Former Tyco Execs' Bond ChallengedSep 27, 2002 | AP Prosecutors asked a judge Friday to reject the bail money posted by two former executives of Tyco International Ltd. because it allegedly came from proceeds of their crimes against the company.
"I ask that the defendants be in (jail) because the bail ... posted is not consistent with public policy," Assistant District Attorney John Moscow told state Supreme Court Justice Michael Obus.
The judge recessed the court while he prepared a decision on whether to accept the bail packages posted last week by former Chief Executive L. Dennis Kozlowski and former chief financial officer Mark Swartz.
Kozlowski's ex-wife, Angie, had posted $10 million bail on his $100 million bond.
Swartz, posted $5 million security on his $50 million bond with shares of Tyco stock.
Obus had called the hearing into the source of the money after prosecutors contended it was stolen from the company and should not be used for bail.
Kozlowski and Swartz were charged two weeks ago with enterprise corruption and grand larceny for allegedly stealing some $600 million from Tyco. They face up to 25 years in prison on each of those charges if convicted. A third executive, former general counsel Mark Belnick, was charged with falsifying business records to cover up $14 million in improper loans.
At Friday's hearing, Kozlowski's lawyer, Stephen Kaufman, told the judge that despite his client's wealth, "He's paralyzed economically."
"The irony is that, for bail purposes, my client is indigent," Kaufman added.
Prosecutors earlier this month filed criminal charges against the men after the Securities and Exchange Commission accused them of hiding huge loans and other money they allegedly took out of Tyco.
The SEC said Kozlowski used $242 million from an employee loan program, established to help workers buy Tyco stock, to pay for yachts, fine art, jewelry, luxury apartments and vacations.
Kozlowski already had been indicted in June on charges of evading New York sales taxes on $13 million in art, including works by Renoir and Monet.
He resigned from Tyco a day before being indicted. He has pleaded innocent in that case.