A judge allowed former Tyco International Ltd. (TYC) chief executive L. Dennis Kozlowski and former chief financial officer Mark Swartz to remain free on bail Thursday, pending a hearing on whether assets pledged for the bonds came from alleged multimillion dollar fraud.

State Supreme Court Justice Michael Obus set a Sept. 27 hearing to discuss the source of the money, which prosecutors contend was stolen from the company and should not be used for their bail.

Assistant District Attorney John Moscow also said, "We expect to bring additional charges against additional defendants." He declined to elaborate.

Meanwhile, a person with knowledge of the case told The Associated Press on Thursday that Tyco is in the process of selling the posh Fifth Avenue apartment and its antiques and furnishings that Kozlowski allegedly bought with Tyco money.

The auction house, Sotheby's, has been in the $16.8 million home once to look it over, but it has not yet been appraised, the person said.

Kozlowski and Swartz were charged last week with enterprise corruption and grand larceny for allegedly stealing some $600 million from Tyco. They face up to 25 years in prison on each of those charges if convicted.

Lawyers for Kozlowski and Swartz had complained earlier this week that the men's personal assets had been frozen, and money offered by relatives and others for the bail had been rejected by prosecutors as possible proceeds of the crimes with which they are charged.

Kozlowski's ex-wife, Angie, was expected to post $10 million in cash later Thursday on Kozlowski's $100 million bond, said his lawyer, Stephen Kaufman.

Swartz's lawyer, James Mitchell, said his client would post $5 million security on $50 million with shares of Tyco stock, either Thursday or Friday. That was 4.02 million shares of Tyco stock, worth $6.7 million, based on Wednesday prices.

"When the bail is posted, we will check it out," Moscow said.

Kaufman said Kozlowski's ex-wife would be available for the hearing next week. "She's been very supportive of her husband," he said.

Tyco's former general counsel, Mark Belnick, 55, was charged last week with falsifying business records to cover up $14 million in improper loans. He faces up to four years in prison if convicted.

Belnick appeared at a separate hearing Thursday on his $1 million personal recognizance bond.

Moscow said he had no plans to consolidate Belnick's case with those of Kozlowski and Swartz.

No trial was set for either case.

Prosecutors filed criminal charges against the men last week soon after the Securities and Exchange Commission accused them of hiding huge loans and other money they allegedly took out of Tyco.

The SEC said Kozlowski used $242 million from an employee loan program, established to help workers buy Tyco stock, to pay for yachts, fine art, jewelry, luxury apartments and vacations.

Kozlowski already had been indicted in June on charges of evading New York sales taxes on $13 million in art, including works by Renoir and Monet.

He resigned from Tyco in June a day before being indicted. He has pleaded innocent in that case.