Tyco

In: Business and Management

Submitted By jphillip14
Words 839
Pages 4
With more than $600 million stolen from Tyco International, Dennis Kazlowski, former CEO of Tyco, and Mark Swartz, former CFO, have gotten off easy by being released on parole after only eight short years in prison. Throughout the management ranks of Tyco in the late 1990s and early 2000s, corporate greed and excess was rampant until being brought to the attention of the SEC. Dennis Kazlowski created a culture of free spending and excessive greed within the executive ranks of Tyco International. He secretly authorized the forgiveness of tens of millions of dollars of loans to dozens of executives. Without board approval 51 employees received $56 million in bonuses and $31 million more to pay the taxes on those bonuses. He used tens of millions of company money for personal spending, several items he purchased were a $17,000 travelling toilet box, a $15,000 dog umbrella stand, a $6,000 shower curtain, a $2,900 set of coat hangers, a $2,200 wastebasket, and a $1,650 notebook. Along with Kazlowski, Mark Swartz, CFO, and Mark Belnick, General Council, were found to have stolen $600 million through unapproved bonuses, loans and extravagant “company” spending, as well as selling their stock in Tyco without giving the investors of the company notice. These transactions were usually kept off the accounting books, away from the eyes of the shareholders and board members. However in June of 2002, Kozlowski was investigated for tax evasion on $13 million worth of art that was paid for by a Tyco loan. The Manhattan District Attorney, Robert Morgenthan, dug deeper into the financial reports of Tyco International and found abuse of loan programs and executive bonuses, thus getting the SEC involved. In 2005, Kozlowski and Swartz were found guilty on counts of grand larceny, conspiracy, falsifying records and violating business laws. Belnick paid a $100,000 civil penalty…...

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