Mistrial declared in Tyco corruption case - East Valley Tribune: Business

Mistrial declared in Tyco corruption case

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Posted: Friday, April 2, 2004 10:45 am | Updated: 4:30 pm, Thu Oct 6, 2011.

NEW YORK - A judge declared a mistrial Friday in the trial of two former Tyco International executives accused of looting the company of $600 million, citing intense outside pressure placed on one of the jurors.

A source, speaking to The Associated Press on condition of anonymity, said that Juror No. 4 - a woman who had nearly brought the case to a mistrial last week - had received a threatening or coercive letter within the past 24 hours.

The mistrial declaration by state Supreme Court Justice Michael Obus came after nearly six months of testimony and 11 days of deliberations in the case against former chief executive L. Dennis Kozlowski and former chief financial officer Mark Swartz.

"It is certainly a shame that this has to be done at this time," the judge told the jurors.

A gasp rippled across the courtroom when the mistrial was announced. Several jurors looked chagrined. Kozlowski, 57, and Swartz, 43, appeared ashen-faced.

Kozlowski told the AP, "I'm relieved now." He walked out of the courthouse with his wife and left in a black sport utility vehicle.

The jury left the courthouse on a bus without comment.

The mistrial raises the possibility of another trial for the two men, who could get up to 30 years in prison. Kozlowski's lawyer, Stephen Kaufman, said all sides would return to court May 7 to set a possible date for a second trial.

"We're disappointed because of the events that occurred outside the courtroom that this case did not reach a verdict," said Kaufman, who declined to answer any questions.

Juror No. 4 became the subject of intense media scrutiny last week after some news organizations reported she made an "OK" gesture toward the defense as she passed by the lawyers. The Wall Street Journal and the New York Post used the juror's name, the Post also ran a front-page sketch of her and called her "Ms. Trial" and "the batty blueblood."

Defense lawyers repeatedly asked for a mistrial, saying the juror - an apparent holdout for acquittal - was being pressured by the media and possibly by other jurors to change her vote.

A week ago, the jurors sent out notes that said they were at each other's throats and that one juror was refusing to deliberate with an open mind.

"There has been no finding that this juror has done anything wrong," Obus said in declaring the mistrial on Friday. "A great disservice may have been done to her and her family."

The Post and Journal broke with normal journalistic conventions in naming the juror while the trial was under way. Col Allan, the editor of the New York Post, said the newspaper did so because of a gesture in the courtroom interpreted by some to be an OK sign to defendants, which he said "created public interest in her identity." The Journal gave a similar reason for its decision. Other journalists, including an AP reporter, who were in the courtroom did not interpret the gesture as any kind of signal.

The trial came amid a spate of major cases involving corporate corruption. During the trial, federal prosecutors brought criminal charges against former executives of WorldCom and Enron, and homemaking maven Martha Stewart was convicted in a stock scandal just blocks away.

The case exposed a culture of greed at the very top at Tyco, a conglomerate that makes everything from coat hangers to undersea fiber-optic cable.

Prosecutors said Tyco picked up all or part of the tab for a long list of extravagances, among them: a $2 million toga-party birthday party for Kozlowski's wife on a Mediterranean island, and $15 million worth of furnishings that included a $15,000 umbrella holder, a $2,200 gilt metal trash basket and a $6,000 shower curtain.

The government accused Kozlowski and Swartz of stealing $170 million by hiding unauthorized bonuses and secretly forgiving loans to themselves. They also were accused of stealing an additional $430 million by pumping up Tyco stock by lying about the company's finances.

The former executives were charged with 32 counts of grand larceny, falsifying business records and violating state business laws.

The defense argued that the two had earned every dime and that the board of directors and auditors knew about the compensation and never objected.

The case at times seemed more like an episode of "Lifestyles of the Rich and Famous" than a criminal trial.

The jury was given a videotaped tour of an $18 million, Tyco-owned apartment on Fifth Avenue where Kozlowski lived while in the city. The flat included paintings by Monet and Renoir.

The jurors were also shown an edited videotape of the party that Kozlowski threw for his wife Karen's 40th birthday on the Italian island of Sardinia. It featured a performance by singer Jimmy Buffett and scantily clad young men and women dancing and serving, with men dressed as Roman soldiers and women as Roman maidens.

The edited tape did not show R-rated scenes of an anatomically correct ice sculpture of Michelangelo's David squirting vodka into glasses, or the cake in the shape of a nude with a sparkler atop each of her breasts.

Kozlowski still faces charges from 2002, when he was accused of evading more than $1 million in New York state sales tax on $13 million worth of art hanging on the walls of the Fifth Avenue apartment.

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