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NEW YORK — In opening statements Wednesday in the retrial of former Tyco International Ltd. executives L. Dennis Kozlowski and Mark Swartz, a prosecutor said the men’s actions constituted “stealing, pure and simple.” Assistant District Attorney Owen Heimer told the jury the executives stole $150 million from the company in the form of bogus, unauthorized bonuses. He reminded them again and again that the theft was not just from the company, but from its owners, the shareholders. “Unknown to Tyco’s owners and shareholders, they were systematically looting [the] corporation, a corporation they were pretending to serve,” Heimer said. The Manhattan district attorney’s office first charged Kozlowski, Tyco’s former chairman and chief executive, and Swartz, the former chief financial officer, in September 2002. Both are facing more than 30 felony counts, including grand larceny, securities fraud and falsifying business records. The top count of grand larceny carries a prison term of up to 25 years. The executives’ first trial began in October 2003 and ended in a mistrial six months later after one of the jurors, identified by newspapers as a holdout for acquittal, was contacted about the case by an outside party. Since the mistrial, the district attorney’s office suffered a defeat in its attempt to prosecute on similar charges former Tyco General Counsel Mark Belnick. He was acquitted in July. Manhattan Supreme Court Justice Michael Obus was the judge in both previous trials and is presiding over the retrial. Some of the ex-jurors in the earlier trial have criticized the prosecution for failing to engage jurors and putting too much emphasis on the more sensational elements of the case, such as Kozlowski’s $6,000 shower curtain bought with company funds. On Wednesday, Heimer avoided such specific references to the executives’ ostentatious spending, though he did single out their purchases of multimillion-dollar Manhattan apartments as instances in which the two used company money for personal benefit. The prosecutor acknowledged to the jury early on that Kozlowski and Swartz were lavishly paid by the Tyco board even without the alleged thefts. From 1999 to 2001, he said, the board approved compensation of $270 million to Kozlowski and $127 million to Swartz. The defendants stole another $150 million, said Heimer, because even such astronomical amounts were “just not enough” for them. The prosecutor was clearly hoping to pre-empt defense arguments that all payments to Kozlowski and Swartz were approved by the company’s directors and were in keeping with an existing “pay for performance” corporate culture. Heimer also asked jurors not to be distracted by the huge sums of money the executives handled on a day-to-day basis. “The corporate assets these two men made decisions about were not their assets,” he said. “They were the shareholders’ assets.” Heimer’s constant reference to the shareholders irked the defense team. After the prosecutor finished his opening statement and out of the presence of the jury, Austin Campriello, one of Kozlowski’s lawyers, complained to the judge about Heimer’s statements that the defendants had stolen from the shareholders rather than the company. Campriello also asked for a mistrial on the grounds that Heimer had said in his opening statement that the defendants committed fraud by not disclosing “thefts” on the company’s proxy statements. The lawyer said Heimer had misstated to the jury Kozlowski’s obligations with regard to the proxy statement as well as his rights under the Fifth Amendment. Justice Obus denied the mistrial motion but said he would consider instructions to the jury on other issues raised by defense. Stephen Kaufman, the chief lawyer for Kozlowski, and Charles Stillman, the chief lawyer for Swartz, are expected to give their opening statements today. On Wednesday the prosecution told the judge they were concerned that the defense lawyers would try to elicit sympathy for their clients by dwelling on details of the men’s personal lives. Anthony Lin is a reporter with the New York Law Journal, a Recorder affiliate.

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