Defense Rejects Theft Charge in Tyco Trial

Two former top Tyco International Ltd. executives who are accused of embezzling millions of dollars earned every penny they got from the company and never acted with criminal intent, defense lawyers told jurors Thursday.

The lawyers represent L. Dennis Kozlowski, 58, Tyco’s former chief executive, and Mark Swartz, 44, the company’s former finance chief, who are accused of stealing $150 million outright and profiting illegally on $575 million in Tyco stock sales.

Kozlowski’s lawyer, Stephen Kaufman, began by rejecting the allegation, made by Manhattan Assistant Dist. Atty. Owen Heimer in his opening statement Wednesday, that the former CEO’s method of theft was to instruct, deceive and conceal.

“Dennis Kozlowski instructed employees to be honest,” Kaufman said.

“No witness will appear before you and say Dennis instructed them to do anything wrong. The facts are that every penny my client earned was on the books and records of the company.”

Kaufman said that Kozlowski “never committed any act of concealment” and that Tyco employees, if called as witnesses, “will tell you Dennis never concealed anything.”

Kozlowski and Swartz are on trial for the second time on charges of grand larceny, securities fraud, filing false business records and related crimes. If convicted on the grand larceny charge alone, they each could face 25 years in prison.

Kaufman and attorney Charles Stillman, who represents Swartz, said that their clients earned all the money they received while they were Tyco’s top officers and that all their executive actions had the company board’s approval.