Tyco Scandal (2002)
By: John Cacaccio
Both the CEO and CFO stole $150 million and inflated the company income by $500 million dollars
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.
- 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