Another Roadblock for a Dreamer

By Charles P. Alexander.

"Praise the Lord," said John Z. DeLorean when he heard the not-guilty verdict at his cocaine-trafficking trial last year. But his legal troubles were far from over. A federal grand jury in Detroit last week indicted the once and possibly future automaker on new charges: mail and wire fraud, interstate transportation of stolen money, and income tax evasion. The accusations stem from his handling of the finances of DeLorean Motor Co., which went bankrupt in 1982. Investigators charge that DeLorean, 60, bilked his backers out of $8.9 million.

The case focuses on $12.5 million that investors put up for research and development of the DeLorean, a sleek, stainless-steel sports car with distinctive gull-wing doors. The indictment charges that beginning in 1978 DeLorean funneled much of that money into a mysterious Panamanian company called GPD Services, which in turn deposited the funds at the Pierson Bank in Amsterdam. Eventually, $8.9 million went from that bank into DeLorean's personal account at New York's Citibank. Of that amount, the indictment says, DeLorean used $7.5 million to buy Utah-based Logan Manufacturing, which makes equipment for maintaining ski slopes. He allegedly used the remaining $1.4 million for personal expenses and repayment of a loan. All the while, DeLorean and his then wife Model Cristina Ferrare enjoyed a lavish life-style, which included a 25-room mansion in Bedminster, N.J., a 48-acre ranch in San Diego County and a 20-room apartment on Fifth Avenue overlooking New York City's Central Park.

After the indictment, DeLorean, a former General Motors executive who was once in the auto industry's fast lane, brushed off questions from reporters | outside his Manhattan apartment with a brusque "Read the book. It's all in the book." He was referring to DeLorean (Zondervan; $17.95), his new autobiography. In it, he denies the charges raised in Detroit. Writes DeLorean: "When all the documents and facts are presented, I expect to be fully vindicated."

The DeLorean car, which was manufactured in Northern Ireland with the help of loans and grants from the British government totaling more than $120 million, made its debut in 1981. Thanks in part to the car's $25,000-plus price tag and a U.S. recession, sales were low. When the company was near collapse, DeLorean allegedly planned to raise cash in a big cocaine deal, but his prospective partners in crime turned out to be FBI agents. He was acquitted because the jury decided that he had been entrapped by the agents. His celebration was bittersweet, however. Just before the trial ended, Ferrare had told him she was leaving him. They were divorced last April, and she remarried two weeks later.

After his arrest for cocaine trafficking, DeLorean became a born-again Christian and began attending weekly Bible study classes. He never gave up his dream. As he writes in his autobiography, "I would delight in being able to resurrect the DeLorean car." He and a group of investors including Marvin Katz, an Ohio-based auto-parts distributor, hope to start a modest venture that would turn out 250 cars annually, possibly in Columbus.

The 9,000 DeLoreans sold in the U.S. are beginning to disappear from American roads because of the lack of spare parts. But the car has not totally receded from the popular imagination. In last summer's megahit movie Back to the Future, the supercharged auto that carries Marty McFly back to the 1950s is a converted DeLorean, specially equipped for time travel.

With reporting by Melissa Ludtke/Los Angeles