The New York state court jury in the criminal trial against former Tyco International Ltd. CEO L. Dennis Kozlowski and former Tyco finance chief Mark H. Swartz has rendered a guilty verdict against the two former Tyco executives on 22 of 23 counts, including grand larceny, conspiracy, securities fraud and falsifying business records. In essence, the jury concluded that the two had masterminded a scheme to loot Tyco of millions of dollars in unauthorized compensation and perks.
The result is not particularly surprising, especially after Mr. Kowlozski’s less-than-inspiring performance on the witness stand (see previous posts here and here). Prosecutors will propose that the two serve between 15 and 30 years in prison, but my sense is that the two will be sentenced to considerably less than that. Sentencing is tentatively scheduled for August 2.
During the trial, prosecutors contended that Messrs. Kowlozski and Swartz stole millions in secret bonuses, including the forgiveness of $37.5 million in loans from Tyco. The defense contended that the two former executives did not hide the bonuses from either the Tyco board or outside auditors and, thus, lacked the requisite mens rea to commit the crimes alleged.
The first Tyco trial ended with a mistrial last year under colorful circumstances after two weeks of jury deliberations when one of the jurors — who, it was later learned, had been holding out in favor of acquittal — received a letter she perceived as threatening. The juror’s name had been published by several media outlets after she had appeared to make a “thumbs up” hand signal to the defense team in court. After the declaration of mistrial, several of the jurors said that the panel was 11-1 in favor of conviction on most counts.
Houston's Clear Thinkers
Longtime Houston attorney Tom Kirkendall's observations on developments in law, business, medicine, culture, sports, and other matters of general interest to the Houston business, professional, and academic communities.
I define myself as an utter naif when it comes to the US “justice” system and I have followed Dan Bayly’s ordeal through the mind and heart of a family member. What a foul way for me to learn about the machinations of those whose lives and egos depend upon the successful wielding of such misguided, nefarious power. I have now been educated in the ways of the arcane backwaters of corporate malfeasance — my ignorance dulled at the cost to a human and his family that I cannot fathom.
When I learned through a phone call of Dan’s fate for the next 2 years, I was left speechless…as I have been left so many times since this ugly affair began. What can one say? How can one possibly claim to feel this family’s pain when there is simply no earthly comparison to be made? I hung up with tears clogging my throat as I avowed my love and support for my friend and her dear relatives. Anything more I might say would simply expose the depths of my remaining knowledge pits, so let me stay with the emotional thread and say that, to this mind and heart, a great crime against simple, hardworking, unselfish humanity has been committed and that, were we living in the days of blood revenge, there would be predecent enough in this case.