While commentators continue to revisit last week’s mistrial of two former Tyco executives, a former colleague is due in court this week, in anticipation of a trial scheduled to begin next Monday.
Mark Belnick, former executive vice president and chief corporate counsel of Tyco International Ltd., was originally indicted in September 2002 with former CEO Dennis Kozlowski and former CFO Mark Swartz. According to charges filed by Manhattan District Attorney Robert Morgenthau, Belnick hid $14 million in undisclosed, interest-free relocation loans to himself. Added Stephen Cutler, director of enforcement of the Securities and Exchange Commission, in a statement, “Kozlowski, Swartz, and Belnick treated Tyco as their private bank.”
In February, prosecutors added three criminal charges against the 56-year-old, including a felony larceny charge stemming from a bonus he allegedly received in the form of $2 million in cash and 200,000 Tyco shares.
Belnick also is accused of failing to disclose a $2.5 million related-party transaction that resulted in a payment to a Tyco director, identified as Lord Michael Ashcroft. Ashcroft resigned from Tyco’s board last year, according to Morgenthau, who unveiled the updated indictment at a press conference in New York.
The speculation among some observers was that in adding to the indictment, prosecutors may have been trying to pressure Belnick into helping them with their cases against Kozlowski and Swartz. “The DA is looking at Belnick as a ticket to bigger fish at Tyco,” said former prosecutor Jacob Frenkel, according to wire service reports.
Belnick, free on $1 million bail, pleaded not guilty to the new charges before State Supreme Court Justice Michael Obus.
Last month, Belnick received some good news from a U.S. District Court in New Hampshire: He can have access to documents that Tyco claimed aren’t any of his business, according to the Portsmouth Herald.
In his order, Chief Judge Paul Barbadoro stated that when Tyco gave documents to both the New York court and the SEC, it waived its rights of privilege to those documents and must turn them over to Belnick as well, according to the paper. However, the judge denied Belnick’s request to obtain access to a number of related documents, reported the Herald, stating that those documents would have to be evaluated individually.
The Financial Times noted that although Belnick is expected in court this week and his trial is set to begin next Monday, it is unclear whether matters will proceed on schedule so soon after last week’s mistrial of Kozlowski and Swartz.