NEW YORK -- L. Dennis Kozlowski, convicted of looting Tyco International Ltd. as its chairman, failed to pay $167 million he owes in fines and restitution by a Sept. 19 deadline, a New York State Supreme Court justice said yesterday.
Judge Michael Obus said Kozlowski wasn't able to sell enough assets - including three houses in Nantucket, Mass., and a Colorado mansion - to pay the amount. Prosecutors said Aug. 16 that Kozlowski, 59, had paid $108 million, leaving him $59 million short.
"More time is needed," Obus said after conferring with attorneys. He ordered the lawyers back into court June 1, without saying what additional punishment might be imposed if Kozlowski doesn't pay the balance.
Kozlowski is serving 8 1/3 to 25 years in a New York state prison. Obus had ordered payments of $97 million in restitution and a $70 million fine within a year of Kozlowski's Sept. 19, 2005, sentencing. The money is being paid from court-approved sales of frozen assets.
The United States is experiencing the sharpest slowdown in the growth of home prices in 30 years. A real estate broker in Nantucket said yesterday that prices there have remained stable at the top of the market. Kozlowski's oceanfront home was listed at $23 million yesterday, his cottage above the harbor on pilings is listed for $4.5 million and another cottage is valued at $3 million. "When you get up in the stratospheric numbers, those generally take a while to sell," Clarence Doucette of Maury People/Sotheby's International Realty, said of the 7,000-square-foot oceanfront home. "It's never easy to sell property of this size."
Kozlowski also owns an eight-bedroom mountaintop mansion in Beaver Creek, Colo., that formerly listed for $11.5 million, but is now down to $9.9 million, Coldwell Banker broker Tony Petruccione said.
Kozlowski recently found a buyer for his historic yacht, the Endeavour, at $13.1 million, according to court papers.
A former prosecutor voiced doubt that Kozlowski is trying as hard as he might to raise the money. "Motivation is everything," said John Moscow, who led the Kozlowski investigation by the Manhattan district attorney's office and now is in private practice. "If Kozlowski had to close an important deal from which he stood to benefit, I'm sure he could have done it."
A New York court froze the assets after prosecutors asked for a hold on as much as $600 million worth of goods and property owned by Kozlowski and Mark Swartz, former Tyco finance chief, when the two were indicted on charges of looting the company.
Swartz, 46, made his full payments of $37 million in restitution and a $35 million fine, his attorney, James Mitchell, said in an interview after yesterday's hearing. Swartz also is in prison for 8 1/3 to 25 years.
Kozlowski and Swartz were convicted of grand larceny and securities fraud for stealing $137 million in unauthorized compensation and gaining $410 million through illicit stock sales.
Kozlowski also owes money in the New York tax case that ultimately led to his Tyco convictions. He didn't pay sales taxes on about $14 million worth of artwork he bought, the state said.
Kozlowski also owes $21.2 million in sales and income taxes for 1995 through 2002.