IT has been described as “the most fabulously preposterous LA traffic accident” since the Oscar-winning movie Crash. The facts explain why: in February a disgraced Swedish video games executive with close ties to Britain crashed a $1 million (£575,000) red Ferrari Enzo, one of only 400 made, into an electricity pole while racing along the scenic Pacific Coast Highway in California at up to 162mph.

Detectives investigating the case later discovered that the driver, Stefan Eriksson, 44, had served a prison sentence in Sweden for counterfeiting; that he had presided over the collapse of Gizmondo, a video games company, with more than $200 million of debt; and that he had imported another two exotic cars from Britain, which were being stored at his gated mansion in Bel Air.

Other titbits leaked out: the alleged videotape of the crash, shot from inside the Ferrari’s cabin; the mysterious German called “Dietrich”, who was supposedly driving the supercar when it crashed and who mysteriously fled into the hill; and the two — possibly bogus — Department of Homeland Security agents who rushed Mr Eriksson away from the scene of the crime.

The police are also keen to find out why a Glock ammunition magazine had been discarded near the car’s wreckage.

Meanwhile, Carl Freer, the chief executive of Gizmondo, has been served with a writ claiming £500,000 from Manches, his London solicitors, for “advice and professional services”. During its brief existence Gizmondo spent £150 million on salaries and perks, paying executives £1 million salaries, buying a modelling business, a fleet of cars and a racehorse.

But losses of £200 million mounted, and with the product — a £130 hand-held computer game console, which investors were told would take on the might of Sony and Nintendo — generating £1.5 million, the company was placed in liquidation barely a year after Sting performed at its glitzy Park Lane launch.

The answers to the motoring riddle may soon be on their way: Mr Eriksson was arrested at the weekend on charges of “grand theft” at his Bel Air home, after having allegedly failed to make payments on two Ferrari Enzos — one of which was the crashed vehicle — plus a rare Mercedes-Benz SLR McLaren, which was seized from Mr Eriksson’s wife while she was shopping. All the cars — together worth more than $3.6 million — are thought to be owned by Royal Bank of Scotland, Lombard and Yorkshire Bank, which, even before his arrest, were trying to trace Mr Eriksson with the help of private investigators.

They were leased to Gizmondo at a cost of £2 million a year and were not registered for road use in the US. When the payments lapsed, the banks sought to repossess the cars.

“This is the beginning of the investigation,” said Steve Whitmore, spokesman for the Los Angeles County sheriff’s office. “All three cars have now been confiscated.”

Detectives are now asking if Mr Eriksson imported the cars via San Diego illegally, and whether they were paid for with his annual $104,095 car allowance from Gizmondo, revealed last year by The Times.

Mr Whitmore added that additional charges could be brought, because Mr Eriksson is still under investigation for crashing the Enzo while intoxicated. Blood from his cut lip — remarkably his only injury from the 162mph crash — is being matched with blood on the Ferrari’s driver-side airbag. Mr Eriksson has been denied bail while his visa status is investigated.

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