“These defendants were trusted with the assets of their company, and they abused that trust,” Chalifoux said.
On his way into the courtroom, Kozlowski said: “I’m just glad it’s finally getting under way.”
While prosecutors consider what happened at Tyco an example of massive corporate larceny, defense attorneys say the executives were being properly rewarded for building Tyco into one of the world’s largest companies.
Kozlowski, 51, and Swartz, 45, face larceny charges, enterprise corruption _ a charge usually aimed at organized crime figures _ and lesser offenses that include filing false business records and conspiracy.
Both could get up to 30 years in prison if convicted.
Prosecutors say Kozlowski and Swartz stole $170 million by claiming unauthorized compensation and made another $430 million on their Tyco shares by lying about the conglomerate’s financial condition from 1995 into 2002.
During opening arguments, Chalifoux said the men stole money even on top of handsome salaries _ in 2000, Kozlowski earned $106 million in pay and Swartz $54 million.
Chalifoux noted their alleged thefts tended to mirror that same ratio. From the pool of money they allegedly stole, he said, Kozlowski usually gave himself about twice as much as Swartz.
“They schemed to steal money and cover it up and they were very successful,” Chalifoux said.
The pair are expected to argue that the millions they are accused of stealing were actually loans and bonuses approved by the board and disclosed to outside auditors.
The key to their acquittal will be convincing a jury that the company’s board knew about the compensation, that they worked hard to improve Tyco and deserved the pay.
Kozlowski’s lawyer, Stephen Kaufman, said previously that while his client made more than $100 million in one year, “he earned all of it.” Kaufman has also contended that all the people who were supposed to know about the compensation did know.