Retrial of Tyco Ex-Executives Starts
The two former top executives of Tyco International Ltd. stole $150 million from the industrial conglomerate even though they were among the highest-paid people in corporate America, a prosecutor told jurors as their retrial began Wednesday.
In a 3 1/2-hour opening argument, Manhattan Assistant Dist. Atty. Owen Heimer said L. Dennis Kozlowski and Mark Swartz earned almost $300 million in legitimate pay between 1999 and 2001 but took the additional money to finance sumptuous lifestyles that included purchases of lavish apartments and fancy artwork.
“This authorized compensation -- as huge as it was -- was just not enough for these two men,” Heimer said. “They had to have more, so they stole another $150 million.”
The first trial of Kozlowski and Swartz ended in mistrial in April after a juror’s actions upstaged the legal proceedings.
The juror, retired teacher Ruth B. Jordan, made a gesture in court that some observers interpreted as an “OK” sign to the defendants. Jordan was identified by several news organizations and subsequently received a threatening letter, prompting the judge to declare a mistrial a week later.
On Wednesday, Jordan sat in the back row as Heimer finished his presentation.
“I’m interested -- that’s all,” Jordan said afterward in explaining her appearance. She indicated that she may attend further court sessions but would not come regularly. “I’ve got a life,” she said.
Kozlowski, Tyco’s former chief executive, and his onetime chief financial officer Swartz are accused of grand larceny, securities fraud and conspiracy in an alleged plot to loot the company and cheat shareholders.
The men, who have pleaded not guilty, face up to 30 years in prison if convicted.
Defense attorneys are scheduled to give their opening statements today. In the first trial, defense lawyers said that the executives’ actions were approved by the board and that living an extravagant lifestyle was not a crime.
Heimer argued Wednesday that Kozlowski and Swartz committed a range of illegal acts, including drawing huge loans from the company and then instructing underlings to erase them from the books. The men told Tyco employees that the board of directors had forgiven the loans through bonuses even though they hadn’t, Heimer said.
After the first trial, several jurors criticized the Manhattan district attorney’s office for what they saw as an overly lengthy and ponderous presentation. The trial had gone on six months before ending in mistrial.
Heimer appeared to be cognizant of that Wednesday as he delivered a crisp and methodical argument that focused on seven specific instances of alleged theft.
