Risk Management

Tyco’s Dynamic Duo Staying Behind Bars

Kozlowski and Swartz lose their appeal to overturn their convictions and will continue serving their long sentences.
Stephen TaubNovember 15, 2007

It looks like former Tyco bigwigs Dennis Kozlowski and Mark Swartz will be calling prison home for awhile.

A New York State appeals court on Thursday unanimously upheld their convictions for conspiracy, grand larceny, securities fraud, and falsifying business records, according to the Associated Press. Both are serving 8-1/3 to 25 years in prison.

They were found guilty of looting the company for $170 million in unauthorized compensation and $430 million through stock manipulation. The money included bonuses and forgiven loans, money for investments, expensive real estate, and personal luxuries.

Defense lawyers had argued that neither individual took money to which they were not entitled.

But the appeals panel wrote, “The evidence amply supports the conclusion that defendants took unauthorized bonuses from Tyco in 1999 and 2000.”

In an interview with FOX News earlier this week, Kozlowski conceded he earned an enormous sum of money, but continued to insist that he did not steal any. He also asserted, as both he and Schwartz did during their trial, that Tyco’s board had approved his compensation.

However, the appellate court cited testimony that all but one member of the compensation committee had no knowledge of the bonus payments.

The court also noted there was no written record of the payouts. “The absence of any reference to these transactions in the chain of documentation available to the committee clearly demonstrates defendants’ cover-up of their thievery,” the appellate judges reportedly wrote.