Trial of Ex-Tyco Execs Nearing End

NEW YORK — Three days after the criminal conviction of Martha Stewart, another closely watched corporate trial neared a conclusion Monday as a lawyer for a former Tyco International Ltd. executive told jurors his client wasn’t part of a scheme to loot $600 million from the company and its investors.

Although the case against ex-Tyco Chief Executive L. Dennis Kozlowski and onetime finance chief Mark Swartz was overshadowed by the spectacle of the Stewart proceedings two blocks away, it could have far greater significance as a string of corporate prosecutions reaches a zenith in coming months. The Tyco trial is likely to be the first of several cases in which juries decide whether top executives lined their own pockets through securities and accounting fraud.

Among other allegations, the Manhattan district attorney’s office has accused Kozlowski and Swartz of stealing millions of dollars by granting themselves bonuses without the knowledge of Tyco’s board of directors. They also took loans from the company that they later decreed did not have to be repaid, prosecutors have charged.

Charles Stillman, Swartz’s attorney, told jurors in his closing argument Monday that Tyco directors were aware of the money his client received, even though there was little paperwork indicating that the board approved the payouts.

Swartz did not believe for a “nanosecond that he was doing anything wrong,” Stillman said. “There is not a shred of evidence that Mark Swartz acted with any criminal intent.”

The trial, which began in late September, is expected to go to the jury this week. Kozlowski’s lawyer is expected to give his closing argument as early as today, followed by a summation by prosecutors.

Kozlowski in particular has been portrayed as an emblem of corporate extravagance. Prosecutors showed the jury a video of a $2-million, Roman-themed birthday party that Kozlowski threw for his wife on the island of Sardinia. Prosecutors say Kozlowski charged half the gala, which featured toga-clad waiters and an ice sculpture spurting vodka, to Tyco.

Prosecutors say Kozlowski also billed to Tyco a variety of personal items ranging from expensive homes to a $6,000 shower curtain.

Authorities say Kozlowski and Swartz stole $170 million from the company and reaped another $430 million by selling Tyco shares after illegally pumping up the stock price.

The two men face a combined 32 counts that include grand larceny and falsifying business records. Each faces more than 25 years in prison if convicted.

On Monday, Stillman detailed the multiple bonuses that Swartz received over the years at Tyco, arguing that Swartz never sought to hide the fact that he received the payouts.

Stillman also sought to play down a key contention against Swartz: that he did not declare a $12.5-million loan on his taxes. Stillman said others were responsible for handling the taxes.

“There is not a shred of evidence that Mark had anything to do with that mistake, and that’s what it was, a mistake,” Stillman said.

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Reuters was used in compiling this report.