Tyco’s Former Lawyer Seeks To Drop Charges. The former general counsel for Tyco International Ltd. asked a judge to drop criminal charges against him, saying he never intended to defraud regulators by taking $14 million in interest-free loans from the company.
Mark Belnick has been charged with falsifying business records by failing to disclose the loans, used largely to buy a home in Park City, Utah. At a three- hour hearing Thursday, his lawyer, Reid Weingarten, said all of Tyco’s top executives, directors and auditors knew about the loans and had signed off on them as a relocation expense.
“There was nothing extraordinary about it,” Mr. Weingarten said. “It was viewed at Tyco as the normal course of business.”
State Supreme Court Judge Michael Obus reserved decision, but noted that Mr. Belnick as Tyco’s top lawyer should have been aware of expenses that needed to be included in Tyco’s proxy statements.
“He if nobody else should understand it should be disclosed,” Judge Obus said.
The Manhattan district attorney’s office has depicted a free-wheeling environment at Tyco, where executives allegedly used company funds to pay for personal expenses.
Former Tyco chief executive L. Dennis Kozlowski and former financial chief Mark H. Swartz were indicted in September on charges they stole $170 million from Tyco in unauthorized compensation and obtained $430 million from fraudulent stock sales. They have pleaded not guilty.
Prosecutor John Moscow said in court that Tyco’s shareholders “have a right to know how much money the officers are being loaned.”
Even if Mr. Belnick wasn’t certain that disclosure was necessary, “as a lawyer, you look it up; you seek advice,” Mr. Moscow said. “He did not do that. He never sought outside opinions.”
Mr. Belnick, a former senior partner at the law firm Paul Weiss Rifkind Wharton & Garrison in New York, joined Tyco in 1998. Mr. Weingarten said in court that it was improbable that Mr. Belnick, once a high-profile litigator, put in “years of distinction then turned into a crook.”
Mr. Belnick faces up to four years in prison if convicted.
Judge Obus didn’t indicate when he would rule but scheduled another court proceeding for Feb. 7.
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