Prosecutor Says Ex-Execs Used Tyco As 'Piggy Bank'
By Paul Thomasch and Jeanne King
Manhattan Assistant District Attorney Ann Donnelly portrayed former Tyco Chairman Dennis Kozlowski and Mark Swartz, Tyco's former finance chief, as greedy, manipulative and deceptive.
"Their legitimate pay was not enough for them," Donnelly said in her closing argument. "They are here not because they blurred the line between themselves and Tyco. They are here because they obliterated it, because they erased it."
They used Tyco "as their personal piggy bank," she added.
Kozlowski and Swartz are accused of securities fraud, conspiracy, grand larceny and falsifying documents. They went on trial in September in a case that pitted them against former Tyco directors who made them among the best paid executives in the United States.
Several directors testified they never approved tens of millions of dollars in bonuses and forgiven loans for Kozlowski and Swartz. They are accused of stealing $170 million and obtaining another $430 million through illicit stock sales.
Kozlowski's lavish lifestyle, in which he bought Master paintings, jewelry and a $6,000 shower curtain, were a focal point of the trial. A $2 million birthday party in Sardinia, Italy, for his wife also captured the country's imagination.
"They purchased the loyalty of their employees to get them to do what they wanted," Donnelly said.
Several former Tyco employees testified they received big-ticket bonuses and had loans forgiven on their homes while working under Kozlowski and Swartz. An events planner, for example, testified she received a $1 million bonus and admitted having an affair with Kozlowski.
Kozlowski never took the stand in his own defense. But Swartz, the only defense witness, issued strong denials to the prosecution's claims during several days of testimony.
Earlier on Tuesday, Kozlowski's top defense lawyer, Stephen Kaufman, said the case never should have been a criminal matter, but belonged in a civil court.
"This is a case in search of a crime," Kaufman told jurors during the final hour of his summation.
Kaufman acknowledged people are angry over corporate corruption, but he sought to distance Kozlowski and Swartz from the scandals that roiled Enron, WorldCom and Adelphia.
"Is this a time to win one for the little guy?" Kaufman asked. "But that has nothing to do with facts of the case."
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