The Traitorous Tyco Scandal: Sentencing of L. Dennis Kozlowski and Mark Swartz
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The Traitorous Tyco Scandal:
Sentencing of L. Dennis Kozlowski and Mark Swartz Business Law 447-A
White collar crime is not a victimless crime, and affects many people. These crimes can devastate a company, force investors to lose billions of dollars, and destroy people’s life savings. Through L. Dennis Kozlowski’s and Mark Swartz’s scandal reported in 2002, the Tyco Company lost over $28 billion dollars in debt. However, the biggest lash came to its shareholders who lost over $90 billion. The Tyco two were tried and found guilty in 2005, and are currently serving a 25- year- sentence. Crime never pays and it is only a matter of time before one is caught. The damage done affects all people involved…show more content… The article states that, “Kozlowski expended $2 million dollars on a birthday party for his wife, as well as a $6,000 shower curtain.” (Crawford, P.2). Mr. Kozlowski’s also purchased expensive one of a kind artwork pieces that came from transferred funds out of a “stock loan plan” that was intended to help executives’ pay taxes on stock awards. He also stole from the employee relocation program designed to help workers afford the adjustment from relocating within the business. Yet, in Kozlowski’s and Swartz’s minds, they feel these extravagances were acceptable. They stated that the company was aware of these expenses, and gave the money to them for their wages. A chairman for the board stated that “the wording of the stock plan could be interpreted to allow the funds to be used for other purposes” (Cohen, et al). As a result of this vagueness in policy, Mr. Kozlowski used the funds like his own personal credit card.
Kozlowski left a huge paper trail leading up to his demise. Either he started to get careless with his spending and embezzled artwork, or he was too smug to care. Tax fraud charges were the first to come into light. Shipping documents indicating that one of a kind expensive artwork was sent to Tyco headquarters in New Hampshire, when no one on the board even knew about or approved this spending, is what alerted the authorities. Kozlowski had empty crates of the art pieces sent to there to