Tyco's Ex-Lawyer Cleared Of Securities Fraud And Grand Larceny Charges

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

19 July 2004

Tyco's former general counsel, Mark Belnick was last week acquitted of charges of securities fraud and grand larceny brought against him by the office of Manhattan District Attorney, Robert Morgenthau.

The case against Mr Belnick centred on loans and bonuses received by him from company coffers, which the prosecution alleged were hidden from Bermuda-based Tyco's shareholders and directors.

However, testifying over the course of several days, Mr Belnick explained that as former chief executive Dennis Kozlowski had approved the $14 million loan that he received for moving, he assumed that the board was fully informed.

He also alleged that he had been misinformed by former chief financial officer, Mark Swartz regarding the necessity of recording the loans on the company's proxy statements.

Refuting the suggestion that he had received a $17 million bonus payment from Kozlowski as a reward for covering up suspicious payments to the former chief executive's girlfriend, Mr Belnick testified that he had received the payment as a result of his efforts in resolving an SEC accounting investigation.

"Every dollar I received at Tyco I earned. Every dollar I received was authorized," he told the jury.

A retrial of Kozlowski and Swartz is set to begin next January, after their earlier grand larceny and fraud trial collapsed amid controversy sparked by the actions of a juror.

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