There’s an old Italian proverb that goes “big mouthfuls often choke.” Isn’t it the truth!?
The man who became more famous for having a $6,000 gold shower curtain than he did for his company leadership is going to have to get used to a concrete shower stall in the weeks ahead…
L. Dennis Kozlowski, former Tyco CEO who robbed the company of millions and millions of dollars, was sentenced on Monday to 25 years of prison.
This story really has been the quintessential example of corporate greed — an already wealthy, highly paid executive pilfers his own company to fund his over-the-top lavish lifestyle…
Assistant district attorney, Owen Heimer explained to the courtroom that “[Kozlowski] engaged in a shocking spree of self- indulgence with Tyco’s assets… He stole. He committed fraud. He committed perjury.” Strong words, but altogether true.
Kozlowski, along with former Tyco Finance Chief Mark Swartz (who received the same sentence on Monday), basically gave himself about $150 million in bonuses and forgivable loans and lied about Tyco’s finances to manipulate the company’s stock and pad his own pockets.
The money he collected wasn’t really kept a very big secret either — he spent it frivolously and ridiculously on items like an $18 million apartment in Manhattan, the above-mentioned gold shower curtain, a $2 million birthday party for his ex-wife, and $20 million of furnishings for his luxury home.
Stephen Kaufman, Kozlowski’s lawyer, tried to appeal to the judge by saying “he’s a good man… he’s a decent person… [he’s a man of] remarkable decency.” Clearly, his line of thinking didn’t work — what sane judge could agree that a man of “remarkable decency” would be behind almost $600 million of “misused” funds?
In June, Kozlowski and Swartz were found guilty of a whopping 22 counts of securities fraud, conspiracy, falsifying business records, and grand larceny, and, thankfully, the sentence isn’t light.
Both men now face up to 25 years in the New York prison system, although they will both be eligible for parole in a little over eight years. At that time, Kozlowski will be 66 and Swartz will be 52.
Monday’s sentencing hearing was a great landmark, in my opinion, in the corporate landscape of North America. Closely reminiscent of the recent trial and sentencing of Bernard Ebbers, WorldCom Inc. Chairman, the Kozlowski verdict and sentencing really drives home the message that corporate fraud is in no way acceptable. After decades of executives helping themselves to bonuses and unlimited luxuries on the company’s tab, it’s about time that the people taking these big mouthfuls start to choke.