Tyco Execs Await Jury Verdict

Tyco chief financial officer Mark Swartz (left, March 29, 2004) and Tyco's former CEO, L. Dennis Kozlowski (March 26, 2004).
Jurors at the Tyco International trial asked Monday for a readback of chief financial officer Mark Swartz's testimony about a $12.5 million loan that was forgiven.

The jury, in its third day of deliberations in state Supreme Court in Manhattan, is weighing whether Swartz and L. Dennis Kozlowski, Tyco's former chief executive, looted the company of $600 million.

The readback jurors requested was of Swartz's testimony regarding a $12.5 million loan he was given in lieu of part of a bonus he was due to receive.

Swartz and Kozlowski are charged with 32 counts of grand larceny, falsifying business records and violating state business laws. They each could face up to 30 years in prison if convicted.

The jury also asked Monday for a readback of testimony from a lawyer on whether the loan needed to be put on a proxy statement that was seen by shareholders. Jurors finished deliberating Monday evening without reaching a verdict and were to continue Tuesday.

During the nearly six-month trial, Swartz testified that he did not do anything he believed was illegal. He said he and Kozlowski received bonuses and loan forgiveness at many informal company board meetings at which no minutes were recorded.

Jurors had heard 47 witnesses and saw more than 700 exhibits, including two videotapes of a birthday bacchanal on a Mediterranean island and an $18 million Fifth Avenue apartment with a $6,000 shower curtain in the maid's room.

On Friday, Justice Michael Obus answered several requests from the jury including an explanation of the terms "criminal intent" and "good faith."

On Thursday, the first day of deliberations, the jurors asked for a chart prosecutors used during summations to list 68 overt acts they say the defendants committed as part of their alleged conspiracy. Obus told jurors he would read any or all of the list if they requested.

Prosecutors say Kozlowski, 57, and Swartz, 43, stole $170 million to finance their lavish lifestyles by taking unauthorized bonuses and abusing company loan programs. They say the two netted an additional $430 million by pumping up Tyco's stock price and selling their shares from 1995 through 2002.

The defense argued that the men earned every dime and the board of directors and the company's auditors knew about the compensation and never objected. Kozlowski once made more than $100 million in one year.

Kozlowski's defense team rested last month without calling any witnesses.

Tyco, which has about 270,000 employees and $36 billion in annual revenue, makes electronics and medical supplies and owns the ADT home security business. Its operations headquarters are in West Windsor, N.J., but the company is based in Bermuda.

By Samuel Maull