Former Tyco President gets jail time
NEW YORK--Former Tyco President Dennis Kozlowski's five month trial ended on Sept. 19 with a sentence of eight- to 25 years in prison, a $70 million fine and joint restitution for Kozlowski and his chief deputy Michael Swartz of $134 million.
Kozlowski and Swartz have been remanded and are in jail. They have asked the appellate court for bail while they await the results of an appeal.
Kozlowski's legacy at Tyco includes overseeing the conglomerate's expansion into the security business including the purchase of ADT, Sensormatic, Tri-Ed Distribution and DSC.
Tyco experienced some of its darkest days following Kozlowski's June 2002 resignation "for personal reasons." Shortly after the resignation, Kozlowski was indicted and charged with conspiracy, falsifying business records, tampering with physical evidence and failure to collect sales tax.
Tyco did not anticipate that Kozlowski's legal problems would affect the company. However, news of his indictment sent company's stock on a downward spiral and share values plummeted to record low of $8.25.
To recoup losses, Tyco layed off 7,100 employees and closed 24 locations.
During this time, the company began to divest some of its non-core fire and security related companies.
Among other charges--such as purchasing a $6,000 shower curtain and spending $2 million on a birthday party on the Italian island of Sardinia for his wife using Tyco's coffers--Kozlowski allegedly bought millions of dollars worth of artwork for his Fifth Avenue apartment and shipped it to New Hampshire to avoid paying about $1 million in state sales tax.
After his resignation, Tyco opened an internal investigation to determine whether corporate funds were used to buy homes for executives, including Kozlowski.
A civil dispute Tyco filed against Kozlowski over millions of dollars of deferred compensation still needs to be resolved.