Earlier this year, executives at Pepsi headquarters in New York received a letter from Coke, but the official envelope was postmarked in the Bronx, not Atlanta, where Coke is based. The letter was from someone identifying himself as "Dirk" and claiming to be a high-level employee with Coke. He was offering "very detailed and confidential information" for a price. On May 19, 2006, Pepsi executives contacted Coke executives and turned the letter over to them. Coke then contacted the FBI and an undercover investigation was launched.
A Coke spokesperson says that the secret recipe for Coke's flagship soda was never at risk, but that they're going to review their security procedures anyway. While many confidential papers and even a secret product sample exchanged hands, they were all related to products other than Coca-Cola.
The "Dirk" in the initial letter turned out to be New York resident Ibrahim Dimson, 39, according to prosecutors. They say that he was supplied with information and a future product sample by Joya Williams, 41, an executive assistant with Coke from Norcross, Georgia. Edmund Duhaney, 43, from Decatur, Georgia, was also charged today as part of the scheme. All three suspects are expected to appear before a federal judge in Atlanta today on charges of wire fraud and unlawfully stealing and selling Coke trade secrets.
In the six weeks since the FBI was contacted, "Dirk" provided the FBI with 14 pages from Coke marked "Confidential" and "Classified," which the company identified as containing Coke trade secrets. "Dirk" asked for $10,000 for the documents, but of course he was dealing with FBI agents, not Pepsi employees as he expected. The FBI talked "Dirk" into accepting only $5000 for the documents, and also to agree to provide more—along with a product sample for an unreleased product—for another $75,000. He exchanged that sample and those papers for $30,000.
On June 27, 2006, the FBI agreed to pay "Dirk" $1.5 million for more Coke trade secrets. That same day, a bank account was opened with Dimson and Duhaney's names and Duhaney's address, according to prosecutors. The prosecutors also have video surveillance tapes showing Williams collecting papers and a product sample at Coke headquarters. Williams' supervisor's email account was used for some communication between "Dirk" and the FBI as well.
Yesterday was the day the $1.5 million exchange was to take place, but instead the FBI arrested all three people believed to be involved in the scheme.
Coke has not identified the executive for whom Williams worked, but they did thank their rival Pepsi for turning over the initial letter.
Pepsi really had no choice but to turn over the letter, for a million different reasons, but it will be interesting to learn how much time passed between their receipt of the letter and May 19, when they turned the letter over to Coke.
Based on the prosecutor's description, the case seems very strong indeed, with hard evidence linking each of the three to the scam. Williams is apparently tied to the case via both email and video evidence, while Dimson physically met with FBI agents and turned over information and sample, and Duhaney is linked in through the bank account, which presumably involves his signature. The defense case ought to be interesting.
Article comments
1 - Matthew T. Sussman
Hot damn Phillip, you're on a writing roll this week. What's the occasion?
2 - Phillip Winn
It's vacation-time, so I have more time. I really love writing, and this week has made me realize just how little (read: none) of it I do anymore. The E-Myth writ large, I guess. :-(
3 - Dawn
Pepsi really is God-awful. I even have a theory about it; trailer parks, welfare, wife beaters and women with over processed hair and too many kids seem to prefer Pepsi to Coke.
It must be a legal replacement for meth.
4 - Phillip Winn
Some people prefer sweet drinks like Pepsi to bitter drinks like Coke.
5 - Jared
Well, I'm none of the above and personally have a preference to pepsi, all be it a small one. But hey, I liked the humor.
6 - elfmajic
Been a Pepsi drinker all of my life... and I always will be....
7 - Pedro
Pepsi for life!!!!! Jenna Jameson too!
8 - Michael J. West
Ewww. Pepsi? Gross. Coke 4 life!
9 - Nancy
Moi, I don't like ANY kind of cola. I will also be interested to see how much time elapsed before Pepsi reported this. I'd LIKE to think this is a case of actual honor & ethics, but a tiny little corner of my mind says, 'you fool....'.
10 - TJ
While I prefer Pepsi over Coke, it is refreshing to know that some Coke drinkers are very immature and make ridiculous theories and unfounded generalizations about people who prefer Pepsi. At one time, Coke used cocaine as an ingredient in their drink maybe this individual drank a few of those cans.
11 - duane
I like all sodas (except that diet stuff) -- Coke, Pepsi, Mug root beer, Mountain Dew, Sprite, Fanta orange, 7Up, Dr. Pepper -- oh, yeah, bring 'em on.
Next up: Brussels sprouts or Lima beans - what does your preference tell people about your personality?
12 - Mr. Real Estate
I prefer Pepsi's non-soda drinks, like Gatorade and Aquafina, to Coke or Pepsi. Ironically, most of Pepsi's money is made from the non-carbonated beverages, and they have a stronger future than Coke because of them.
13 - Levi Andrews
I usually do not post in these things as I usually do not have the time, but I just wish to express my utter disgust at the comments made by Dawn, July 6, 2006, 08:06 PM.
Although everyone is intitled to their opinions, a comment so openly 'classist' and unbased in any fact or figure (or any concievable logical thought process at all) and in such poor taste is truly not welcome. I believe that this comment should be removed by the editors, and reflects poorly on this Netscape service.
14 - Dawn
Look, it's my personal observation that "some" Pepsi drinkers fall into that category, and by some I mean most I have ever encountered in both my personal life and my consumer life. This obvious generalization doesn't mean every human who drinks the cloyingly sweet Pepsi is a drugged out meth user.
DUH!
Coke isn't bitter, it's merely more tart and crisp. It gives one the impression that the carbonated beverage they are consuming isn't going to bore a hole in their teeth with cavity bugs the minute it enters your mouth.
But see, I am a water drinker so I don't really care about soda either way.
I do so enjoy the way people get all hot and bothered by some knucklehead's obvious fun-poking. For shame!
15 - Goatroper
Goats are cool. Goats that drink Pepsi are really cool.
16 - alessandro nicolo
I'm still laughing at the goat guy. I'm a little late on this but what about Dr. Pepper? Always overlooked. So sad. Good piece.