Appeals Court Upholds Convictions Of Tyco Executives

The New York State Court of Appeals has upheld the convictions of Tyco International Ltd. executives – former CEO L. Dennis Kozlowski and former CFO Mark Swartz – who were sentenced to prison in 2005 for fraud, grand larceny, and other charges, accused of taking more than $150 million from the company in bonuses. The Court rejected defense arguments that the trials were flawed and that the convictions should be reversed.

The pair were sentenced to about 8 to 25 years in prison for taking unauthorized payments. Both were ordered to pay back the bonuses. Kozlowski was also fined $70 million while Swartz was fined $35 million.

The appeal of Kozlowski and Swartz argued that the findings of an internal corporate investigation should have been part of the trial and that a lower court abused its authority in rejecting the defendants’ subpoena to access certain documents prepared during the internal probe. Defense lawyers also argued that testimony by a prosecution witness, a lawyer who conducted an internal investigation into Tyco’s financial transactions, unfairly prejudiced the jury.

The judges were unanimous in upholding the prior conviction.