Former Tyco Tax Chief Accused Of Tax Evasion

by Leroy Baker, Tax-News.com, New York

14 September 2006

A former vice president of Tyco International has surrendered to authorities and will face charges that he falsified the company’s 1999 tax return.

Raymond Scott Stevenson, former vice president in charge of taxation for the company, is charged with intentionally failing to report more than $170 million in income on Tyco International Ltd.’s 1999 corporate tax return.

Stevenson was Tyco’s top tax advisor and served as Tyco’s Vice President in charge of taxation, where his responsibilities included overseeing the preparation and filing of Tyco’s corporate tax returns. According to the US Department of Justice, as the head of tax at Tyco, Stevenson directed a series of transactions designed to reduce Tyco’s state tax liability. In doing so, an approximate $170 million federal capital gain was incurred by Tyco.

Stevenson entered a plea of not guilty before US Magistrate Judge Linnea R. Johnson in Fort Pierce, Florida. The violation carries a maximum sentence of three years in prison and a $250,000 fine.

Last year, Tyco's CEO L. Dennis Kozlowski and former chief financial officer, Mark Swartz were sentenced to maximum prison terms of 25 years for their theft of unauthorized loans and bonuses from the company.

The two were found guilty in 2005 on 22 of 23 counts, including grand larceny, conspiracy, securities fraud and falsifying business records, and were said to have received more than $150 million in unauthorized loans and bonuses from Bermuda-based Tyco.

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