Kozlowski Is Found Guilty

Updated from 3:07 p.m.

A New York state jury convicted ex-Tyco (TYC Quote) chief Dennis Kozlowski and former finance chief Mark Swartz of looting the conglomerate of hundreds of millions of dollars.

Both were convicted on multiple counts, including grand larceny, which carries a sentence of up to 25 years in jail. The guilty verdict came in the former executives' second trial, after last year's mistrial.

Kozlowski and Swartz were tried in state Supreme Court in Lower Manhattan on charges also including securities fraud, conspiracy and falsifying records. Both were convicted on 22 of 23 counts. Their lawyers promised to appeal.

The convictions are a victory for Manhattan District Attorney Robert Morgenthau, the longtime New York prosecutor, who is facing a tough primary challenge for the first time in many years. The earlier trial of Kozlowski and Swartz ended in a mistrial, largely because one juror refused to convict the defendants.

The convictions also come as anger about corporate corruption is beginning to wane, at least in some quarters.

In recent weeks, the Supreme Court overturned the obstruction of justice conviction of onetime accounting giant Arthur Andersen, in a case stemming from the collapse of Enron. Last week a New York jury, sitting in a courtroom right across the hall from the Tyco jury, acquitted former Bank of America broker Theodore Sihpol for alleged violations in the mutual fund trading scandal.

On the other hand, Kozlowski's conviction comes just three months after the government won another high-profile corporate corruption conviction, sending ex-WorldCom chief Bernie Ebbers away on fraud charges. The jury in the fraud trial of ex-HealthSouth (HLSH Quote) chief Richard Scrushy is in its 16th day of deliberations.

Ron Geffner, an attorney with Sadis & Goldberg and a former Securities and Exchange Commission lawyer, says he's surprised the Kozlowski jury took 11 days to render a verdict, given that the prosecution's case took nearly three months to present.