Tyco International Ltd.’s former top lawyer, Mark Belnick, “earned” the $17 million bonus he’s accused of stealing, defense lawyer Reid Weingarten told a New York jury.
The Tyco board was a “rubber stamp” that delegated almost all authority to L. Dennis Kozlowski, the chairman and chief executive, including power to award bonuses, Weingarten said in closing arguments at Belnick’s criminal trial. Prosecutors said the board never approved the bonus. Six former directors testified against Belnick in a trial that began in April.
“He was paid a lot of money at Tyco, money we believe was earned,” Weingarten said.
Belnick is charged with grand larceny for taking the bonus, which prosecutors say was a payoff for keeping quiet about fraud at Tyco, including a $100,000 payment to Kozlowski’s girlfriend. Among the issues the jury must decide is whether Belnick was justified in relying on Kozlowski’s authority to give the bonus.
Belnick claims the payment was a reward for convincing U.S. regulators to end an investigation into Tyco’s accounting in 2000. He is also charged with stock fraud and falsifying business records.
Kozlowski and former Chief Financial Officer Mark Swartz were accused of stealing $170 million in unauthorized compensation from Tyco. The case against the two former executives ended in a mistrial in April. A new trial is scheduled for January.
Tyco, the world’s biggest maker of security systems, is based in Bermuda and run from offices in West Windsor, New Jersey.