NEW YORK — A state jury Friday convicted former Tyco International Ltd. Chief Executive L. Dennis Kozlowski and a top deputy of stealing tens of millions of dollars from the company, scoring a victory for government prosecutors in their assault on corporate crime.
The two men, once two of America's highest-paid executives, were accused of bankrolling lavish personal lifestyles with money from industrial conglomerate Tyco, whose diverse products include sprinklers and security systems.
Kozlowski became an icon for corporate excess after throwing a Roman-themed birthday party for his wife on the Mediterranean isle of Sardinia in 2001 -- and sticking Tyco with half of the $2-million bill.
He and former Chief Financial Officer Mark Swartz face up to 30 years in prison, although legal experts said their terms could be as short as six years. A presentencing hearing is set for Aug. 2.
After a four-month trial and 11 days of deliberations, a Manhattan jury convicted each man on 22 of 23 counts of grand larceny, conspiracy, securities fraud and falsifying business records. Each was found not guilty on one count of falsifying records.
"The verdict is an endorsement of the principle of equal justice under the law," said Manhattan Dist. Atty. Robert Morgenthau. "Crimes committed in corporate offices will be treated according to the same standards as other crimes. No one is above the law."
Defense lawyers expressed disappointment and vowed an appeal, but they declined to discuss grounds for a challenge. The two defendants, whose first trial ended in a mistrial last year, remain free on $10-million bail each pending sentencing.
The conviction follows government victories against several other business figures accused of financial crimes, including former WorldCom Inc. Chief Executive Bernard J. Ebbers, lifestyle entrepreneur Martha Stewart and Silicon Valley investment banker Frank Quattrone.
As in those cases, the Tyco convictions will send ripples through executive suites around the country, said Georgetown University finance professor James Angel.
"Every time there is a successful prosecution of a high-profile white-collar criminal case, it sends a strong message to other would-be white-collar criminals that they could wind up in jail," Angel said.
Kozlowski, 58, and Swartz, 44, built Tyco International into a diversified industrial company through a series of acquisitions, generating rich rewards for the executives. The two took home legitimate compensation of almost $300 million from 1999 to 2001.
