ATLANTA, Georgia July 6, 2006 – Three people have been arrested on charges of offering Coca-Cola secrets to rival Pepsi for $1.5 million, federal prosecutors have said.
The FBI began an undercover sting after Pepsi informed Coke it had received a letter from someone claiming to be a Coke employee, offering “very detailed and confidential information” about products being developed, according to David Nahmias, the U.S. attorney in Atlanta.
“Phone records and further investigation allegedly showed the source of the information was Joya Williams, an executive administrative assistant at Coke in Atlanta,” Nahmias said on Wednesday.
The 41-year-old Williams was arrested along with Ibrahim Dimson, 30, of New York and Edmund Duhaney, 43, of the Atlanta suburb of Decatur, Nahmias said.
All three are charged with wire fraud and unlawfully stealing and selling trade secrets from The Coca-Cola Company.
They will have an initial court appearance before a magistrate Thursday, he said.
“Theft of valuable trade secrets will not be tolerated, not by the Justice Department and not even by competitors,” Nahmias said
Neville Isdell, Coke’s chairman and CEO, said the company is reviewing its security procedures in the wake of the arrests.
“While this breach of trust is difficult for all of us to accept, it underscores the responsibility we each have to be vigilant in protecting our trade secrets. Information is the lifeblood of the company,” he said in a letter to employees.
Isdell also thanked PepsiCo officials for alerting their competitor “to this attack.”
A Pepsi spokesman said the company was glad to help.
“We did what any responsible company would do,” the spokesman said.
“Competition can be fierce, but it must also be fair and legal.”
Dimson, using the alias “Dirk,” allegedly sent the initial letter to Pepsi using an official Coca-Cola envelope on May 19. He later gave an FBI undercover agent 14 pages of Coca Cola documents marked “Classified – Confidential” and “Classified – Highly Restricted,” according to Nahmias.
Coke officials confirmed the documents were tightly held trade secrets, he said. “Dirk” then requested $10,000 for the initial papers, accompanied by a letter promising to provide further documents on request, Nahmias said.
“I can even provide actual products and packaging of certain products, that no eye has seen, outside of maybe 5 top execs,” the letter states.
“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.”
“Dirk” provided other documents to the FBI for $5,000 and agreed to take $75,000 for a highly confidential product sample from a new Coca-Cola project.
A surveillance camera placed in Williams’ office videotaped her “going through multiple files looking for documents and stuffing them into bags,” Nahmias said.
“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,” he said.
On June 16, a FBI undercover agent met with Dimson at Atlanta’s Hartsfield-Jackson International Airport. Dimson handed over a bag containing documents marked “highly confidential” and a glass bottle with a white label containing a liquid product sample, Nahmias said.
The undercover agent paid Dimson $30,000 in $100 and $50 bills stuffed in a Girl Scout cookie box, he said. The agent also agreed to pay another $45,000 after successful testing of the product sample, he said.
After the exchange, agents followed Dimson as he drove to Duhaney’s home in Decatur, he said.
The three suspects were arrested July 4, the day they were supposed to be paid $1.5 million for the rest of the Coke secrets, he said.