Former CEO Dennis Kozlowski and a second executive were convicted today of looting the company of more than $600 million in corporate bonuses and loans.
NEW YORK *#8212; Former CEO Dennis Kozlowski and a second executive were convicted today of looting the industrial products and services company Tyco International of more than $600 million in corporate bonuses and loans.
A state court jury deliberated 11 days before returning the verdict in the second prosecution of Kozlowski, 58, and Mark H. Swartz, 44, the conglomerate’s former finance chief. Both were convicted of grand larceny, falsifying business records and other charges.
The verdict came after a four-month trial in Manhattan state Supreme Court. The grand larceny conviction alone carries a penalty of up to 25 years in prison.
The pair had testified they were unaware of any wrongdoing when they accepted the money and loans.
Kozlowski and Swartz join a string of executives convicted in recent years in high-profile corporate wrongdoing cases, among them former WorldCom CEO Bernard Ebbers and Adelphia Communications Corp. founder John Rigas and his son, Timothy.
Richard Scrushy, founder and former chief executive at HealthSouth Corp., is on trial on fraud charges and awaiting a jury verdict in federal court in Birmingham, Ala. And former Enron Corp. executives Kenneth Lay and Jeffrey Skilling are scheduled to go on trial early next year.
The first trial of the former Tyco executives ended in an April 2004 mistrial because a juror, identified by a newspaper as a holdout for acquittal, received a menacing telephone call and letter.
In the retrial, jurors had indicated in a note to the judge after five days of deliberations that they had reached verdicts on an unspecified number of the 31 charges but were undecided on the others.
The defendants were accused of enriching themselves by nearly $600 million by taking unauthorized pay and bonuses, abusing loan programs and selling their company stock at inflated prices after lying about Tyco’s finances.