Ex-Tyco Chiefs Whisked Off to Prison

NEW YORK — Former Tyco executives Dennis Kozlowski and Mark Swartz were sentenced to 81/3 to 25 years in prison Monday for looting nearly $600 million from their firm in a scheme that came to symbolize corporate greed during the bull market of the 1990s.

New York Supreme Court Justice Michael Obus also ordered the two to pay more than $134 million in restitution, and imposed fines of $70 million on Kozlowski and $35 million on Swartz.

Kozlowski and Swartz asked Obus for leniency. But the judge ordered them imprisoned immediately, despite arguments from defense lawyers, who said they would seek bail pending an appeal.

Kozlowski, 58, and Swartz, 45, both dressed in dark gray suits, were led away in handcuffs as some relatives cried quietly.

Swartz managed a quick, reassuring glance over his shoulder at his wife, Karen, as he was led away.

The former executives were taken to the jail adjoining the courthouse for initial processing, said Thomas Antenen, a spokesman for the New York City Department of Correction.

Obus called the grand larceny and other charges underlying the convictions “extremely serious,” but distinguished the Tyco case from other white-collar crime cases, such as WorldCom.

The prison terms Obus imposed fell short of the 15-year-to-30 year maximum sought by prosecutors, but far higher than the one-year-to-three-year minimum sought by the defense. John Coffee, a securities law expert at Columbia University Law School, said the two would have fared worse in federal court.

“They will serve far less time,” Coffee said, “but it will probably be more painful time. There is no Club Fed in the New York State Correctional system.”

Under New York law, Kozlowski, who is Tyco’s former CEO, and Swartz, the company’s former CFO, must serve a minimum of six years and 11 months before release, said Linda Foglia, a spokeswoman for the state Department of Correctional Services.

The sentencing capped a case etched in the national consciousness by Kozlowski’s $6,000 shower curtain and $2 million birthday bash for his wife.

In a final legal twist, Assistant District Attorney Owen Heimer said that the Securities and Exchange Commission’s staff is recommending an accounting fraud case against Tyco for actions taken under Kozlowski and Swartz.

Tyco spokesman David Polk said the firm recently took a $50 million charge to cover a potential SEC settlement.