Ex-Tyco CFO Trying To Make BailOct 4, 2002 | AP
Lawyers for Mark Swartz, the former Tyco International Ltd.'s chief financial officer who has been charged with swindling hundreds of millions of dollars from the company, proposed Friday using $5 million he received from a deferred compensation plan to secure his $50 million bail bond.
That represents an alternative to the 500,000 Tyco shares Swartz initially planned to offer as collateral on the bail. Prosecutors have contended that at least some of the stock stems from the conspiracy period alleged in the indictment, from 1995 to 2002.
Judge Michael Obus of the New York State Supreme Court in Manhattan ruled last week that Swartz has until Oct. 11 to either prove that the stock he offered is not tainted by criminal activity or secure the bail bond with other collateral.
"We wanted to show the judge that we're trying to get this done," Swartz's lawyer, Charles Stillman, said after the hearing, which Swartz didn't attend.
"If that's what they post" as collateral, "we'll still have questions to ask," said Assistant District Attorney John Moscow.
Swartz and L. Dennis Kozlowski, the former Tyco chief executive, were indicted last month on charges they looted Tyco of $170 million and obtained $430 million from fraudulent stock sales. Both have pleaded not guilty.
Kozlowski's former wife offered $10 million to secure his $100 million bail bond, and Judge Obus accepted Kozlowski's bail request.
The former executives ran into problems posting bail because their personal assets, totaling about $600 million, have been frozen.
Swartz could ask the judge who issued the restraining order to unfreeze the assets, but it's not immediately clear if that attempt would succeed.