NEW YORK -- Former Tyco International Ltd. chief executive L. Dennis Kozlowski and former finance chief Mark Swartz must remain in prison while appealing their convictions for looting the company.
Kozlowski, 58, and Swartz, 45, have been in custody since Sept. 19, when they were sentenced to 8 1/3 to 25 years for stealing more than $150 million from Tyco and defrauding its shareholders.
Judge Angela Mazzarelli of a New York appeals court issued a one-page order yesterday rejecting Kozlowski's and Swartz's requests for bail pending the outcome of their appeals, a process that could take as long as six months.
"I'm just terribly disappointed in the decision to deprive Mark Swartz of his freedom while he pursues his appeal," Swartz's lawyer Charles Stillman said after the ruling. A lawyer for Kozlowski didn't immediately return a call seeking comment.
A New York state jury convicted Kozlowski and Swartz in June of 22 counts each of grand larceny, securities fraud, conspiracy and falsifying business records. They were accused of awarding themselves and others unauthorized bonuses and spending company money on homes, jewelry and personal investments.
The two men face at least six years and 11 months in state prison for their crimes under New York state sentencing law. Justice Michael Obus, who presided over their trial, also ordered them to pay almost $240 million in restitution and fines.
Other executives convicted of white-collar crimes in recent months are free pending their appeals, including former WorldCom Inc. chief executive Bernard J. Ebbers, 64, and John J. Rigas, the 80-year-old founder of Adelphia Communications Corp. Both were convicted in federal courts of leading frauds that drove their companies into bankruptcy. Ebbers faces a 25-year prison term. Rigas was sentenced to 15 years.
Kozlowski and Swartz are in the Downstate Correctional Facility in Fishkill, N.Y., undergoing evaluations and awaiting assignment to a state prison.
The two men, who were indicted in September 2002, were tried twice. The first case ended in a mistrial in April 2004. They were free on bail throughout both trials. Kozlowski's former wife put up $10 million to secure his $100 million bail. Swartz was free on $50 million bail secured by $5 million in collateral.
Kozlowski left the company in June 2002, the day before he was indicted for sales-tax evasion. He has yet to be tried on those charges. Swartz left the company in September 2002.
Bermuda-based Tyco, which operates out of West Windsor, N.J., is the world's biggest maker of electronic connectors, industrial valves and security systems.