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A Manhattan Supreme Court judge on Tuesday upheld the top count of grand larceny against former Tyco International Ltd. general counsel Mark Belnick and also denied the defendant’s motion to dismiss six counts of falsifying business records. Justice Michael Obus made his ruling orally, adding that he was not prepared to file a written decision at this time. He did not rule on Belnick’s motion to dismiss a charge that he violated the Martin Act, New York’s securities fraud statute, as well as an additional count of falsifying business records. Instead, the judge asked prosecutors from the Manhattan district attorney’s office to present more evidence showing that Belnick acted in concert with former Tyco Chief Executive Officer L. Dennis Kozlowski and Chief Financial Officer Mark Swartz, who are facing enterprise corruption and conspiracy charges in addition to grand larceny, falsifying business records and violating the Martin Act. The district attorney’s office first charged Belnick last September, at the same time as Kozlowski and Swartz, alleging that the lawyer falsified business records to conceal $14 million in unauthorized loans to himself. District Attorney Robert Morgenthau added the grand larceny charge in February, as well as a charge that Belnick violated the Martin Act by participating in a scheme with Kozlowski and Swartz to defraud investors by concealing loans and other self-dealing. Prosecutors allege Belnick himself stole around $50 million from the company. Kozlowski and Swartz are charged with stealing more than $600 million. The grand larceny charge is punishable by up to 25 years in prison. The other charges, including the Martin Act violation, are all punishable by up to four years in prison. Belnick’s lawyer, Reid Weingarten of Washington, D.C.’s Steptoe & Johnson, had argued that the charges against his client should be dismissed because the loans and other payments that Belnick received were routine at Tyco. Moreover, Weingarten had argued, the preparation of documents for disclosure to the Securities and Exchange Commission was the responsibility of Tyco’s financial department, not its legal department. Weingarten characterized a $12 million “special bonus” paid to Belnick as a performance incentive arising “in the ordinary course of business.” The prosecution, led by Assistant District Attorney John Moscow, had argued that the ordinary course of business according to Kozlowski, Swartz and Belnick was not the same as the proper course of business for the company and its shareholders. Moscow also said a lawyer of Belnick’s experience should have exercised his own judgment instead of passing the buck to Swartz. Before joining Tyco in 1998, Belnick was a senior partner at Paul, Weiss, Rifkind, Wharton & Garrison. The district attorney’s office declined Tuesday to comment on Justice Obus’ rulings. Weingarten did not return a call seeking comment.

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