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Tyco Faked Luxury Apartment Addresses, Jurors Told

Testimony centers on a maze of complicated accounting, including a special account for L. Dennis Kozlowski.

November 11, 2003|From Reuters

Tyco International Ltd. devised phony addresses to hide the actual location of luxury apartments used by L. Dennis Kozlowski and Mark Swartz, a company accountant testified Monday at the trial of the two former executives.

Sheila Rex, an accountant for Tyco, testified that her department came up with fake addresses because "in the chartered accounts we didn't want anyone to know the actual location" of executive apartments in New York City.

Kozlowski and Swartz, Tyco's former chief executive and chief financial officer, respectively, are on trial on a 35-count indictment accusing them of looting Tyco of $600 million. While working in New York, both stayed in luxury apartments paid for by Tyco.

Rent on one of the apartments ran $264,000 one year, according to evidence introduced during Rex's testimony.

To keep the addresses secret, Kozlowski's apartment at 950 Fifth Ave. was listed on the company's accounts as 950 Park Ave. The Swartz apartment, located at 30 E. 85th St., was listed as East Street Condo.

Tyco accountants also kept separate records for furnishings in the apartments, Rex testified. When asked why, she said "furniture and fixtures have a different depreciation than a building." Tyco has said that Kozlowski's apartment was furnished with a $6,000 shower curtain and a $2,200 wastebasket, among other lavish items.

Much of Monday's testimony centered on a maze of complicated accounting at Tyco, including a special account that allowed Kozlowski to borrow company money interest free for party expenses and other miscellaneous costs.

The account had to be paid or "reclassified" within 30 days, Rex, a prosecution witness, testified. Among the items listed in one record of Kozlowski's special account were three bills from Carlson Marketing Group, which Rex said was an event planner, totaling more than $750,000.

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