Tyco Scandal

By: Brett Santangelo

What the company does

  • They create security system, and also fire protection.
  • Tyco headquarters is located in Cork, Republic of Ireland.

What Happened...

CEO and CFO stole $150 Million and inflated company income by $500 Million.

Main Players

  • CEO- Dennis Kozlowski
  • CFO- Mark Swartz

How they got caught

SEC, and Manhattan D.A. investigations uncovered questionable accounting practices, including large loans made by Kozlowski that were then given.

How they did it

The men siphoned money through unapproved loans and fraudulent stock sales. They also smuggled money out of the company disguised as executive bonuses or benefits.

What the penalties were

Kozlowski and Swartz were sentenced to 8-25 years in prison. Also a class -action lawsuit forced Tyco to pay $2.92 billion to investors.

Fun Facts

  • At the height of the scandal, Kozlowski threw a $2 million birthday party for his wife.
  • The current CEO is George Oliver.
  • Tyco was founded in 1960.