News

Former Tyco execs charged with fraudulent practices

September 11, 2002

NEW YORK -- Former Tyco International Inc. (NYSE:TYC) chief executive officer Dennis Kozlowski and former chief financial officer Mark Swartz were charged with enterprise corruption in the theft of $600 million in securities and company funds in Manhattan on Sept. 12.

Tyco is the parent company of touchscreen manufacturer Elo TouchSystems Inc.

Manhattan District Attorney Robert Morgenthau filed the charges, alleging that Kozlowski and Swartz conspired to steal more than $170 million from Tyco, and obtained an additional $430 million through the fraudulent sale of securities. In addition, former Tyco general counsel Mark Belnick was charged with falsifying business records.

The indictments were filed less than an hour after the Securities and Exchange Commission filed a civil complaint against Kozlowski, Swartz, and Belnick for failing to disclose low- or no-interest loans they had obtained from the company.

During a news conference on Sept. 12, Morgenthau said Kozlowski and Swartz had created a criminal enterprise "for the purpose of stealing money from Tyco and defrauding investors by falsifying records, concealing material information, and providing false information to Tyco's board of directors and stockholders."

Kozlowski resigned from Tyco in June, one day before he was indicted on charges of evading sales taxes on $13 million worth of art. On Sept. 12, the company sued him, seeking the return of more than $100 million.