Magistrate Denies Xerox Motion for Dismissal of Suit : Courts: Irvine woman claims the company harassed and maliciously prosecuted her because of her knowledge regarding illegal shipments.

A federal magistrate has recommended that a trial be held in the case of an Irvine woman who sued Xerox Corp., alleging that the company maliciously prosecuted her and harassed her.

Debra von Trapp, 40, a computer industry consultant, alleged in a May lawsuit that the technology conglomerate tried to intimidate her because she had learned that Xerox’s German disk drive sales affiliate, SCSE Computer Systems GmbH, had falsified records about sales of floppy disk drives in the 1980s and had illegally shipped the equipment to Bulgaria.

Xerox spokesman Thomas Abbott would not comment on the case, which the company is contesting. The suit was filed in Orange County Superior Court and was transferred to federal court in Santa Ana last month.

On Monday, U.S. Magistrate Ronald Rose dismissed a motion by Xerox, which is based in Stamford, Conn., to have the case thrown out of court. Rose’s recommendation will be passed on to a federal judge, who will decide whether a trial will proceed.

Von Trapp said Tuesday that she is pleased that the case will probably be heard. In several past interviews, she has said that the company tried for a number of years to use its muscle to silence her.

In an attempt to intimidate her, Von Trapp said, one Xerox official told her, “Remember, Debra, we’re Xerox.”

Last fall, Commerce Department officials said they were investigating Von Trapp’s allegations.

About nine years ago, Von Trapp was a consultant specializing in executive hiring for the computer industry, including Xerox’s former disk drive division, Shugart, in Sunnyvale, Calif.

She said she discovered that Xerox, before the fall of the Iron Curtain and the loosening of U.S. export control regulations, was making illegal shipments to Eastern Europe. Von Trapp said Xerox officials knew of the shipments and warned her on several occasions not to make the information public. Xerox sold its Shugart unit in 1986. Von Trapp continued to work as a consultant through the 1980s.

Meanwhile, the West German affiliate failed in 1989, and Xerox sued that company to recover its investment. After winning a judgment against SCSE, Xerox lawyers alleged that Von Trapp’s home in Irvine was subject to seizure because of her dealings with the German company.

Xerox sued Von Trapp in 1991 in an attempt to confiscate the house in order to collect a $52,000 judgment. Von Trapp alleges that, because she was not liable for SCSE’s debts, the suit was malicious prosecution. She was subjected to further harassment, she alleges in the May lawsuit, including statements by Xerox to computer industry sources that she was attempting to extort money from the company.

Xerox dropped its 1991 suit against Von Trapp a few months after it was filed.