Tyco executives are indicted on fraud & embezzlement charges - 2002

Sep 12, 2013 - by Michael Thomas Barry - 0 Comments


Dennis Kozlowski and Mark Swartz

by Michael Thomas Barry

On September 12, 2002, three former executives from Tyco International, including the CEO and CFO, are indicted in New York on charges that they stole hundreds of millions of dollars from the company. Two of the men, CEO Dennis Kozlowski and CFO Mark Swartz, were later convicted and given lengthy prison sentences. The case became symbolic of the era's corporate corruption and greed.

Kozlowski and Swartz were charged with using Tyco, a manufacturer of industrial products, as their private bank and looting $150 million while pulling in another $430 million by secretly selling large shares of company stock after its value had been artificially inflated. Among other things, the men took unauthorized loans from the company's coffers and gave themselves enormous, unauthorized bonuses. In June 2002, three months before the indictments, Kozlowski resigned as Tyco's chief just before he was charged with evading sales taxes on expensive paintings he'd purchased. At his Tyco trial in 2004, the former CEO's lavish lifestyle was put on public display and the media had a field day with revelations of his conspicuous consumption. In April 2004, the case ended in a mistrial after a jury member holding out for an acquittal received a coercive letter from a stranger. At a second trial in June 2005, the jury deliberated for eleven days before convicting Kozlowski and Swartz on multiple counts of grand larceny, securities fraud, conspiracy and falsifying business records. Each man was later sentenced to 8 to 25 years in prison, while Kozlowski, was ordered to pay $170 million in fines and restitution and Swartz, was ordered to pay $72 million.

Michael Thomas Barry is the author of Murder & Mayhem 52 Crimes that Shocked Early California 1849-1949. The book can be purchased from Amazon through the following link:

Amazon - http://www.amazon.com/Murder-Mayhem-Shocked-California-1849-1949/dp/0764339680/ref=la_B0035CPN70_1_3?ie=UTF8&qid=1361552464&sr=1-3

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