Former Tyco Executives Allowed To Advance Controversial Defense, Says Judge

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

25 September 2003

New York State Supreme Court Justice Michael Obus this week ruled that former Tyco chief executive, Dennis Kozlowski, and chief financial officer, Mark Swartz should be permitted to enter a controversial defense against charges of grand larceny levelled against them.

According to reports, the prosecution team had attempted to block an argument which stated that the transfer of more than $600 million of company money to the two top-level executives was not undertaken with criminal intent, and that the millions of dollars were actually loans and bonuses approved by Tyco's board and external auditors.

However, ruling on Tuesday, Justice Obus suggested that:

"Given that the prosecution is saying that the defendants took or received money, the defendants are entitled to show that the circumstances under which they got the money was not criminal."

According to the Associated Press, assistant New York district attorney, Marc Scholl has dismissed the defense argument as "rhetoric and sophistry", arguing that even if the firm's board and auditors were aware of the fund transfers, they were still illegal.

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