Thursday, July 6, 2006

Three Arrested in Atlanta For Trying to Sell Coke Trade Secrets to Pepsi for $1.5 Million

The FBI arrested three people in Atlanta for trying to sell Coca-Cola Co. trade secrets to its chief rival, PepsiCo, for $1.5 million.  The trade secrets did not include the secret formula for Coke, which is perhaps the company's most closely-guarded information.  Coke once even defied an order by a U.S. District Court judge that it turn over the formula in discovery related to a lawsuit with a group of its bottlers in the 1980s.  The information involved 14 pages of documents related to products and their packaging. The three defendants are Joya Williams, who worked for Coke as an administrative assistant, Ibrahim Dimson, who masqueraded as "Dirk" in making the contact with Pepsi and then dealing with an undercover FBI agent after Pepsi contacted the authorities, and Edmund Duhaney.  According to a press release (here) issued by the U.S. Attorney's Office for the Northern District of Georgia:

"Dirk" provided to a FBI undercover agent 14 pages of Coca-Cola logo-marked "Classified - Confidential" and "CLASSIFIED - Highly Restricted" and the company confirmed that these documents were valid and highly  confidential and were considered highly classified proprietary information-trade secrets. Almost immediately, "Dirk" requested $10,000 for the documents sent as proof, emailing, in part, "I must see some type of seriousness on there part, if I'm to maintain the faith to continue with you guys, or if I need to look towards another entity that will be interested in a relationship with me. I have the capability of obtaining information per request. I have information that's all Classified and extremely confidential, that only a handful of the top execs at my company have seen. I can even provide actual products and packaging of certain products, that no eye has seen, outside of maybe 5 top execs. I need to know today, if I have a serious partner or not. If the good faith moneys is in my account by Monday, that will be an indication of your seriousness."

Later "Dirk" produced other documents that Coca Cola confirmed were valid trade secrets of Coca Cola and highly confidential, and was to receive $5,000 for the documents received as good faith money for additional purchases. "Dirk" also agreed to an amount of $75,000 for the purchase of a highly confidential product ample from a new Coca Cola project.  Meanwhile, with the cooperation and assistance of Coca Cola security personnel, video surveillance showed JOYA WILLIAMS at her desk going through multiple files looking for documents and stuffing them into bags. She also was observed holding a liquid container with a white label, which resembled the description of new Coca Cola product sample before placing it into her personal bag. Coca Cola later verified the sample was genuine and is in fact a product being developed by the company.

According to the press release, the FBI paid "Dirk" $30,000 in cash hidden in a Girl Scout cookies box -- how cute -- and on June 27 Duhaney and Dimson opened a bank account using Duhaney's address to have the $1.5 million deposited into it from the sale of all the trade secrets.  The three defendants were arrested on July 5, the day the final transfer was to take place.  The three defendants were charged in a criminal complaint with wire fraud and theft of trade secrets, and the case will likely move to an indictment detailing a variety of charges in the next few weeks. (ph)

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Fraud, Prosecutions | Permalink

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