Defense Calls For Second Mistrial Rejected In Tyco Case

by Glen Shapiro, LawAndTax-News.com, New York

28 January 2005

According to reports, defense attempts to have a mistrial declared for the second time in the case against former Tyco chief executive, Dennis Kozlowski and CFO Mark Swartz have been rejected by Supreme Court Justice, Michael Obus, who is presiding over the retrial of the two men.

Learning the lessons of the original trial, which collapsed last year, prosecutors have sought to avoid sensationalising the case by drawing attention to the extravagant purchases made by Kozlowski and Swartz with the Bermuda-based firm's money.

However, in opening statements delivered on Wednesday, the men were accused of "stealing, pure and simple".

According to the New York Law Journal, Assistant District Attorney, Owen Heimer alleged that:

"Unknown to Tyco's owners and shareholders, they were systematically looting [the] corporation, a corporation they were pretending to serve."

Stressing that the former executives were very well compensated by the firm, but still authorized around $150 million in illegal bonuses for themselves, Mr Heimer asked the jury not to be overwhelmed by the large sums handled by the two men in their former roles, arguing that:

"The corporate assets these two men made decisions about were not their assets. They were the shareholders' assets."

However, according to the NYLJ, the constant references to Tyco's shareholders aggravated the defense team, as did the suggestion that Kozlowski and Swartz committed fraud by not disclosing the unauthorised transactions on the company's proxy statement.

The mistrial motion raised by Kozlowski's legal team in relation to the latter allegation was denied by Justice Obus. However, he reportedly told the defense team that he would consider instructions to the jury on the other matters raised.

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