(Courtesy of Dale Fitzgibbons)
Ex-Tyco Executives Get 8 to 25 Years in Prison
By ANDREW ROSS SORKIN
New York Times
L. Dennis Kozlowski, the former chief executive of Tyco International who was convicted of looting the company of $150 million, was sentenced yesterday to 81/3 to 25 years in a New York State prison, the latest corporate figure to be handed a lengthy prison term in a corruption case.
Mark H. Swartz, his chief lieutenant, received the same sentence for his role in the thefts and fraud. The two men were convicted in June after a four-month retrial.
Judge Michael J. Obus of State Supreme Court in Manhattan also ordered Mr. Kozlowski to pay $167 million in restitution and fines. Mr. Swartz was ordered to pay $72 million in fines and restitution.
The sentencing follows a parade of other substantial terms imposed on former chief executives convicted of white-collar crimes, most notably Bernard J. Ebbers of WorldCom, who received a prison term of 25 years, and John J. Rigas of the cable operator Adelphia Communications, who was sentenced to 15 years. Those sentences - in federal courts - were seen as sending a message to deter huge corporate frauds in the future.
The Tyco sentencing may be the last high-profile corporate misconduct before the most prominent one of them all: the trial next year of Kenneth L. Lay and Jeffrey K. Skilling of Enron.
Handing down the sentence in a packed courtroom, Judge Obus said yesterday: "The crimes at issue here were violations of the defendants' positions of trust and their fiduciary duty on a grand scale. They caused damage to Tyco and to others, including the shareholders who are Tyco's owners and who, like the investing public, generally should be able to rely on the integrity of the management of publicly traded companies."
Mr. Kozlowski, 58, became a symbol of corporate greed for a $6,000 shower curtain, as well as a $2 million birthday party in Sardinia for his wife that was partly paid for by the company. He stared straight ahead, overwhelmed, as the sentence was read aloud. Mr. Swartz, 45, looked down at the floor.
The two men, both dressed in gray suits and starched-white shirts, were then handcuffed behind their backs and led away by court officers. Mr. Swartz wistfully winked at his wife and parents. Mr. Kozlowski's wife, wearing sunglasses, wiped away tears that had run down her face as his two daughters, also crying, consoled each other.
Lawyers for Mr. Kozlowski and Mr. Swartz said they planned to seek bail pending appeal from an appellate court today or tomorrow. The two men spent last night in the Bernard B. Kerik Complex near the courthouse. If their lawyers are unsuccessful, the two men will be transferred to Rikers Island by the end of the week to be processed and will most likely serve their time in a maximum-security state prison like Attica.
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