Tax

Kozlowski to Settle Tax Charges for $21 Million

Former Tyco CEO avoids further prosecution but remains imprisoned, pending appeal, after his conviction last year.
Stephen TaubMay 12, 2006

Former Tyco International chairman and chief executive officer Dennis Kozlowski, now serving prison time for stealing hundreds of millions of dollars from the conglomerate, has agreed to pay $21.2 million as part of a deal to avoid prosecution on New York State tax charges, according to published accounts.

According to his lawyer, James DeVita, and a prosecutor, Ann Donnelly, Kozlowski will reportedly pay $3 million in back sales taxes, interest, and penalties. Following the payment, New York State Supreme Court Justice Michael Obus will dismiss a number of charges, including conspiracy to evade the sales tax on $13.2 million in artwork delivered to Kozlowski but paid for by Tyco, Bloomberg reported.

DeVita told the wire service that Kozlowski will also pay about $17 million in back state income taxes.

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In September, Kozlowski and former Tyco chief financial officer Mark Swartz were each sentenced to eight and one-third to 25 years in state prison. Kozlowski did not appear in court Friday, noted Bloomberg; he and Swartz presently reside in the Downstate Correctional Facility in Fishkill, New York, pending their appeals.