PepsiCo and Coke Collaborate to Foil Trade Secrets Scam

07 July 2006

A letter demanding cash in return for "very detailed and confidential" information about Coca-Cola and an unidentified new product landed on the desk of an executive at PepsiCo, it was revealed Wednesday.

PepsiCo, however, promptly told its rival of the offer and Coke informed the FBI. The letter's writer and two other suspects were put under surveillance, culminating in a classic sting in which in three Coke employees - Joya Williams, Ibrahim Dimson and Edmund Duhaney - were arrested.

Covert video footage filmed at Coke's headquarters allegedly shows Williams rifling through corporate files and stealing documents and a sample of a yet-to-be launched Coke drink.

Later, another of the conspirators attempted to sell the documents for $10,000 and the product sample for $75,000 to an undercover FBI agent, posing as a PepsiCo intermediary. The employee subsequently struck a deal with the federal plant to buy additional trade secrets for $1.5 million.

Growled US Attorney David Nahmias: "Theft of valuable trade secrets will not be tolerated, not by the Justice Department and not even by competitors, as this case shows." He praised the two global rivals for their co-operation with the investigation.

"We only did what any responsible company would have done in the same circumstances," said a Pepsi spokesperson. "Competition can be tough but it must always be fair and legal."

In a public memorandum Coca-Cola ceo Neville Isdell expressed his "sincere appreciation" to PepsiCo for alerting the company to the attempted crime. "Information is the life-blood of the company. The breach of trust . . . is difficult for us all to accept . . . and underscores the responsibility we each have to be vigilant in protecting our trade secrets."

Williams (41), an executive administrative assistant at Coca-Cola's Atlanta headquarters, has been charged with wire fraud and unlawfully stealing and selling trade secrets. As have her two accomplices Dimson (30) of New York, and Duhaney (43) of Decatur, near Atlanta.

Data sourced from Financial Times Online; additional content by WARC staff