DeLorean Faces Federal Fraud, Rackets Counts

A federal grand jury today indicted John Z. DeLorean on racketeering and fraud charges, alleging that he bilked investors in his failed car company out of $8.9 million, U.S. Atty. Joel M. Shere said.

The 15-count indictment charges DeLorean, 60, with racketeering and other federal crimes involving mail fraud, wire fraud, interstate transportation of stolen money, income tax evasion and causing false tax returns to be filed.

“I don’t know anything about anything on this,” DeLorean said when reached at his New York City apartment. He referred inquiries to Howard Weitzman, his attorney.

The grand jury charged that DeLorean made improper use of money that was supposed to be spent on research and development in connection with production of a racy, stainless-steel, gull-winged sports car named for him.

No Warrant Issued

“No arrest warrant was requested and an arraignment is tentatively scheduled” for Sept. 27, U.S. officials said.

The indictment came a little more than a year after the silver-haired DeLorean was acquitted by a jury in Los Angeles on federal cocaine trafficking charges. Prosecutors alleged that he entered a drug deal in a desperate attempt to save his company.

The indictment specifically asserts that $8.9 million was transferred from Pierson Bank in Amsterdam, to DeLorean’s personal account at Citibank in New York.

The former General Motors Corp. executive founded the DeLorean Motor Co. to build cars at a plant in Northern Ireland, but sought protection from creditors in 1982 under Chapter 11 of the Federal Bankruptcy Act. The case was later converted to liquidation under Chapter 7 of the act.

$200 Million Suit

Subsequently, trustees for De Lorean Motor Co. brought suit against former company officials for $200 million, alleging that they diverted more than $26 million from the company for De Lorean’s use or their own use.

The indictment alleges that from October, 1978, De Lorean diverted money from De Lorean Research Limited Partnership and partners in the enterprise.

The limited partnership raised about $18.7 million from investors, representing that the funds were to be used for research and development on De Lorean’s sports car, the indictment said.

De Lorean Motor Co., controlled by De Lorean, was a general partner of De Lorean Research, the indictment said.