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Judge Declines to Dismiss Case Against Ex-Tyco Chief

June 24, 2003|From Reuters

A New York judge ruled Monday that the criminal case against Tyco International Ltd.'s former chairman, L. Dennis Kozlowski, could proceed and scheduled the trial to begin in late September.

Ruling against a defense motion to have the case dismissed, state Supreme Court Justice Michael Obus said there was enough evidence to support the grand jury's indictment of Kozlowski and former Tyco finance chief Mark Swartz.

Kozlowski and Swartz face charges accusing them of defrauding Tyco of more than $600 million through unauthorized compensation and fraudulent stock sales. Both have pleaded not guilty. Kozlowski faces up to 30 years in prison if convicted.

"There is sufficient evidence that the defendants took money from Tyco that they were simply not permitted to. Whether that is true or not ... will be decided at trial," the judge said.

Obus also denied a defense motion to postpone the Sept. 29 trial. The next hearing is scheduled for July 10 to deal with mechanics of the trial. Swartz's lawyer, Charles Stillman, said, "The die is cast. We are going to return to prepare the case for trial."

Kozlowski, free on $10 million bail posted by his ex-wife, declined to comment.

Kozlowski, who resigned a year ago, used acquisitions to turn Tyco into a conglomerate that made everything from ADT burglar alarms to trash bags and medical equipment. But Tyco has been forced to disclose $2 billion of accounting-related problems, has come under investigation by securities regulators and has been named in a rash of lawsuits by shareholders.

In a separate case, federal tax-evasion charges against Swartz were dismissed, his lawyer said Monday.

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