Chinese carmaker accused of fraud

Entrepreneur Malcolm Bricklin’s Visionary Vehicles has filed a lawsuit that accuses China’s Chery Automobile Co. of defrauding the company after the two formed a joint venture to import Chinese cars to the U.S.

In the lawsuit filed Sunday in U.S. District Court in Detroit, Visionary Vehicles said it lost more than $26 million in investments and billions of dollars in potential future profit because of deceptive and corrupt practices by Chery during the joint venture.

“We brought them people, we brought them money, we brought them ideas, we brought them everything we were supposed to, and they took everything, and it’s a real shame,” Bricklin said Monday at a news conference in New York.

Attempts to reach Chery representatives by phone in the U.S. and China were unsuccessful, and an e-mail seeking comment from Chery was not immediately returned.

Bricklin formed the venture with Chery in 2004 to import its cars to the U.S. as early as 2007, but the deal fell through.

When the endeavor was called off in November 2006, a Visionary Vehicles spokeswoman said the two sides disagreed over the extent to which Chery’s automobiles would be modified.

The lawsuit, however, alleges that Chery used the publicity from the joint venture to cut New York-based Visionary Vehicles out of any plans to import cars into the U.S. It instead sought partnerships with other U.S. automakers, including Chrysler and Longmont, Colo.-based Quantum, the lawsuit says.

A spokesman for Chrysler, which is not named as a defendant in the lawsuit, declined to comment. A phone message left at a telephone number listed for Quantum, which is a defendant, was not immediately returned.

Visionary Vehicles is suing Chery under an anti-corruption and racketeering law that would allow a jury to triple the damages normally awarded in a civil case, said Fred Schwartz, an attorney representing Bricklin’s company.

The lawsuit, which seeks unspecified monetary damages, accuses Chery of using Visionary Vehicles to obtain plans and information about the U.S. auto market. It also says the Chinese company repeatedly stole plans for vehicles from U.S. automakers, saying its “operating modus has been to serially plunder Western technology.”