Judge Throws Out Most Serious Count in Tyco's Kozlowski Case

The most serious charge of enterprise corruption was tossed out Friday by the State Supreme Court justice overseeing the now five-month long trial of former Tyco Chief Executive Dennis Kozlowski, 57, and former Chief Financial Officer Mark Swartz, 43.

The two remain on trial for alleged grand larceny, falsifying business records and violating state business laws, the Associated Press reported. They face additional charges of stealing $170 million from Tyco by hiding unapproved pay and bonuses and by abusing employee loan programs as well as stealing an additional $430 million from the company by lying about the company’s finances from 1995 to 2002 and profiting from the resulting jump in stock value.

Tyco, which has about 270,000 employees and $36 billion in annual revenue, makes electronics and medical supplies and owns the ADT home-security business, the AP reported.

The two defendants face the same penalty they would have faced on the enterprise corruption count—25 years in prison. The enterprise corruption count is similar to the RICO statutes used to prosecute organized crime figures, the AP reported.

Justice Michael Obus said, "The court does have serious reservations about the applicability of the enterprise-corruption count," adding it did not meet statutory requirements.

The jury in the case was given a week-long break and is due back this week to hear closing arguments in the case that has included colorful testimony about he lavish lifestyle of Kozlowski, including footage from an extravagant 40th birthday party he threw for his wife and 75 friends on a Mediterranean island.

Defense lawyers sought dismissal of all counts facing their clients and made a variety of arguments before Obus out of the jury’s presence. The judge rejected most of the arguments but did dismiss the enterprise-corruption count.

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