Swartz stole: Enniscorthy plutocrat guilty
With details of the $18 million Manhattan apartment with a $6,000 shower curtain and a $2 million birthday party in the Mediterranean, the case against former Tyco CEO L. Dennis Kozlowski and a subordinate came to epitomize corporate greed.
On Friday, June 17, a jury convicted Kozlowski and Tyco's former finance chief, Mark H. Swartz, of looting nearly $600 million from the company to finance lifestyles of kingly opulence. They face up to 30 years in prison.
The two men left the courthouse through a back door without speaking to reporters, but their lawyers promised prompt appeals. They were allowed to remain free on $10 million bail apiece pending an August 2 pre-sentencing hearing.
Kozlowski, 58, and Swartz, 44, were convicted of grand larceny, falsifying business records, securities fraud, and other charges. The jury deliberated over 11 days after a four-month trial in Manhattan state Supreme Court.
The men testified they were unaware of any wrongdoing when they accepted enormous corporate bonuses and hefty loans that were later forgiven by Tyco.
Their wives sat in the courtroom, their heads hanging, as the jury foreman intoned guilty verdict after guilty verdict– 22 for each. The men were acquitted of one charge of falsifying records about company loans for homes in Boca Raton, Florida.
The trial was the second for both men. Their first ended in a mistrial last year after one juror who was identified in news reports as a holdout for acquittal was improperly contacted.
Kozlowski and Swartz 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.
Both used Tyco's money to finance extravagant lifestyles that featured art, jewelry, and real estate, prosecutors said, including Swartz's rumored $17 million for the Enniscorthy estate near Keene. Another example of that spending was a $2 million toga party Kozlowski threw for wife Karen's 40th birthday on the Mediterranean island of Sardinia, they said. Tyco paid about half the cost of that wingding.
Kozlowski became the object of ridicule after it was revealed that the furnishings at his Manhattan apartment included a $6,000 shower curtain and other extravagances that brought the price of the place to more than $30 million.
The prosecution's emphasis in the first trial on such lavish spending was pared in the second.
Lawyers for Kozlowski, with Tyco from 1975 until 2002, and Swartz, who joined Tyco in 1991 and left in 2002, said the executives believed they were acting lawfully when they accepted compensation and loan forgivenesses or spent Tyco's money. There was no criminal intent by either man, they said, and therefore there were no crimes.
Albemarle land baron and disgraced former Tyco CFO Mark H. Swartz leaves Manhattan Supreme Court following his conviction on 22 counts Friday, June 17.
AP PHOTO/ LOUIS LANZANO
In the biggest transaction in Albemarle history, Swartz paid $17 million in 2001 for Enniscorthy, a former Coles family plantation, now a court-ordered frozen asset.
FILE PHOTO BY JEN FARIELLO