Taking Down the Lion by Catherine S. Neal

Author:Catherine S. Neal
Language: eng
Format: epub
Publisher: Palgrave Macmillan
Published: 2013-11-13T05:00:00+00:00

The Charges

By the time the trial began, many of the charges alleged in the September 12, 2002 indictment had been dismissed because there wasn’t enough evidence to support them. What remained were fourteen counts of grand larceny in the first degree, sixteen counts of falsifying business records, a charge of conspiracy to commit larceny and possession of stolen property, and one count of securities fraud.16

“Lying, Cheating and Stealing”

After days of jury selection were completed, the prosecution gave its opening statement on October 7, 2003. Assistant District Attorney (ADA) Chalifoux addressed the twelve newly seated jurors and laid out the prosecution’s “lying, cheating and stealing”–themed case. ADA Chalifoux began by saying:

This case is about lying, cheating and stealing. It’s about two employees who were entrusted with the money and the assets of a company. And they abused that trust. They were entrusted with the assets that belonged to other people, to the shareholders and the owners of Tyco. It’s about these two defendants, defendant Kozlowski and defendant Swartz, who shamelessly violated that trust by treating the company’s bank accounts as if they were their own. They raided the company’s assets, the assets again that belonged to the shareholders. And they used them on themselves. They used them on other employees. And they used them for things such as gifts to themselves, money that they took and gifts to other people. You will find that the defendants used the money of Tyco not for their own—not for Tyco’s benefit, but for their own benefit and the detriment of Tyco. That’s the stealing.

Defendants had an obligation to tell the owners of the company what they were doing with those assets. They had an obligation to tell the board of directors and its committee and the public as well. They had an obligation to tell them that they were using it for themselves. But instead of revealing that information, defendants lied. They lied to the people whose interests they were hired to protect. They created false company documents. And they used those documents to help themselves commit and conceal their crimes. That’s the lying.

By stealing from the company and lying about it, they manipulated the price of the company’s stock. They falsely represented that they were careful in the management of Tyco funds, when in fact they were spending millions of dollars on themselves for things like apartments, and yachts and art work. The lies and false impressions that they created kept the stock price higher than it would have been had investors known the truth. Defendants then sold shares of Tyco stock, hundreds of thousands of shares of stock at that inflated price. And they took the money for themselves. And they misrepresented the risks that the shareholders faced. By doing that, they lined their pockets with millions of dollars in proceeds from fraudulent stock sales. That’s the cheating.

This is a calculated scheme that lasted for years. It was designed by the defendants to steal money and to cover it up. And it was very successful.

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