Its About Time-Tyco executives get up to 25 years in prison
Monday, September 19, 2005 at 6:14AM One can only ask if these sentences of the Tyco executives, set forth in this article are strong enough. Let me know your thoughts.
Link: MSNBC - Ex-Tyco executives get up to 25 years in prison.
Ex-Tyco executives get up to 25 years in prison Kozlowski, Swartz punished for stealing hundreds of millions of dollars The Associated Press Updated: 2:28 p.m. ET Sept. 19, 2005
NEW YORK - L. Dennis Kozlowski, the former CEO of Tyco International Ltd., and former Tyco finance chief Mark Swartz were sentenced Monday to up to 25 years in prison for stealing hundreds of millions of dollars from the company.
The men, who were immediately ordered into custody, will be eligible for parole after serving eight years and four months.
Family members wept in the gallery as the sentences were imposed. Kozlowski was led out of the front of the courtroom in handcuffs as his wife quietly sobbed from a bench three rows back.
State Supreme Court Justice Michael Obus ordered Kozlowski and Swartz to pay a total of $134 million in restitution; in addition, Kozlowski was fined $70 million, Swartz $35 million.
The sentences end a case that exposed the executives’ extravagant lifestyle after they pilfered some $600 million from the company including a $2 million toga birthday party for Kozlowski’s wife on a Mediterranean island and an $18 million Manhattan apartment with a $6,000 shower curtain.
Kozlowski, 58, and Swartz, 44, were convicted in June after a four-month trial on 22 counts of grand larceny, falsifying business records, securities fraud and conspiracy. It was their second trial — the first ended in mistrial after a juror said she received threats following reports that she made an “OK” signal to the defense team.
Kozlowski and Swartz are the latest executives sentenced to prison in a wave of white-collar scandals that shook corporate America and outraged the public after thousands of people lost their jobs and pension nest-eggs.
One-time WorldCom Chairman Bernard Ebbers was sentenced to 25 years in prison for the $11 billion accounting fraud that toppled the telecommunications company that emerged from bankruptcy as MCI Inc. Adelphia Communications Corp. founder John Rigas was sentenced to 15 years in prison for his role in the looting and fraud at the cable TV company. His son and former finance chief, Timothy Rigas, got 20 years.
Enron Corp. founder Kenneth Lay, former CEO Jeffrey Skilling and former top Enron accountant Richard Causey are expected to go to trial in January.
Before Monday’s sentencing, Assistant District Attorney Owen Heimer told the judge that Kozlowski “should not be shown any leniency.”
“He stole. He committed fraud. He committed perjury,” Heimer said. “He engaged in a shocking spree of self-indulgence.”
But Kozlowski asked the judge to be as “lenient as possible” and to consider “all the positive things I have done in my life.” His lawyer, Stephen E. Kaufman, read from letters written on his client’s behalf and said, “He’s a good man. He’s a decent person and his reputation has been tarnished but his life should not be destroyed.”
Swartz also asked for leniency, and his lawyer, Charles A. Stillman, said he was a man of “remarkable decency.”
Kozlowski and Swartz were accused of giving themselves more than $150 million in illegal bonuses and forgiving loans to themselves, besides manipulating the company’s stock price.
The jury deliberated 11 days before returning 22 guilty verdicts out of 23 counts for each defendant. Each was acquitted of a count of falsifying records about company loans for homes in Boca Raton, Fla.
Kozlowski, employed by Tyco from 1975 until 2002, and Swartz, who joined Tyco in 1991 and left in 2002, testified that they never stole anything from Tyco or received anything from the company to which they were not entitled.
They were also quick to point out that unlike the cases at WorldCom and Enron, Tyco continued to thrive after the scandal.
“Tyco is not Enron,” Thomas Curran, a former New York City prosecutor who is now a defense lawyer, said last week. “Tyco is a real company with a real business plan that still employs thousands of people. ... There are no retirees eating cat food because of Dennis Kozlowski.”
Tyco, which has about 250,000 employees and $40 billion in annual revenue, makes electronics and medical supplies and owns the ADT home security business. Nominally based in Bermuda, its operations headquarters are in West Windsor, N.J.
© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
© 2005 MSNBC.com
URL: http://www.msnbc.msn.com/id/9399803/
Reader Comments (3)