Tyco theft charges 'staggering'
By Kevin McCoy and Thor Valdmanis
USA Today
NEW YORK — Embattled former Tyco CEO Dennis Kozlowski and two other former top officials looted the conglomerate of hundreds of millions of dollars in a scheme that "recast Tyco as their personal piggy bank," prosecutors and regulators charged yesterday.
Associated Press
Indicted on charges of corruption, conspiracy and grand larceny, Kozlowski and former Tyco CFO Mark Swartz secretly tapped two corporate funds to splurge on luxury homes and yachts and take massive personal bonuses and loans, prosecutors said.
L. Dennis Kozlowski, center, former CEO of Tyco International, leaves New York criminal court.
They stole more than $170 million and fraudulently obtained $430 million by selling securities, they said.
Mark Belnick, Tyco's former chief counsel, falsified business records to hide at least $14 million in company loans to himself, said Manhattan District Attorney Robert Morgenthau.
The charges add to an earlier indictment accusing Kozlowski of evading more than $1 million in sales taxes on art purchases.
Prosecutors and regulators say the case represents a new low in a year marked by widespread allegations of Wall Street wrongdoing, as the three allegedly managed to run the scheme for seven years while duping investors.
The dollar amounts are "staggering," said Steven Cutler, enforcement chief for the Securities and Exchange Commission, which filed a civil fraud case against the three.
Tyco also sued Kozlowski, charging he misappropriated hundreds of millions of dollars in Tyco assets.
Authorities said the three siphoned money between 1996 and 2002 from accounts intended to pay for loans to key employees and relocate executives.
Three Tyco board members and several employees received payments from the three, Morgenthau confirmed, raising the prospect of additional indictments.
The men pleaded not guilty in a Manhattan Supreme Court arraignment.
