Former Tyco kingpins sentenced to as much as 25 years in prison
Kozlowski and Swartz taken into custody Family members weep in court gallery
NEW YORK—
L. Dennis Kozlowski, the former chief executive officer of Tyco International Ltd., and former Tyco finance chief Mark Swartz have been sentenced to up to 25 years in prison for stealing hundreds of millions of dollars from the company in a case that outraged the public with tales of executive greed and excess. The men, who were immediately ordered into custody yesterday, will be eligible for parole after serving eight years and four months.
Family members wept in the gallery as shook corporate America and outraged investors, employees and retirees after thousands of people lost their jobs and pension nest- eggs. One- time WorldCom Inc. chairman Bernard Ebbers was sentenced to 25 years in prison for the $ 11 billion accounting fraud that toppled the telecommunications company, which emerged from bankruptcy protection 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.
At yesterday’s sentencing hearing,
assistant district attorney Owen
Heimer asked the judge to impose the maximum 15 to 30 years, saying Kozlowski “ should not be shown any leniency.’’ “ He stole. He committed fraud. He committed perjury,” Heimer said. “ He engaged in a shocking spree of selfindulgence.’’ 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 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.’’
Kozlowski’s lawyer said he would ask an appeals court to grant bail pending his appeal.
Swartz also asked for leniency, and lawyer Charles Stillman said his client 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 on 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 defence 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, the operations headquarters are in West Windsor, N. J.