Tyco Fires General Counsel As Scandal Probe Widens

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

11 June 2002

Rocked by the resignation of its leader Dennis Kozlowski last week after he was indicted on sales tax fraud charges in New York, the Bermuda-based conglomerate Tyco International Ltd yesterday dismissed its general counsel, Mark A. Belnick, after a clash with David Boies, an outside lawyer who is leading Tyco's internal investigation into alleged misuse of corporate funds.

Mr Boies apparently accused Mr Belnick of receiving $20 million in undisclosed compensation from the company between 1999 and 2001 and of refusing to cooperate with the internal probe. After the firing, Stanley Arkin, Belnick's attorney, confirmed that Mr. Belnick received the $20 million from Tyco but said all his compensation was properly disclosed.

A statement by the company said that it was investigating Mr. Belnick and had "lost confidence in Mr. Belnick's willingness and ability to conduct a fair and complete investigation."

The Manhattan District Attorney's office last week charged Mr. Kozlowski with evading more than $1 million in state sales taxes on the purchase of $13 million of paintings, although he pleaded not guilty at a court appearance on Tuesday. Kozlowski was said to have made purchases of artworks using money advanced by the company to buy stock options. The indictment has been followed by allegations that Kozlowski was also secretly using company funds to buy real estate for his personal use and that a Tyco director secretly sold real estate to the company.

Recommended