He'll be in there for a while. That's a big punishment for a white-collar crime.
NEW YORK (CNN/Money) - Ex-Tyco CEO Dennis Kozlowski was sentenced to 8-1/3 to 25 years in prison Monday for his part in stealing hundreds of millions of dollars from the manufacturing conglomerate.
Former Tyco CFO Mark Swartz received the same sentence. Kozlowski and Swartz were ordered to pay back $134 million to Tyco while Kozlowski must pay a criminal fine of $70 million and Swartz must pay an extra $35 million -- bringing total fines and restitution to $239 million.
The former Tyco executives were ordered to start serving their sentences immediately and led from the courtroom in handcuffs.
In a crowded New York state courtroom, the prosecution had asked for the maximum penalty of 15 to 30 years for both men, while Kozlowski's defense had focused on his character as a "family man."
As the first high-profile corporate fraud case tried in a state court, legal experts had been watching the sentence to see whether state judges would follow the lead of judges in federal courts, who have been imposed severe sentences on corporate executives found guilty of white collar crimes.
Bernie Ebbers got 25 years for his role in the collapse of WorldCom. Adelphia founder and ex-CEO John Rigas also received a hefty sentence of 15 years. Both were tried in federal court.
"Now anyone who wants to know what trial court judges in New York state are doing when confronted with conviction in a high-profile corporate fraud case, the answer is imposing a significant sentence," former prosecutor Jacob Frenkel said. "Even on the short end of the range, it is a substantial sentence."
In June, Kozlowski and Swartz were found guilty on 22 of 23 counts of grand larceny and conspiracy, falsifying business records and violating business law.
The trial of the two men exposed improper use of company funds, including lavish spending on a birthday party for Kozlowski's wife.
According to New York State Department of Correctional Services procedures, the pair will spend time at an interim facility, where they will undergo a series of tests and reviews, before a prison is designated for them.
Since they received a sentence of more than six years, they likely will be sent to one of New York's maximum security prisons, which include Attica and Sing Sing.
State prisons tend to house more violent criminals, such as those prosecuted for rape and homicide. White-collar criminals sentenced to federal prison often go to minimum-security facilities derisively dubbed "Club Fed."
Hahaha, my dad knew that guy sorta, he owned a boat (cant remember the name) but anyway, i was up in maine on my families boat in pretty remote spot in the islands and this tyco dude had taken his boat and was basically hiding out there evading arrest.
Your Ride: 1991 318is (e30 m42), 2007 Mazdaspeed 3
As a business student I am happy to see them come down hard on this guy, hopefully it will send a good message that you can get in a lot of trouble for that kind of crap. Damn guys trying to make even more cash.
Well that kind of greed from CEO's needs to end in any case.
It does need to end but I personally don't think the threat of prison will be enough. The real owners of the companies (the ones with the mutual funds) need to step up. They need to take back control of their companies. Even when boards do vote against ridiculous rules with loopholes that prevent CEO's from getting fired even if they were caught driving drunk and committing reckless homocide if they say they were actin gin the best interest of the company and didn't know it was illegal, the management isn't required to accept the rulings and routinely avoid them. Oh, and check this out: Tyco's bonus cap (the last I heard) was set at 200% of base salary. It used to be 600%-700%. Ok, sorry, rant over.