Kozlowski Facing New Charge
L. Dennis Kozlowski, the former chief executive of Tyco International Ltd. who resigned this month after being accused of tax evasion, was indicted Wednesday on a new charge of tampering with evidence.
Kozlowski, 55, pleaded not guilty to the latest allegation. The charge is “frivolous,” said his lawyer, Stephen Kaufman.
The expanded indictment accuses Kozlowski of removing a phony shipping document from a file at Tyco’s offices in Boca Raton, Fla., before the material was delivered to New York prosecutors. Kozlowski had prepared the false document, the indictment says.
Kozlowski, who made more than $300 million as head of Tyco, resigned June 3 and was charged a day later with conspiring with dealers to avoid sales taxes on art he bought for $13.2 million. His fall was seen by many investors as an extreme example of a chief executive who used his company for personal gain. Tyco shares have fallen 79% this year.
After entering his plea before New York State Supreme Court Justice Michael Obus, Kozlowski made a brief comment. “I’m spending my time with family and friends,” he said when asked what he’s doing.
Kozlowski, who remains free on $3 million bail, is charged with tax violations, tampering with evidence and falsifying business records in an indictment that now has 14 counts. The tampering charge is a felony that carries a maximum four-year prison term, the same as the tax evasion counts.
Tyco spokesman Gary Holmes declined to comment on the new accusation. Tyco is conducting its own investigation, and Holmes wouldn’t say whether Tyco helped produce the missing document.
“We’re cooperating fully with the D.A.’s investigation,” Holmes said. “We’re not going to comment on Mr. Kozlowski’s personal issues because they have no impact on Tyco.”
Shares of Tyco fell $1.58, or 12%, to $11.97 on the New York Stock Exchange after earlier touching $11.35.
The Bermuda-based conglomerate is the largest maker of electrical connectors, burglar alarms and undersea fiber-optic cables. Earlier this month, a person familiar with the situation said the Securities and Exchange Commission revived an investigation of how Tyco accounted for acquisitions.
Kaufman declined to say whether he expects the case against Kozlowski to be expanded again. Authorities have said the investigation of Kozlowski is continuing.
“The only thing I’m dealing with right now is a sales tax case,” Kaufman said.
The latest charges say Kozlowski removed a document that falsely reflected the shipment of five paintings from New York to Tyco’s U.S. headquarters in Exeter, N.H.
Kozlowski previously was accused of evading more than $1 million in New York sales taxes by shipping five empty crates to New Hampshire in January. Kozlowski’s purchases included paintings by Monet and Renoir.
In another instance, Kozlowski arranged for a painting to be taken from his Manhattan apartment, shipped to New Hampshire and then returned to his Manhattan apartment, authorities said.
