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Tyco executives found guilty of looting

"These guys ran the company like a personal fiefdom. They did what they wanted and took what they liked. They stepped over the line."

Jacob Zamansky, securities attorney

A jury on Friday found former Tyco International chief Dennis Kozlowski and his top lieutenant guilty of looting the company of hundreds of millions of dollars.

Kozlowski, 58, and former chief financial officer Mark Swartz, 44, were convicted of grand larceny, fraud, falsifying business records and other charges.

Both men, who face up to 25 years in prison on the grand larceny counts alone, were allowed to remain free on bail prior to sentencing, which was tentatively set for Aug. 2.

The jury took nearly 11 days of deliberations to reach their verdict.

A grim-faced Kozlowski said nothing as he left the courtroom with his wife.

"We are very disappointed," Kozlowski lawyer Stephen Kaufman told reporters outside the courtroom.

"But I can assure you that we are appealing the verdict ... and we look forward to that appeal and we have confidence in that appeal ... Today is a day of disappointment, but there's still hope," Kaufman said.

It was the second trial for Kozlowski and Swartz, who stood accused of using the conglomerate as a personal piggy bank to buy real estate and yachts and to pay for lavish parties.

The judge declared a mistrial after the first trial in April last year, citing "outside pressure" on the jury.

Prosecutors charged the pair with stealing US$150 million from Tyco and procuring a further US$430 million by overtly selling shares while artificially inflating the value of the stock.

Swartz's lawyer Charles Stillman suggested that the jury might have been swayed by the sheer size of the sums involved in the case.

"There is no doubt in my mind that he [Swartz] never stole a cent," Stillman told reporters, adding that his client would also appeal the verdict.

Kozlowski was among the top US corporate officials to be charged in the crackdown on corporate wrongdoing in the wake of the scandals at Enron, WorldCom and elsewhere.

Tyco, headquartered in Bermuda for tax reasons, fired Kozlowski after being forced to restate its results to show a multibillion dollar loss.

The company makes a range of products across the security, health care and electronics sectors, and has been streamlining under its new leadership.

Even before Friday's verdict, Kozlowski had become a symbol of corporate excess, with the tabloid press revelling in the details of his misuse of company funds, such as spending US$15,000 on a "dog umbrella stand" and US$6,000 on a shower curtain.

The first trial jury was also shown a video of a US$2 million toga party -- half of it funded by Tyco -- that Kozlowski threw for his wife on the Italian island of Sardinia.

The second trial offered less in the way of sensational evidence, with both the prosecution and defense slimming down their presentations following criticism of the way they handled the original trial.

The other crucial difference this time around was that Kozlowski took the stand in his own defense, insisting that he never received any loan or payment to which he was not entitled.

"These guys ran the company like a personal fiefdom," said securities attorney Jacob Zamansky. "They did what they wanted and took what they liked. They stepped over the line."
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