Ex-Tyco Chief Kozlowski Will Say Tax Charges Are Faulty

by Mike Godfrey, Tax-News.com, New York

15 August 2002

Ex-chief of Bermuda-based Tyco, Dennis Kozlowski's lawyers were in Manhattan State Supreme Court yesterday for a hearing at which a judge set a schedule for the filing of pretrial motions.

Stephen Kaufman, his attorney, appeared on his behalf and said afterwards the defence would argue that sales tax evasion cases have historically pursued stores, or sellers, instead of buyers. He said the case is unusual because it is one of the first times New York County had pursued a buyer for not paying sales tax.

Mr Kozlowski has pleaded not guilty to charges that he avoided paying taxes of more than $1m on purchases of artworks ostensibly delivered to Tyco in New Hampshire but actually delivered to his downtown apartment. He resigned from Tyco soon before the indictment was filed in June.

Meanwhile Richard Power, a vice president at the firm until late June, filed suit in federal court in Manhattan, claiming his contract entitles him to a payment of double his final-year pay of $4.65 million.

Tyco shares gained 3.9% to close Wednesday at $12.90 on the New York Stock Exchange, down from more than $60 at their peak.

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