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3 accused of trying to sell Coke secrets to Pepsi

Written by: Staff

NEW YORK, July 6 (Reuters) Federal prosecutors charged three people on Wednesday with stealing confidential information from Coca-Cola Co. -- including a sample of a secret new drink -- and trying to sell it to rival PepsiCo Inc.

The three, who include an executive administrative assistant at Coke, were charged with wire fraud along with stealing and selling trade secrets. Federal prosecutors in Atlanta say the trio sought to sell the information in deals worth as much as .5 million.

Federal prosecutors said Coke learned of the theft from Pepsi, which provided the company with a letter from an individual claiming to be a high-level Coca-Cola employee offering ''very detailed and confidential information.'' ''We just did what any responsible company would do.

Competition can be fierce, but it also needs to be fair,'' Pepsi spokesman Dave DeCecco said.

On hearing from Pepsi, Coke alerted the Federal Bureau of Investigation, which began an undercover operation.

''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,'' Neville Isdell, chairman and chief executive of Coke, the world's largest soft drink company, said in a memo to employees.

Isdell said in the memo that no personal employee information was at risk and said he has ordered a review of Coke's information protection policies. He also expressed his ''sincere appreciation'' to PepsiCo, the No.2 soft drink maker, for alerting Coke about this security breach.

Coke spokesman Ben Deutsch said the closely guarded formula of Coca-Cola Classic was safe. He added that he wasn't aware of any similar security breach in the company that involved an investigation by federal prosecutors.

FORMULA SECRETS FOR SALE Following the undercover investigation, prosecutors named Ibrahim Dimson, 30, of Bronx, New York, Edmund Duhaney, 43, of Decatur, Georgia, and Joya Williams, 41, of Norcross, Georgia in the criminal complaint filed by the U.S. District Attorney for the Northern District of Georgia.

They said phone records and further investigation showed Williams, an executive administrative assistant at Coke, was the source of the information. Coke's Deutsch confirmed that Williams was an executive assistant to a senior manager but didn't reveal the manager's name.

Video surveillance showed Williams at her desk going through files in search of documents and stuffing them in her bags, prosecutors said.

She was also observed holding a liquid container with a white label, which resembled the description of a new Coca-Cola product sample before placing it into her personal bag, authorities said. The company later verified the sample was genuine.

''Coke is a highly ethical company with a culture of deep decency but every apple has a bad seed,'' said John Sicher, editor of trade magazine Beverage Digest. ''This is about one relatively low-level employee who, if the allegations are true, acted stupidly.'' According to prosecutors, on May 19 PepsiCo provided to Coke a copy of a letter in an official Coca-Cola business envelope postmarked from the Bronx. The letter was from an individual who called himself ''Dirk'' claiming to be a high-level Coke employee with confidential information.

During the investigation, ''Dirk'' provided an undercover FBI agent with 14 pages of Coca-Cola documents the company later identified as valid and highly confidential, prosecutors said.

''Dirk'' asked for ,000 for the documents and later agreed to be paid ,000 for the purchase of a highly confidential new product sample, prosecutors said.

The three were arrested the day a .5 million deal to sell other trade secrets was scheduled to take place, prosecutors said.

Reuters DH VP0750

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