BULL STREET - The art of the Con

General Motors and Volkswagon -“Trade” secrets

People that leave on company to go to work for a competitor are a dime a dozen. If they weren’t smart no one would want them. However, going to work for the competition and stealing the intellectual property of your former employer is a horse of a different color. On May 22, 2000, with great fanfare, the Department of Justice indicted Jose Ignacio Lopez de Arriortua, who was a Spanish citizen with “multiple charges of wire fraud, interstate transportation of stolen property and transportation of a victim of a scheme to defraud.

In reality, Lopez had probably been working for Volkswagen for years and when things became a tad to hot, he fled the coupe with whatever documents he still had in his possessions and went to work for the competition. When caught in the act and told to return the papers that he had stolen, Lopez along with his new benefactor shredded the entire group of papers and lied about what they had done.

The fact that Lopez both lives in Spain and holds their citizenship is a bit of a problem for the Department of Justice in that extradition in these types of cases in not that easy. Moreover, Lopez isn’t about to want to stand trail in the US. The tradeoff seems to be that of a rather nice life in Spain as opposed to 10 or more years in the slammer in this country. The Lopez theft of highly classified General Motors trade secrets was probably the most publicized theft of corporate information in history.

In spite of the fact that Lopez will probably remain free, as long he doesn’t break the laws in the country that has extradition treaties with the United States. Volkswagen attempts to sell a lot of cars here and we are certainly the largest automobile market in the world. In order top be able to continue business in this country, Volkswagen had to work out a face-saving deal with General Motors. The final deal was that Volkswagen would send General Motors check for $100 million and agree to purchase $1 billion worth of auto parts from a General Motors subsidiary.

That seems to be a rather pricy settlement and would tend to place a pretty high value on the stuff that Lopez got away with. However, this isn’t the first or last time that this is going to happen, it is just that so few of them are brought into the light of day.

 

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