Tyco Scandal (2002)

By: John Cacaccio

Company

The company was based in New Jersey and was a security systems company. This Company provides advanced security systems to their customers for their safety. The company's CEO was Dennis Kozlowski
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Main Players

The main players in this scandal was the company's CEO's. The former CEO, Mark Swartz and other CEO Dennis Kozlowski were involved in this scandal.

Both the CEO and CFO stole $150 million and inflated the company income by $500 million dollars

Penalties

Dennis Kozlowski and Mark Swartz were sentenced to prison for 8-25 years. Also a class-action lawsuit forced Tyco to pay $2.92 Billion to investors.

How they did it

The company siphoned money through unapproved loans and fraudulent stock sales. Money was then smuggled out of the company disguised as executive bonuses/benefits.

how they got caught

Undercover investigators came across questionable accounting practices, including large loans made by Dennis Kozlowski that were not forgiven.

Fun Facts

  • At the height of the scandal, Dennis kozlowski threw a $2 million dollar birthday party for his wife on an island, complete with a Jimmy Buffet performance.
  • Kozloski also made the company pay for personal items like apartments, airplane tickets, and much more.
  • Mark Swartz's bail was $50 million dollars