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Wednesday, February 11, 2004

I did nothing illegal, says Tyco ex-CFO during trial



The Associated Press

NEW YORK - Tyco International Ltd.'s former chief financial officer Mark Swartz testified Tuesday that he didn't do anything he thought was illegal during the 11 years he worked at the company.

Swartz took the stand after the defense team for his co-defendant, former Tyco chief executive L. Dennis Kozlowski, rested its case without calling any witnesses.

Defense lawyer Charles Stillman inquired how long Swartz had worked at the company, and then asked: "During the time you were at Tyco, did you ever take any action that you believed was wrong or illegal?"

"Absolutely not," Swartz replied.

The defense then proceeded with questions designed to lay groundwork for later testimony.

The defendants are accused of stealing $600 million from the company. Kozlowski, 57, and Swartz, 43, are in the fifth month of a trial at Manhattan's state Supreme Court on charges of grand larceny, enterprise corruption, state business law violations and falsifying business records.

Prosecutors say the two stole $170 million by hiding unauthorized pay and secretly forgiven loans in major Tyco transactions. They allegedly made another $430 million on Tyco shares by lying about the company's financial condition from 1995 into 2002.

Defense lawyers say Kozlowski and Swartz earned all the benefits they got from Tyco and that all the appropriate overseers knew about their compensation and loans.

Justice Michael Obus rejected defense motions last week to declare a mistrial or dismiss all the charges.

The judge said prosecutors presented enough evidence that the defendants intentionally looted Tyco and tried to cover up to let the jury deliberate on the charges.

However, the judge said he would rule later on dismissing the top count, enterprise corruption. If convicted on that charge alone, the defendants each would face up to 25 years in prison.

The enterprise corruption charge, which describes a group with a "continuity of existence, structure and criminal purpose," is usually aimed at organized crime.




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