John Z. DeLorean, the celebrity millionaire caught on videotape discussing cocaine deals with government agents posing as drug dealers, was acquitted of all charges by a federal jury today in a tumultuous and emotional climax to a five-month, $1 million trial.
"Praise the Lord," said the tall, silver-haired former auto maker as a court clerk read off "not guilty" verdicts on eight counts of conspiracy and drug possession and distribution. If convicted on all counts, he could have been sentenced to 67 years in prison and fined $185,000.
DeLorean's victory, besides eliminating the major obstacle in his dogged campaign to recover his fortune and reputation, may also have far-reaching impact on use of a key crime-fighting tactic -- the "sting" operation. Aside from whether judges are influenced by the jury's reluctance to accept the word of undercover agents, local prosecutors are expected to hesitate in mounting similar cases against well-financed suspects in the future, a Justice Department official said.
DeLorean was arrested 22 months ago in a Los Angeles hotel room after being secretly videotaped toasting an alleged scheme to rescue his faltering sports car company with profits from a $24 million cocaine deal.
But in a tearful post-verdict meeting with DeLorean, his wife and attorneys, some jurors said they felt that DeLorean had never been involved in a conspiracy. Others said they believed he had been illegally entrapped by government agents.
"Many of the government actions in this case were not appropriate," an accountant who served on the jury later told reporters.
Assistant U.S. Attorneys James P. Walsh Jr. and Robert M. Perry, who had fought DeLorean's impassioned charges that he had been illegally lured into the scheme by government agents, appeared stunned by the decision.
"I've had not-guilty verdicts before," Perry said, "but this is a great shock and I'm surprised."
Howard Weitzman, the DeLorean attorney who had borrowed money to help pay for the defense of his cash-poor client, buried his head in his hands and trembled. DeLorean's wife, model Cristina Ferrare, burst into tears and hugged her mother, Renata, who celebrated a birthday today.
The smiling jurors, who deliberated for 28 1/2 hours during seven days after hearing 63 days of arguments and testimony, watched the red-faced but dry-eyed DeLorean, 59, embrace his wife and mother-in-law.
"A birthday present," he said. Later he told his attorneys, "It's just like Perry Mason."
While U.S. District Court Judge Robert M. Takasugi was polling the six-man, six-woman jury to make sure they agreed with the verdict, Ferrare dashed out of the courtroom to telephone her children from a makeshift press room down the hall.
After the verdict was announced, Weitzman got the judge's permission for a meeting with the jury, and for more than an hour the happy DeLoreans and the defense attorneys chatted with most of the jurors in the jury room.
When DeLorean was arrested Oct. 19, 1982, after a three-month investigation, federal investigators appeared to have an unassailable case. It seemed to put an unexpectedly bizarre and catastrophic end to the career of one of the country's best-known businessmen, a man who had abandoned a top job at General Motors to build a gull-wing-door sports car named for himself.
The $25,000 automobile hit the market just as the world recession sent most car companies into a tailspin, and sales were slow. On the day of DeLorean's arrest the British government, which had lent his company more than $160 million, closed his factory in Northern Ireland.
DeLorean still had three expensive residences and a thriving ski slope equipment company in Utah, but he was so harassed by creditors and lawsuits that he soon ran out of cash to pay his attorneys.
Weitzman noted today that DeLorean still is being investigated by a grand jury in Detroit over charges of criminal misuse of his company's funds, including alleged evidence of more than $17 million being funneled to a mysterious company in Switzerland.
"What has happened here is a step by 12 citizens to attempt to send a message to the nation at large and the world that this type of conduct that was involved in the investigation and arrest and indictment and prosecution . . . of John DeLorean will not be tolerated again," Weitzman said.
Weitzman and another DeLorean attorney, Donald Re, have suggested that government officials in the United States and Britain may have illegally conspired to put DeLorean out of business, but they would not comment today on whether there were plans to take legal action against government officials or anyone else.
"What has happened today is one step by 12 citizens to send a message to the world at large and to the government that this type of activity cannot be tolerated," Weitzman said. Attorney Re characterized the government actions as "a giant step from Abscam," a government "sting" operation in which FBI agents, posing as Arab sheiks and their representatives, offered bribes to members of Congress. One senator and six House members were later convicted on Abscam-related charges.
DeLorean told reporters afterwards that he was grateful to the jurors, to his attorneys and to former Drug Enforcement Administration agent Gerald Scotti, who testified in the trial's last days that he had heard a government informer promise to "deliver" DeLorean to the government.
"It's been an absolute horror, let me tell you that," DeLorean said.
"As a Christian," he said, he bore no grudges against the government attorneys or agents. "But when you see the tremendous power of the government resources and its ability to intimidate, you get a very great concern."
Weitzman said he hoped that Walsh, the chief government prosecutor, "had learned a lesson, . . . if he's still in a position to handle cases like this after this." The government exercised "a significant lack of judgment," Weitzman said.
For the case, agents of the Federal Bureau of Investigation and the DEA had compiled five hours of secret videotapes showing DeLorean discussing cocaine trafficking. They had a key witness, former DeLorean drug trafficker and neighbor James T. Hoffman, ready to swear that DeLorean had first suggested a heroin deal to raise $40 million at a July 11, 1982, meeting in Newport Beach, Calif.
The government began making surreptitious audio tapes of telephone conversations between DeLorean and Hoffman and videotapes of meetings between DeLorean, an FBI agent playing a drug deal-financing banker and a DEA agent playing a Mafia drug financier.
In a San Carlos, Calif., meeting with FBI agent Benedict Tisa, who played the banker, DeLorean could be heard on the videotape promising to "construct the record" of his company to help launder money for a drug dealer. At a Sept. 4, 1982, meeting at the L'Enfant Plaza Hotel in Washington, DeLorean told Hoffman he had $2 million in financial backing for a cocaine deal from "very, very tough guys," indicating that he meant the Irish Republican Army.
On a videotape of a Sept. 28 meeting in the Bonaventure Hotel here, DeLorean telephoned William Morgan Hetrick, a drug trafficker and pilot, to pass on instructions from DEA agent John Valestra, who posed as an organized crime financier, and Hoffman.
"They'd like to go ahead with those monkeys a word for cocaine you had up in San Francisco. They're ready, they got the cash and they want to go ahead and buy 'em," DeLorean said. He told Valestra, "The most important thing in my life is to get this thing done."
Hetrick and an assistant delivered 55 pounds of cocaine to federal agents on Oct. 18 and were arrested. Both later pleaded guilty to drug trafficking charges. Hoffman called DeLorean, who flew to Los Angeles from New York the next morning.
At a hotel near the Los Angeles airport, with the videotape camera rolling, Valestra showed DeLorean a briefcase full of cocaine. DeLorean toasted the success of their venture with champagne provided by the government agents. He called the cocaine "better than gold. Gold weighs more than that, for God's sake."
Then FBI agent Jerry West, on hand with Valestra today to hear the jury's verdict, walked in and told an evidently confused DeLorean that he was under arrest.
In talking to reporters after their verdict today, however, eight jurors who agreed to be interviewed indicated that the tapes had little bearing on their decision to acquit. Several emphasized the importance of Judge Takasugi's instructions, particularly on the issue of entrapment.
Takasugi had said they had to find DeLorean not guilty if they determined that the government had set up the original crime, had induced DeLorean to commit the crime or had acted despite a clear unwillingness on DeLorean's part to break the law.
Some jurors said they decided that the government never proved that DeLorean had been involved in a drug conspiracy, while others said they felt that he had broken the law, but only because of government entrapment. One female juror said, "If there had not have been entrapment, there would have been a hung jury."
The verdict was based "on the letter of the law, no matter what I felt about it," said a researcher from the California Institute of Technology who served on the jury.
A juror in her twenties, the youngest on the panel, said "a number of us cried, some of us lost a lot of sleep or a lot of weight." They said they avoided voting on the eight counts until they had spent several days reviewing the evidence. Some said they found some of the government's conduct offensive. One man, the accountant, said, "I look forward to a favorable future impact on the country" from a change in government tactics in such cases.
As for Scotti's testimony about government attempts to set up DeLorean, one juror said, "Some of us thought that was very important and some of us disregarded it."
The trial was charged from the beginning with a circus-like atmosphere, with more than 50 news organizations filling the courtroom seats and operating a wall of television cameras outside the federal courthouse here.
Toward the end of the trial, several jurors complained of being followed to their cars by television cameramen. Federal investigators are still looking into the circumstances surrounding a mailing to several jurors of a congressional report criticizing government entrapment. An ABC producer was criticized for trying to reach jurors at home while they were deliberating.