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Judge Says Trial For Kozlowski, Swartz Will Start By June 1

Nov 13, 2002 | The Boston Globe

The heckling of disgraced former Tyco International chief executive L. Dennis Kozlowski began outside the courthouse in Lower Manhattan.

Stuck in a slow-moving line of people waiting to get into the building and past security, Kozlowski was surrounded by television cameras and still photographers. And others in the line took notice of the man accused of looting the company he helped build of hundreds of millions of dollars and defrauding investors of even more.

''Give me some of your money,'' someone yelled. ''Is he from Enron?'' asked another person. ''No, Tyco,'' came the response from another person in line.

Inside state Supreme Court Justice Michael Obus's courtroom, the zingers continued. For just a scheduling hearing in the criminal case of Kozlowski, 55, and former chief financial officer Mark Swartz, 42, the tension between prosecutor John Moscow and the defense attorneys was palpable, even though Obus said the trial would begin by June 1. But the judge did not set a specific date.

Both Kozlowski and Swartz had requested to have condition of their bail modified. In Kozlowski's case, he wanted to go to his chalet in Beaver Creek, Colo., between Dec. 20 and Jan. 15 to spend the holidays with family and friends.

''Mr. Kozlowski does not want to miss Christmas holidays with family,'' said Moscow, urging Obus to reject the bail adjustment. ''But the people who invested in Tyco stock may not be able to afford a Christmas.''

Swartz, too, wanted to be able to go to California to visit his in-laws who posted much of his $5 million bond, as well as travel to his properties in New Hampshire and working farm in Virginia. Moscow asserted that Swartz simply wanted to go to New Hampshire to visit his son.

Obus, however, said that the bond posted by Swartz and the $10 million Kozlowski's former wife put up for him, will ensure that they appear in court. ''This is not sentencing, and we are not here to punish them,'' Obus said.

The lawyers argued over how much time is needed to file motions and prepare for the trial. ''The defense wants to try this case on the 12th of never and we are prepared to do it considerably sooner,'' said an official with district attorney Robert Morgenthau's office.

Kozlowski's attorney, Stephen Kaufman, said there are some 600 boxes of documents in the case, and the defense has seen only 42. ''The indictment refers to alleged conduct over seven years, there are voluminous records to which we do not have access, board minutes, audit trails. The key employee loan program, in fact is a program that was started in the mid-1970s, 16 years prior to Mr. Kozlowski becoming chief executive, and the alleged unlawful payments were repaid.''

Kozlowski and Swartz are accused of using the employee loan program and relocation programs as part of their efforts to steal more than $170 million from the company.

''We are dealing with skillful lawyers who know what they are doing, and they are stalling,'' said Moscow. The prosecution is concerned that without a trial date, Kaufman and Charles Stillman, who represent Swartz, will have other cases that will prevent them from representing their clients in this case anytime soon.

Moscow, pressed for an April 1 trial date, saying the case was not complicated.

''We are not dealing with an identity defense. There are no alibi witnesses. They received the money alleged, and it is a question of authority,'' said Moscow. ''Did they have the right to take the money. It is not a difficult question.''

He said the number of witnesses will be small, ''Friends and former friends of the defendants and some people who sold them goods and billed Tyco. There are diamond bracelets and yachts. If the defense can convince a jury that these were purchased for business purposes, then they will be acquitted.''

Moscow said the investigation started three months before the grand jury voted to indict in September and ''the number of people assigned to the prosecution's investigation was fewer than the number of people around the defense table.'' Including Kozlowski and Swartz, there were seven men.

Kaufman retorted that Moscow was trivializing the concerns of the defense. ''We are not playing a game. I am not trying to generate fees. I am here to present the best defense possible.''

Obus set the next court date for Feb. 7, which is also the day that the district attorney must respond to defense motions which are all due by Jan. 10.

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