Tyco Scandal

http://www.nbcnews.com/id/9399803/ns/business-corporate_scandals/t/ex-tyco-executives-get-years-prison/#.VkunJ7erQgs

http://money.howstuffworks.com/cooking-books10.htm

https://www.sec.gov/litigation/litreleases/lr17722.htm

http://www.nytimes.com/2002/09/13/business/2-top-tyco-executives-charged-with-600-million-fraud-scheme.html?pagewanted=all

http://www.bloomberg.com/news/articles/2013-10-03/tyco-s-former-finance-chief-mark-swartz-granted-parole

http://www.nytimes.com/2015/03/02/business/dealbook/dennis-kozlowskis-path-from-infamy-to-obscurity.html?_r=0

Actions pursued

What about Tyco?

• Who pursued this? SEC (Securities and Exchange Commission)
• Why? Undisclosed compensation
• Belnick, accused of taking a $17 million bonus
• Belnick was acquited of all charges
• In 2005 Kozlowski and Swartz were sentenced to 25 yrs with parole eligibility after 8 1/3 time is served
• Court ordered kozlowski to pay 70 million in fines Swartz 34 fines
• Belnick had to pay a 100,000 civil penalty

Tyco currently has 250,000 employees with 40 billion dollars in annual revenue

Current CEO? George Oliver

Works cited

What now?

Tyco Scandal

Mark Belnick cuurently owns a successful law firm in New York, NY

After serving 8 1/3 of his jail sentence Dennis Kozlowski now lives with his 3rd wife in 2 bedroom apartment. He has successfully completed parole and is no longer under supervision. He now purchases his shower curtains from Bed Bath &Beyond. He now enjoys his free time eating avocadoes and spending time with his grandchildren.

Dalia Pace, Connor Good, Taylor Smith, Alex Williams

Mark Swartz also served 8 1/3 of his jail sentence and has also successfully completed parole. In 2012 he sued Schaffhausen, Switzerland-based Tyco, seeking to recover $60 million he said they owed him before he stepped down in 2002

What is Tyco?

• Tyco is a securities system company with headquarters in West Windsor, N.J.

How much money?

600 million

52 million

2 million

Individuals

15,000

450

6,000

Variables

When? 2002

Wrongdoings? Dennis Koslowski, Mark Swartz, Mark Belnick were accused of giving themselves interest-free or very low interest loans (they disguised as "bonuses") this money was never approved by Tyco's board. They were also accused of selling their company stock without telling investors, which is a violation of SEC rules.

Victims

Timeline?

• From 1999-2000 Tyco was investigated (accounting practice

• June 2002 Kozlowski was being investigated for tax evasion of 8.25 percent on a 14 million dollar portrait that he purchased with company funds. Kozlowski then resigned due to "personal reasons".
• In Sept 2002, Kozlowski, Swartz, and Belnick were no longer employed at Tyco and charges were filed against them for failure to disclose information on their multimillion dollar loans to shareholders.

Who was invovled?

• Denis Kozlowski: Tyco's former CEO
• Mark Swartz: Tyco's former finance chief
• Mark Belnick: Tyco's former chief legal officer

Who were the victims?

This victim included:

• shareholders
• employees
• stakeholders.
• The whole company has immensely suffered. Stock prices had fallen sharply and the people who were involved had experienced the problems.

• Kozlowski and Swartz were ordered to pay a total of 134 million in restitution

Typology?

Corporate crime: Kozlowski, Swartz and Belnick were all employees of Tyco and they all committed illegal and harmful acts with intentions to promote personal interests.

Includes corporate theft and corporate financial manipulation

Legal Codes

• 26 U.S. Code § 7201 - Attempt to evade or defeat tax
• Kozlowski attempted to evade taxes in 2002
• 18 U.S. Code Chapter 96 - RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
• 18 U.S. Code § 1348 - Securities and commodities fraud
• Kozlowski, Swartz and Belnick attempted to defraud stockbuyers by manipulating projected future delivery
• Grand Larceny in the fourth degree