Feb. 7 (Bloomberg) -- L. Dennis Kozlowski, the former Tyco International Ltd. chief executive officer convicted of looting the company, won the reversal of a decision denying him parole and got a chance to have the matter reconsidered.
Kozlowski was sentenced to 8 1/3 to 25 years in prison in 2005 after a jury trial in Manhattan. He began serving his sentence in September of that year. The New York state Board of Parole denied the 66-year-old Kozlowski’s request for parole in April “due to concern for the public safety and welfare.”
State Supreme Court Justice Carole Huff, in a ruling dated Feb. 5, annulled the decision and sent it back to the board for a new hearing, saying it appeared that the panel “relied exclusively on the seriousness of petitioner’s crime in reaching its determination.”
“It may be that factors present in petitioner’s crimes do exist to support the board’s finding, but those factors have not been identified,” Huff said in her ruling. “Nor have any ‘factors and reasons’ been given ‘in detail’ as to why petitioner’s release would undermine public safety and welfare.”
Carole Weaver, a spokeswoman for the New York State Department of Corrections and Community Supervision, declined to comment on the ruling, saying in a telephone interview that the department hasn’t yet received the decision.
Alan Lewis, an attorney with Carter Ledyard & Milburn LLP representing Kozlowski, said he is “enormously gratified” by the ruling.
“It is unlikely that there is a more deserving candidate for parole in New York than Dennis Kozlowski,” Lewis said in a statement.
Kozlowski sued the board in October, asking Huff to annul the decision and grant his application for parole or give him a new hearing, saying that the board relied on erroneous information in making its ruling.
Kozlowski was transferred in January 2012 to the minimum-security Lincoln Correctional Facility on 110th Street near Fifth Avenue in Manhattan from the medium-security Mid-State Correctional Facility in Marcy, according to state records.
Kozlowski participates in a release program where he works as a clerk at a software company, Lewis said. Since June, he has spent five days a week on furlough in the community and two nights inside the facility, said Linda Foglia, a spokeswoman for the state corrections department.
The next parole board interviews for Lincoln inmates are scheduled for the week of March 4, Foglia said.
Kozlowski became the face of corporate greed when the government pointed to luxuries paid for with Tyco funds including a $30 million Fifth Avenue apartment with a $6,000 shower curtain, a $15,000 umbrella stand and paintings by Monet and Renoir.
A jury in New York State Supreme Court in Manhattan found that Kozlowski and ex-Chief Financial Officer Mark Swartz stole about $137 million from Tyco in unauthorized compensation and made $410 million from the sale of inflated stock.
Jurors saw a recording of a $2 million birthday party Kozlowski threw on the Italian island of Sardinia in June 2001, financed in part by Tyco. The party featured an ice replica of Michelangelo’s “David,” with vodka flowing from its penis, and a concert by singer Jimmy Buffett.
Kozlowski, a 1968 graduate of Seton Hall University in New Jersey, who started with Tyco as an assistant comptroller in 1976, told the parole board he has paid $134 million in restitution and a $70 million fine in full. He said he sold his assets, including homes and a boat, “as quickly as possible” and has “very, very little left.”
Kozlowski has “conducted himself as a model” inmate since his incarceration, has never committed a disciplinary infraction and has completed every program offered to him, including an alcohol and substance abuse treatment program, he said in his lawsuit.
He served as a teacher’s aide for inmates pursuing high-school equivalency diplomas and was awarded “merit time” that reduced his minimum term, making him eligible for parole after serving seven years, according to the suit.
While the parole board said Kozlowski’s disciplinary record “appears clean” and he has made “progress and achievement,” it denied his request.
“Your instant offenses are the result of your theft of over $100 million from Tyco, an international public corporation, in glaring violation of the trust placed in you as CEO by the board of directors and corporate shareholders,” the board said in its decision.
Kozlowski in August settled a 10-year-old lawsuit with Tyco in which the company sought the return of money, stock and loans. Tyco, based in Schaffhausen, Switzerland, makes security systems.
Swartz, 52, who is also serving an 8 1/3 to 25 year sentence, sued Tyco in May to recover $60 million he says he is owed under agreements he made with the company when he stepped down in 2002.
Swartz is also serving his sentence at Lincoln and participating in a work-release program, according to the website of the Department of Corrections and Community Supervision. He is eligible for parole in January and has a hearing scheduled for September.
The case is Kozlowski v. New York State Board of Parole, 104097/2012, New York State Supreme Court, New York County (Manhattan).
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