The good life

THE GOOD LIFE: Bo Stefan Eriksson, on trial after a Feb. 21 crash in Malibu, poses with a racing car at the British Grand Prix in 2003. (Russell Batchelor / Batchelor/Sutton Images)

UPPSALA, Sweden — Before he shattered a red Ferrari in Malibu and became grist for Internet legend, Bo Stefan Eriksson ran a criminal gang in Sweden, raced cars in Europe, skippered a yacht called Snow White and helped run a video game company with dreams of taking on Sony and Nintendo, according to police and bankruptcy investigators.

Eriksson had a rap sheet and the fading charisma of an athlete past his prime, but one who was skilled at creating the aura of money and sinister chic. The arc of his triumphs and travails intersected with the ambitions of his partner, Carl Freer, a fellow Swede with a keen mind for technology and a confidence that captivated investors.

The two men were executives in Gizmondo Europe Ltd., a London-based company that developed a hand-held computer game that one industry writer described as having more gadgets than a Swiss Army knife. Gizmondo was abuzz with hype and promise. In March 2005, the launch party for the new game at the Park Lane Hotel was stocked with champagne, rhinestones, pearls, paparazzi and celebrities such as Busta Rhymes, Danni Minogue and Sting.

But beneath Gizmondo's flash ran the darker threads of corporate gambles, of technological innovation and ingenious ideas unhinged by mismanagement and greed, according to investigators and people affiliated with the company. Gizmondo went bankrupt in January, amassing more than $300 million in debt in its three years of existence, according to corporate records.

As the company spiraled and unpaid bills lined up, Freer and Eriksson headed from Britain to Los Angeles, leaving a trail of private detectives, bodyguards, $1,500-a-day lap dancers and millions of dollars worth of homes, cars, diamond watches and other accouterments of those who get rich quick. The tempest around Gizmondo's slide intensified in February with Eriksson's spectacular 162-mph crash of a rare Enzo Ferrari on Pacific Coast Highway.

Court-appointed liquidators are combing through thousands of pages of Gizmondo documents, but no one knows where all the money went, or how Eriksson and Freer transplanted their personal wealth and reinvented themselves in California. Financial investigators are also examining why investors and Gizmondo's parent company, the Florida-based Tiger Telematics Inc., were not aware that Eriksson was a felon, as were at least two other people connected with the company.

A Securities and Exchange Commission filing reveals that in 2004, Eriksson was paid a salary of $867,465 as a senior executive and $2.3 million in bonuses, stock awards and other compensation. Freer, Gizmondo's managing director, earned more than $1 million and received $2.4 million in stocks, bonuses and perks.

The company also took care of people close to its management: Freer's wife was a high-paid consultant for marketing and public relations. Another senior executive's girlfriend worked as a corporate secretary at Gizmondo and was paid more than $232,798 in salary and bonuses, given a luxury car and company stock then valued at $467,213, according to the SEC report.

"They've lost a hell of a lot of money, more money than most people see in a lifetime," said Paul Davis, a British liquidator investigating company records. He said between January and September 2005, Gizmondo took in about $2.6 million but lost more than $263 million. "They are staggering numbers by anybody's standards. It's clear the directors lived lavish lifestyles with fast cars, planes, boats and travel. But certainly that wouldn't account for all of it."

*

Charges Pile Up

The fates of Eriksson and Freer are also in question. Eriksson, 44, is in jail in Los Angeles awaiting trial on charges that include embezzlement, grand theft auto, illegally possessing a Smith & Wesson .357 magnum and driving while intoxicated. The counts arose from the Feb. 21 car accident and have become part a widening investigation into his activities after he entered the U.S. in August with two Ferrari Enzos and a Mercedes-Benz SLR McLaren, valued at $3.8 million and owned by British financial institutions. He had a lease contract on the vehicles, authorities said, prohibiting him from taking them out of the country.

Eriksson has pleaded not guilty. His lawyer, David Elden, said that Eriksson put down about $1 million for the three cars and was in negotiations to sell his British mansion to pay off the balance on the vehicles before he was arrested. Elden described Eriksson's case as a "non-injury accident being blown out of proportion because it involved a Ferrari."

Real estate records show that Freer, 35, moved to the U.S. about the same time as Eriksson. He was arrested April 26 by Los Angeles County sheriff's detectives on charges of impersonating a police officer to buy at least one gun. Police said they confiscated 12 rifles and four handguns from Freer's Bel-Air home and his 100-foot yacht docked at Marina del Rey.

The incident was not Freer's first criminal case.

In October, a court in Stuttgart, Germany, sentenced Freer to 18 months probation and fined him 200,000 euros for buying four luxury cars with bad checks and having them delivered to a dealership in France. The cars were ordered between 1999 and early 2000, and German authorities issued an international warrant against him. Freer contended that he had canceled a check after believing he was being sold stolen cars.

Los Angeles County sheriff's detectives are also investigating Freer's and Eriksson's membership in an "anti-terrorism unit" of the San Gabriel Valley Transit Authority, a small private company that provides rides for the disabled and elderly in Monrovia and Sierra Madre. Sheriff's deputies on Tuesday arrested the transit agency's founder and seized guns, badges and police cars from offices and homes connected with the company.

Freer declined an interview request from The Times. Instead, his public relations firm, Sitrick & Co., responded to written questions. It said Freer was interested in the transit operation in order to test facial-recognition technology in the agency's vehicles. Elden said Eriksson also wanted to use the authority's buses to demonstrate a video system he had hoped to market as an anti-terrorism tool.

Eriksson's alleged affiliation with the transit authority is a contrast to the glamour, chauffeurs and musky woods of his old neighborhood in St. George's Hill, one of London's most exclusive suburbs. Along the community's winding roads, Eriksson was known for his sleek cars and long parties.