Rumor: Gizmondo execs with ties to the Swedish mafia have resigned.

Source: Several online reports citing the Swedish daily newspaper Aftonbladet. The official story: See below. What we heard: It sounded too bizarre to be true, but at the same time ridiculous enough that nobody would bother making it up. The Monday edition of Aftonbladet reported that a round of...

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Source: Several online reports citing the Swedish daily newspaper Aftonbladet.

The official story: See below.

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What we heard: It sounded too bizarre to be true, but at the same time ridiculous enough that nobody would bother making it up. The Monday edition of Aftonbladet reported that a round of resignations swept through Gizmondo Europe after some employees' ties to Swedish organized crime had come to light.

The paper reported that more than 10 years ago, now-resigned Gizmondo Europe executive officer Stefan Eriksson was convicted of crimes in connection with the Uppsala Mafia, which got its name from the town where it based its operations. Two other employees also turned in resignations stemming from former ties.

No doubt the biggest resignation in the midst of all of this was that of Tiger Telematics cofounder and chairman Carl Freer, who co-owned third-party developer Northern Lights Software Limited with Eriksson. Northern Lights was paid a little more than $3.5 million to develop Chicane and Colors, two titles actually being developed in-house by Gizmondo Europe-owned studios. On September 29, Freer paid this money back to the company pending the outcome of an investigation into the transaction. The Northern Lights debacle is just the most notable in a series of shady payments and business arrangements detailed by the company in an SEC filing from last week.

Another SEC filing from the same day confirms the resignations, saying Eriksson left "to pursue a new entrepreneurial venture," while Freer "believes that the Company has passed the incubation stage where his entrepreneur skills are most effective," and also plans to pursue other entrepreneurial ventures.

With Freer gone, Michael Carrender, CEO of Tiger Telematics, will step into his role, while a decision has yet to be made regarding Eriksson's now-vacant position.

A Gizmondo spokesman today told GameSpot that the company first became aware of the allegations of mafia ties late last week, and that the company has "taken immediate steps to rectify the situation."

While Gizmondo does perform background checks on its employees, the spokesman said that typically background checks only go back as far as seven years, and so Eriksson's convictions of more than a decade ago wouldn't come up. As far as Freer is concerned, no allegations of mob ties have come up, and Gizmondo is currently unaware of any past criminal convictions for its cofounder. Interestingly enough, both Freer and Eriksson will keep their stock in the company.

Gizmondo's corporate site doesn't address any of this, but it does boast the increasingly apt slogan "Business as unusual."

Bogus or not bogus?: Not bogus.

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