The Weird, Wild Saga of Gizmondo, Part 4: Retribution for a Thief

The Torpedo attacks, and Gizmondo takes a hit.

Gizmondo Scandal
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In 2006, a Ferrari Enzo was destroyed in a mysterious accident in the Malibu hills. The ensuing investigation revealed the involvement of Bo Stefan Eriksson and Carl Freer, whose startup gaming company, Gizmondo, would lose over $380 million in an unprecedented scam that burned investors from London to Los Angeles.

Part 4
The Weird, Wild Saga of Gizmondo

"Gizmondo ran like a normal company,” explains 'James.' “It had Human Resources, a financial department, R&D, etc. But there was a core group of people who all worked outside that circle. If there was a problem in a normal company, Human Resources would handle it. But we were all outside of that; there were people that were technically higher in the company structure than someone like, say Bally [Singh] or Peter Uf, but they really couldn’t say anything to them. If Bally offended them or did something they didn’t like, they would have to talk to Carl, who in the end wouldn’t do anything."

James, a Gizmondo insider, adds, “We were outside HR’s jurisdiction. And that caused quite a bit of resentment in the company because we were above the law, really.”

One such story of above-the-law business tactics involved venture capitalist Joe Martin, who, although not one of the inner circle, came closer than a regular investor. “At the time, I couldn’t really quite understand the mix, because Martin was sort of dweeby, and then you’ve got massive Stefan, really bling-bling, and Carl the smooth businessman,” remembers Horgan-Wallace of meeting the trio that first night in London. “I just didn’t understand why they were all working together, because Martin just looked so out of place. But when I went to his huge mansion, it sort of all fell into place.”

Of course it’s clear what Carl and Stefan saw in Joe Martin: he was one of the richest men in the United Kingdom, with access to a wealthy client base.

Martin became a major player whenever Gizmondo did a stock placement—conservative estimates place at least one-third of all investment monies coming directly via Martin. Unfortunately for him, Stefan and Carl discovered that Joe had allegedly been skimming above his 15% fee, which is a transgression not taken lightly in the Gizmondo organization.

Driven into a blind rage, "Torpedo" plowed his turbo-charged Dodge SRT-10 pickup truck straight through the store’s plate glass window.

“When it got found out, he was brought into the office with Stefan, Carl and this guy named Torpedo, and they sat him down. He was sweating profusely, and at first tried to deny everything. But they had no patience for that, and Torpedo slapped him around real good,” claims James. “They didn’t do anything too crazy, because if you’re in an office with 3 big guys—Stefan’s big and Torpedo’s massive—there’s not much you have to do… Martin ended up coming forth and said he had cancer, crying, and they were really lenient on him. All they said was to give them back what he stole, and return all their stocks, and they’d let him go. Supposedly, they never got the money though — he ran back to Ireland and put a lawsuit on them to stop that.”

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The man they call Torpedo is Johan Enander, who got the name because he was a shaven-headed, 6’8” giant built like a 2-ton warhead. He rose in reputation alongside Stefan in the Uppsala Mafia, where he excelled in the bloody field of underworld debt collection. Despite convictions in Sweden for extortion, among other things, Enander was placed as Head of Security for Gizmondo Europe Ltd. His measures of exercising security, however, knew few legal bounds. Reputation tells of a motorist who made the mistake of cutting him off in London and then giving him the finger, so Enander chased the man down to a red light, got out of his car and smashed the driver’s window, dragging him out through the glass and beating him in public.

“He got away with that, too,” says James. Enander wasn’t always so lucky, however, as brains weren't his forte (when ordering six hardboiled eggs for breakfast, he would famously hold out five fingers). Another time, he reportedly bought an antique desk from a dealer on Kings Road, and when he changed his mind and decided to sell the desk, he discovered the dealer had sold him a fake. Defrauded, Enander allegedly enacted his own form of financial restitution.

“He did a lot of steroids and cocaine, so he’d fly into rages. This time he got so mad, you just had to get out of his way,” explains “Anthony,” a Gizmondo marketing executive. Driven into a blind rage, Enander plowed his turbo-charged Dodge SRT-10 pickup truck straight through the store’s plate glass window. With the massive truck jammed inside the store, he was easy pickings for the police. When they arrived, he claimed that he’d lost his brakes.

Don’t believe the hype

The Gizmondo console launched in Europe on March 19, 2005, to frigid critical reception. The main complaints included a lack of interesting games (titles included barnburners like It's Mr. Pants, Colors and Momma Can I Mow The Lawn), poor playability, flimsy design, and an outrageous price tag of $400 (compared to $249 for Sony’s PSP). To gin up interest, and keep the stock price stable, Freer and Eriksson commissioned Singh to assemble a reverse call center. Singh enlisted a crew of 10 people and holed them up in a conference room at the Lakeside International Hotel in Frimley Green. Instead of servicing customers, however, the call center pretended to be customers, and for almost two weeks Singh’s team called every store in England that might carry the Gizmondo to request it—from boutique toy stores to major retailers like Dixons and Harrods.

“It wasn’t like a call center should be run,” recalls Hanish Godhania, a caller recruited by Singh directly. “The room wasn’t that big, and there were about 10 of us in there all day long, making about a thousand calls a day. It was very tedious work, and if anyone got out of line, or started groaning, Bally would go nuts and just fire people; he was quite volatile.”

Now a promoter and event coordinator, Godhania was at the time only 23 years old. But he was a hard worker, and his hustle was rewarded: Singh enlisted him in a crew of five who were loaded into a van and driven across the British Isle, buying up whatever retail stock they could find.

“We went to Birmingham, Manchester, Sheffield, everywhere,” Godhania says. “If we found a store that actually had any, I’d purchase one then send someone else an hour later to buy another.” The result was a confusing white noise of hype: Demand for Gizmondo appeared to skyrocket while legitimate customers had a hard time actually finding one. Meanwhile, very few units had been delivered, mostly because Freer and Eriksson didn’t have the cash to pay suppliers. The truth is, Freer knew the product was mediocre and wanted to avoid the gadget getting into the sweaty palms of Johnny Gameplayer.

As the console was repeatedly eviscerated on gaming forums by the few who actually got to play one, the machines had to stay scarce to keep the con running. “Going into it not knowing it was a big scam as I do now, obviously I thought it was very weird we were hired to pay retail for the company’s own product,” notes Godhania.

The walls were starting to close in on Gizmondo. Tune into Part Five tomorrow, when sharks literally start circling.