L. Dennis Kozlowski, the Tyco International Ltd. (TYC:US) chief executive officer convicted in 2005 of looting his company, said he rejected a plea deal that would have earned him two to six years in prison.
Kozlowski told the New York state Parole Board during an April 4 hearing that he declined the offer from the Manhattan district attorney’s office because he had “rationalized” that he wasn’t guilty, according to a transcript released today. Kozlowski told the panel he is no longer maintaining his innocence in the case.
“Back when I was running Tyco, I was living in a CEO-type bubble,” Kozlowski told the board, according to the transcript released by the state Department of Corrections and Community Supervision. “I had a strong sense of entitlement at that time, and I had a sense of greed, and in doing so I stole money from Tyco, and I stole a lot of money.”
Kozlowski, 65, was convicted in June 2005 of securities fraud, grand larceny and falsifying business records and received a sentence of 8 1/3 to 25 years in prison. The parole board last week denied the 65-year-old Kozlowski’s request for parole “due to concern for the public safety and welfare.”
The jury, in New York State Supreme Court in Manhattan, found that Kozlowski and ex-Chief Financial Officer Marc Swartz stole about $137 million from Tyco in unauthorized compensation and made $410 million from the sale of inflated stock. An earlier trial resulted in a mistrial after a juror reported receiving threats.
Jurors at both trials saw a tape of a $2 million birthday party Kozlowski threw on the Italian island of Sardinia in June 2001, financed in part by Tyco. It featured an ice sculpture of Michelangelo’s “David,” with vodka flowing from its penis, and a concert by singer Jimmy Buffett.
Kozlowski, a 1968 graduate of Seton Hall University in New Jersey, who started with Tyco as an assistant comptroller in 1976, told the board he has paid $134 million in restitution and a $70 million fine in full. He said he sold his assets, including homes and a boat, “as quickly as possible” and has “very, very little left.”
“I stole from the company,” Kozlowski said. “I misplaced the trust of people that counted on me, people who worked at Tyco, people who were invested in Tyco, my friends, my family, and I can’t begin to describe how deeply sorry I am for that behavior, and I have come to recognize that a number of years ago while I was in jail.”
Kozlowski was transferred in January to the Lincoln Correctional Facility, a minimum-security facility on Manhattan’s 110th Street near Fifth Avenue, from the medium- security Mid-State Correctional Facility in Marcy, New York, his lawyers said last month.
Kozlowski said he helped prisoners at Mid-State earn their general equivalency diplomas and worked as a laundry porter, according to the transcript. He also said he completed an alcohol and substance abuse treatment program during the past six months that earned him a “merit certificate” that allowed him to appear before the board.
Kozlowski said he now works as a clerk at a company that helps former offenders, veterans and others prepare for job interviews. He said he leaves the Lincoln facility each weekday morning and returns each evening. He is allowed to spend Friday and Saturday nights outside the prison, he told the board.
Kozlowski, who became the face of corporate greed with a $6,000 shower curtain and paintings by Monet and Renoir in his Fifth Avenue apartment paid for with shareholders’ money, ended the hearing by asking the panel to grant him parole, a request that was denied the next day.
“I am fully responsible for stealing money from Tyco,” Kozlowski said. “I’m extremely sorry about it, and as you consider parole for me here today, I am asking you for your mercy. I am not too proud to beg you for your mercy here today. I’m extremely sorry for what I have done.”
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