NEW YORK – A jury of six men and six women was chosen Tuesday for the retrial of two former Tyco International Ltd. (TYC) executives accused of looting $600 million from the conglomerate.
Prosecution opening arguments in the case, in which former chief executive Dennis Kozlowski (search), 58, and former finance chief Mark Swartz (search), 44, are accused of using Tyco as their personal piggy bank, are set to begin on Wednesday.
The original case ended in a dramatic mistrial last April after an apparent holdout juror received a threatening letter, ending 12-days of deliberations jurors said were "poisonous."
The judge in the case had been pressured for a mistrial for days on the grounds that the media pressure had made it impossible for the jury to reach a verdict. That pressure came after an "OK" hand gesture from one juror toward the defense raised questions of jury tampering.
The new jury took one week to select and consists of 12 jurists and six alternates. Among them are a mortuary technician, a retired theatrical agent, a construction worker and several city employees and former bank employees.
During selection, Kozlowski's lawyer Stephen Kaufman asked potential jurors what they thought it took to succeed in business and whether they might be prejudiced against wealthy people, lavish lifestyles, corporations or the media.
"My client earned more than $100 million a year. Would that fact be something that you would question or doubt," he asked.
Prosecutor Kenneth Chalifoux told potential jurors the defendants had families and asked if this would stop them reaching a guilty verdict and also questioned how they would feel if asked to transfer funds out of their boss's account.
Jurors were also asked if their judgment would be affected by hearing or reading about the $2 million Kozlowski spent on his wife's 40th birthday party — something that was covered in lurid detail by new York tabloids.
During the retrial prosecutors will place less emphasis on Kozlowski's lavish spending, such as payments of $5 million for a diamond ring and $15 million for home furnishings, including $600,000 on a shower curtain.
Instead they will focus on charges that the two men stole $170 million by hiding unauthorized bonuses and secretly forgiving loans to themselves as well as obtaining an additional $430 million through fraudulent stock sales.
Defense lawyers, who contend Tyco approved all payments to the men, will make their opening statements on Thursday. The first testimony is expected Monday.
Kozlowski and Swartz are charged with 31 counts including grand larceny, conspiracy and falsifying business records.
State Supreme Court Judge Michael Obus, who presided over the first trial, recently dismissed an enterprise corruption charge against the men — a charge of running a business criminally which is normally reserved for mobsters.
The first trial lasted six months and cost prosecutors $6 million. The retrial is expected to last four months.
If convicted, the two men face up to 30 years in prison.
Kozlowski and Swartz built Tyco into one of the world's biggest conglomerates. Their trial was seen as a pivotal one among a slew of U.S. corporate scandals in recent years.
Tyco's general counsel Mark Belnick was acquitted in a separate case last year of conspiring with Kozlowski and Swartz to take a $17 million bonus to help Kozlowski cover up suspicious payments to his girlfriend and falsifying business records to conceal $14 million in loans.