Tyco judge says jury needs to find `larcenous intent'

Panel's inquiry said to go `to the heart of the case'

March 20, 2004|By BLOOMBERG NEWS

NEW YORK - Jurors weighing fraud and larceny charges against the former chief executive of Tyco International Ltd. need to find he "acted with larcenous intent" to convict him, the judge in the case said yesterday.

New York state Supreme Court Justice Michael J. Obus told jurors they must acquit L. Dennis Kozlowski of larceny if they conclude he "believed he was authorized" to take $170 million in bonuses and loans that he and co-defendant Mark H. Swartz are accused of stealing.

Obus was responding to a jury query about the meaning of "criminal intent," an issue that "goes to the heart of the case," Kozlowski lawyer Stephen Kaufman said. The defense says the bonuses were authorized by Tyco's board and recorded in its books, proof the two men had no intent to steal. The judge's instruction was a blow to prosecutors, who argued that the defendants' state of mind shouldn't be given particular emphasis.

"That is the law, and I know you're not crazy about the law, but we just work here," Obus told Assistant District Attorney Ann Donnelly today.

The jury ended its second day of deliberations without reaching a verdict and was sent home for the weekend at 5 p.m. yesterday.

Kozlowski and Swartz, Tyco's former finance chief, have been on trial in New York since late September. Prosecutors say the two men lived the high life on money stolen from Tyco. The verdict may hinge on whether jurors are convinced the defendants had board approval for the bonuses and loans they took. Six former Tyco directors who testified during the trial said they didn't approve the bonuses.

The two former executives are also accused of making $430 million by selling Tyco stock whose value they inflated by misleading investors about the company's financial condition. They would face up to 30 years in prison if convicted.

Earlier in the trial, Obus dismissed the most serious charge against them, enterprise corruption.

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