Dozens of low-level
employees received millions of dollars in company loans at the direction of ousted CEO Dennis Kozlowski, a filing by the company will reportedly show.
Tyco plans to make a filing with the
Securities and Exchange Commission
Monday or Tuesday in which it will describe in detail the alleged activities that led to the indictment of Kozlowski, former chief financial officer Mark Swartz and former corporate counsel Mark Belnick last week,
The New York Times
The filing will show that dozens of lower-level Tyco employees received loans at Kozlowski's behest that were later forgiven. The undisclosed loans came from two programs Tyco created to help employees pay taxes on stock and to help employees relocate to homes near Tyco's offices in Manhattan, the
The loans came to light in an internal investigation being led by attorney David Boies.
Kozlowski was indicted last week on larceny and fraud charges for allegedly looting Tyco of hundreds of millions of dollars through a system of undisclosed and unauthorized borrowings. He already faces criminal tax-evasion charges. Swartz was charged with similar crimes while Belnick was charged with falsifying records.
It was also revealed in the indictment that Kozlowski might have pressured
to install a company analyst more sympathetic to Tyco in late 1999. The analyst's lawyer denies any favoritism was played at Tyco's direction and said gifts exchanged between his client and Kozlowski were not sufficiently large to influence his research.