Print

Email story

Comment

Email editor

Tyco trial heads into closing arguments

NEW YORK - The former chief financial officer of Tyco International Ltd., accused of stealing tens of millions of dollars from the company, believed that all the money he received from Tyco was authorized, his lawyer said Monday in summing up.

Lawyer Charles Stillman said that because Mark Swartz believed he had done nothing wrong, he never tried to conceal the loans and compensation he got from Tyco. Stillman gave the jury a slogan by which to deliberate: "No criminal intent means no crime."

"The DA must prove beyond a reasonable doubt that Mark intended to steal the money," Stillman told jurors as he offered his closing arguments in Manhattan's state Supreme Court. "They've proven no such thing."

Swartz, 44, and L. Dennis Kozlowski, 58, Tyco's former chief executive officer, are accused of stealing $170-million from Tyco by hiding unauthorized pay and bonuses and by abusing company loan programs. They are accused of making $430-million by inflating the value of Tyco stock by lying about the company's finances.

Swartz, at Tyco from 1991 until September 2002, is charged with grand larceny, falsifying business records and securities fraud. Kozlowski is similarly charged. Both face up to 25 years in prison if convicted on just one of the first-degree grand larceny counts against them.

The former executives' second trial is ending more than a year after their first trial ended in a mistrial because a juror, identified by some news media and depicted as being a defense holdout, reported receiving threats. That former juror, Ruth Jordan, was in court on Monday watching the closing arguments.

Swartz took the witness stand in his defense at both trials. During the second trial, he stated flatly, "I never stole money from Tyco." Stillman said an incentive compensation plan instituted before Swartz became Tyco's CFO provided that bonuses would be paid based on Tyco's financial performance. He said the company usually met its targets and the executives were paid.

"Mark never received a penny more than was provided under his bonus formula," Stillman said.

The lawyer alluded to one of the larceny counts against his client. Swartz is accused of stealing $12.5-million by forgiving a Tyco loan to himself.

Stillman said that loan forgiveness was part of a bonus Swartz was to receive and had been approved by the appropriate members of the board of directors. He said Swartz thought he was carrying out the board's wishes in 1999 when he took the $12.5-million as loan forgiveness rather than as a cash-and-stock bonus.

"If you're still wondering if Mark Swartz did anything wrong in the first place," Stillman said to the jury, "then that means that the prosecution did not prove its case beyond a reasonable doubt."

Stillman's associate, James Mitchell, took over the summations in the afternoon, telling the jury that the prosecution was based partly on the notion that Kozlowski and Swartz hid bonuses from Tyco's board of directors.

But Mitchell presented minutes of a board meeting on March 26, 2000, showing that one such bonus - worth a total of $61-million - was discussed. He also said no one at that meeting, according to those minutes, raised questions about the bonus. Mitchell said that when Swartz got his share of that bonus he took "not five cents more than he was due."

Kozlowski's lawyers are expected to present closing arguments today.

[Last modified May 24, 2005, 03:00:27]