Jury begins deliberating criminal charges against Kozlowski and Swartz
(Bloomberg) ? Jurors began deliberating charges against L. Dennis Kozlowski and Mark Swartz, former top executives of Tyco Inc. accused of looting the company for years.
Kozlowski, 58, chief executive of Tyco for a decade, and Swartz, 44, who was his chief financial officer for seven years, are accused in New York of awarding themselves millions of dollars in bonuses without the approval of Tyco's directors.
They are also charged with abusing company loan programmes and misrepresenting Tyco's financial condition to investors.
"You are not being asked to make a general assessment of corporate governance in America," Justice Michael Obus of state Supreme Court told jurors yesterday in his final instructions.
To convict, he said, jurors must find that the defendants intended to commit the crimes they are accused of.
"The prosecution must prove beyond a reasonable doubt that the defendant knew he did not have a right to take the property," Obus said of the larceny charges against each man, the most serious.
If convicted on all charges, they could be sentenced to as much as 35 years in prison.
Kozlowski and Swartz face 31 charges of grand larceny, stock fraud, falsifying business records and conspiracy.
First degree grand larceny carries a 25-year maximum prison term.
The defendants claim the disputed payments were known to some directors and were authorised under Tyco pay formulas.
They say they made no attempt to hide their actions from auditors or the board and made all necessary representations to investors.
Kozlowski and Swartz are on trial for the second time.
Their first case ended in a mistrial in 2004 when a juror said she had been threatened.
Bermuda-based Tyco, which operates out of West Windsor, New Jersey, is the world's biggest maker of electronic connectors, industrial valves and security systems.
Swartz became finance chief at Tyco in 1995 and left the company in September 2002.
Kozlowski left Tyco on June 3, 2002, the day before he was indicted on charges of evading taxes on millions of dollars in art purchases.
He is to be tried separately on those charges at a later date.