Attorneys for Morton M. Lapides, chairman of Alleco Inc., yesterday filed a motion in federal court in Norfolk attacking the grand jury process that indicted him for conspiring to fix prices of soft drinks and asking that the charges be dismissed.
The motion alleges that prosecutors failed to introduce evidence that might have cleared Lapides of the charges, including testimony to rebut the government's witnesses and the results of a polygraph test.
Lapides was indicted in U.S. District Court in Norfolk Oct. 15 for conspiring with officials of Mid-Atlantic Coca-Cola Bottling Co. Inc. to fix the prices of Pepsi-Cola soft drinks sold by his company, formerly Allegheny Beverage Corp., between 1982 and 1985.
Lapides has said that he is innocent of the charges and plans to fight them. "In my opinion, it's an improper indictment," Lapides said earlier this week. "I've always had the reputation of being a litigator, not a negotiator. I plan to do just that with this."
Officials for the Justice Department, which over the last several years has been conducting 11 grand jury investigations in eight states into price fixing in the bottling industry, had no comment yesterday.
Lapides is one of eight individuals and four companies who have been charged with keeping soft drink prices high. Mid-Atlantic Coca-Cola of Silver Spring has agreed to pay the government $2 million to settle two related cases.
According to court papers filed yesterday on behalf of Lapides, a polygraph test taken by him on Aug. 13 showed he was telling the truth about not being involved in the scheme.
Such a test would not be placed before a grand jury in Washington, according to a local prosecutor, because the jury's job is only to show probable cause. In addition, polygraph tests are not admissible as evidence in trials.
The motion also states that prosecutors relied heavily on evidence provided by James Sheridan, the former president of Allegheny Pepsi, who signed a plea agreement and pleaded guilty in June to price fixing.
"The government chose to rely on these accusations ... despite the prosecutors' awareness that one of their witnesses had engaged in destruction of evidence and other acts of obstruction of justice," according to the motion.
Lapides' lawyer could not be reached for comment last night.
Separately, Alleco yesterday was granted a reprieve on a debt payment that could have forced the Cheverly-based food services company into bankruptcy, company officials said.
The company had been in danger of defaulting on a $17 million credit payment due on Oct. 31, but the company's banks have given Alleco until Nov. 10 to make the payment and could extend the deadline until Nov. 30, the company said yesterday.
Alleco sold its Pepsi bottling unit and became a diversified services company in 1985. It has since sold off all its divisions except Service America Corp., which it is attempting to sell to a New York investment group. The $450 million deal has run into trouble because of the current turmoil in financial markets.