warthog games and continued that role in developing titles for Gizmondo. He has also been a collaborator with Christ Roberts since Wing Commander was released. Derek Senior, formally of Warthog, is now a lead developer on story content since 2013.
- But Gizmondo went bankrupt in 2006, what’s the big deal? Well, you might recall that there was some $200 million that went to defunct companies or companies that didn’t exist. In addition to Simon Elms being a financial director for Gizmondo after Warthog studios were acquired, he was also a director of a company called Virtual Poker Limited. The Gizmondo itself was only released with a handful of titles with more that were said to be in development, including casino and poker games. These were never released, nor were any screenshots seen. It is possible Virtual Poker Limited was one of these companies. It gets stranger, since 2006 was not the last gasp of the Gizmondo.
- While Eriksson was in prison, Carl Freer did not give up his dream of the Gizmondo. Except this time around, he realized it was too hard to actual come up with a working product. So he decided to fake it until he made it. At this point, Simon Elms and Erin Roberts were still employed by Tiger Telemetrics. Freer himself had reached an agreement between the Gizmondo liquidators for the intellectual property rights. A new company, Media Power, was set up in order to facilitate the proud re-launch of the Gizmondo and secure investor capital. Mikael Ljungman, co-founder of Gizmondo, traveled to China in February of 2008 to make sure the manufacturing set-up was complete. The re-release of the Gizmondo was set for September of 2008. However, at the same time Mikael Ljungman was supposedly going to China to secure funding, Virtual Poker Limited was quietly shuttered. September 2008 came and went, with no news of the Gizmondo re-launch. By December, Media Power was seemingly dissolved. In mid-2009, Mikael Ljungman was convicted of financial fraud and sentenced to prison in Sweden. Being the consummate con man, Carl Freer possessed other business ventures that eventually caught up to him. In 2010, the FBI pursued RICO charges against his shady business practices. He was never convicted, but he is still at it. This time, he’s working on a first aid company that uses aluminum to heal cuts. I hear he’s looking for investors and it will revolutionize wound care.
- As for Simon Elms, despite most information that he started working for Tiger Telemetrics in 2005, a company bearing the Gizmondo name was incorporated in 1997 according to public records. Also according to public records, Simon Elms was listed as director of Gizmondo Studios Manchester from 1998 to December of 2008, the last time the Gizmondo was ever heard from. It is entirely possible that Elms was working on the Gizmondo long before Warthog studios was ever acquired by Tiger Telemtrics. It isn’t a sign of impropriety, but it does ask more questions than one has answers to.
- In the end, it is all hearsay. People in the industry work with each other all the time. Bad projects happen. After all, it isn’t everyday a charismatic con man and a sociopathic leg breaker go into the videogame industry. Chris Roberts would surely want to bring people he’s familiar with onto his project. Though as time wears on and deadlines are missed and where the budget is being spent obscured, the comparisons to Gizmondo become hard to ignore. With the way things are going, we might see Chris Roberts sitting next to a crashed sports car, blaming a mysterious German for everything that went wrong.
dapperdan Oct 13th, 2015 3,406 Never
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