Tyco's ex-chief urged tough sentence for embezzler

[Dave Farber <dave () farber net>]

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From: Anthony Baker <lists () thinkbigideas com>
Organization: ThinkBigIdeas
Reply-To: lists () thinkbigideas com
Date: Wed, 01 Jan 2003 12:16:12 -0800
To: dave () farber net
Subject: [Item] Tyco's ex-chief urged tough sentence for embezzler


Dave,

Did you see this? It's an AP piece that I would hope will get
more play in the news. Don't condone embezzling, but it will
be interesting to see how the double standard plays out...

http://newsobserver.com/24hour/business/story/696802p-5158620c.html

Tyco's ex-chief urged tough sentence for embezzler


By THE ASSOCIATED PRESS

(AP) - In the same year he allegedly began stealing up to $600 million
from Tyco International Ltd., former chief executive Dennis Kozlowski
urged a judge to throw the book at an employee who had embezzled a
fraction of that amount from a subsidiary.
"I view Mr. Shah's crime as particularly egregious," Kozlowski wrote to
court officials in the 1995 case of Girish P. Shah, The Boston Globe
reported Tuesday. "Not only did he steal from the stockholders of this
Fortune 500 company, but he breached the fiduciary duty placed in him by
the company and his supervisor(s)." Shah, an assistant controller at
Tyco's Grinnell fire-protection division, had been charged in Houston
with stealing $988,000 from the company over eight years. According to
transcripts, Shah pleaded no contest in state court to overcharging
customers and siphoning money from funds that went unclaimed by
subcontractors.

Though Shah was ready to repay $728,000 immediately and borrow money
from relatives to repay most of the rest, Kozlowski urged a sentence of
30 years in prison.

"I urge you to impress upon Mr. Shah and those others who commit similar
crimes that wrongdoing of this nature against society is considered a
grave matter by the Texas Court and will not be condoned," Kozlowski
wrote seven years ago.

Shah, then 41, was sentenced to 20 years in prison and served 3 1/2
before being paroled in 1999.

Kozlowski and Tyco's then-chief financial officer, Mark Swartz, were
charged in September with stealing $170 million from the company, partly
by abusing bonus and loan programs, and reaping another $430 million
through improper securities sales in a series of self-dealings that
stretched back to 1995.

They have pleaded innocent to enterprise corruption and grand larceny,
each punishable by up to 25 years in prison.

Shah, who lives in Sugar Land, Texas, said he never saw Kozlowski's
letter.

Shah said he began embezzling after seeing his superiors take advantage
of unfair bonus plans and was not surprised to hear of the indictments
against his former bosses.

A report released Monday following a six month internal investigation
found "aggressive accounting" methods in use since 1999 to puff up
Tyco's profits. It also concluded that the organization lacked a
commitment to proper "ethics, integrity, accounting and corporate
governance."

Asked to comment on Shah's case, a Kozlowski spokesman not identified by
the Globe said: "There is an awfully big difference between someone
embezzling funds and of someone being accused - merely accused, not
convicted - of misuse of a loan program. Mr. Kozlowski stands by the
statement that he is innocent of these things."

Kozlowski's lawyer, Stephen Kaufman, did not return phone calls Tuesday.

Three years after his release, Shah said he has held a few temporary
jobs and done accounting work for his own clients.

"I'm basically surviving," he said.


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