No sooner did Charlie Gasparino at Fox Business News drop the bomb today that Tesla's legal team is "bracing for billions of dollars in potential liability from private lawsuits" than a second proposed SEC formal whistleblower has now entered the picture, and according to Jalopnik, drumroll, he alleges that Tesla failed to let shareholders know that the DEA had previously uncovered an alleged Mexico-based drug trafficking ring involving "large quantities" of cocaine and crystal meth at the company's Nevada Gigafactory.
The situation looks like it could be quickly spinning out of control at Tesla. Earlier this week, the New York Times reported that the board, who so far has come off as heavily sedated and generally missing from the picture, was finally apparently at odds with CEO Elon Musk about his use of Twitter and the potential liability he may have brought onto the company. It was then proclaimed by numerous former SEC attorneys on various news networks that SEC action based on Musk's "go private" Tweet is likely unavoidable. These sentiments were echoed today by a former SEC attorney on streaming financial news network Cheddar.
Then, on Wednesday, whistleblower Martin Tripp (before he decided to delete his Twitter account due to hacking) took to the social media platform and dropped a list of Model 3 VIN numbers that he claims are vehicles carrying punctured battery packs.
Now, after all of that, a former employee named Karl Hansen, who worked for Tesla's security and investigations division has sought formal whistleblower status with the SEC. What Hansen alleges is very different than what Tripp has claimed – and potentially just as serious.
Hansen's complaint was filed on August 9 and was released by whistleblower attorney Stewart Meissner, the same attorney who is representing Martin Tripp. Jalopnik was first to break the story.
Among his allegations is one that the United States Drug Enforcement Administration apparently revealed substantial drug trafficking by Tesla employees at its Nevada Gigafactory and that the company failed to disclose this to shareholders. Hansen alleges that the company received written notification from the DEA in May that there may be a trafficking ring involving "significant quantities of cocaine and possibly crystal methamphetamine" on behalf of a Mexican drug cartel at the Gigafactory.
As an investigator, Hansen notified the company in early June that he had “corroborated connections between certain Tesla employees at the time and various alleged members of the Mexican drug cartel identified in the DEA report as located in Mexico, that he urged Tesla to disclose his findings to law enforcement and to the DEA task force, but that Tesla refused to do so and instead advised him that Tesla would hire ‘outside vendors’ to further investigate the issue,” according to the Jalopnik article.
After reportedly notifying three supervisors, he claims that the company‘s Board of Directors, comprised of people like Elon Musk's brother Kimbal Musk, was ultimately not notified of the findings.
Hansen also allegedly discovered that $37 million worth of copper and raw materials were stolen from the Gigafactory earlier this year. He was reportedly told to also not report this theft to law-enforcement. Shortly thereafter, in mid July, he was terminated.
This sounds similar to claims made in early May by another ex-employee who claimed that they were also terminated for exposing theft at Tesla. Jalopnik, which also broke that story, reported the story of Daniel Trinh, who allegedly received good performance reviews at his job until 2017, a point when he claims he went to Tesla's human relations department to report the theft of auto parts, such as wheels and tires, by another manager of the company:
Daniel Trinh worked as an Operations Associate Manager at Tesla’s assembly plant in Fremont, California, up until his termination last October, according to the complaint filed on Tuesday in Alameda Superior County Court.
He received positive performance feedback from supervisors until 2017, when he raised concerns to his supervisors and Tesla’s Human Resources department “about theft of auto parts, including wheels and tires, by another manager,” the suit alleges.
Trinh alleges the stolen parts “were likely to cause significant losses to Tesla’s customers.” He also complained that Tesla’s alleged “failure to properly track customer inventory was likely to result in theft losses.”
“Tesla’s management team and HR department ignored Plaintiff’s complaints, and failed to properly investigate them,” the suit says. “Rather than taking proper responsive action, Defendants management team set about a course of action with the purpose of setting Plaintiff up for termination.”
In the suit, he blamed the theft on the company‘s inability to properly track inventory – a similar complaint to the mismanagement of inventory claim being launched against the company by whistleblower Martin Tripp.
The lawsuit alleged that Tesla failed to address Trinh's complaints and instead sent him on a track to be terminated, not unlike what Hansen is claiming. Trinh alleged that after he brought reports about potential theft to Tesla HR, he was given a performance evaluation that was full of "misleading, inaccurate and deliberately false accusations" about his job performance.
According to the Jalopnik, the second whistleblower Hansen also said that after the departure of alleged saboteur Martin Tripp, the company installed special equipment at the Gigafactory to capture cell phone communications made by its employees.