Tyco Jury Resumes Deliberations in $600M Fraud Trial

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Jurors ended their first full day of deliberations Friday in the trial of two former top executives accused of looting $600 million from Tyco International Inc. (TYC) without reaching a verdict.

State Justice Michael Obus gave background on the term "criminal intent (search)" in response to a question raised by the panel Thursday, shortly after deliberations began. He also answered several other requests, including explanation of the term "good faith."

Jurors will resume deliberations on Monday.

Prosecutors complained when Obus said he would inform the jury that criminal intent was meant to describe a defendant's state of mind, and that there was no separate definition of the term.

"That's what the law says," Obus told prosecutor Ann Donnelly. "I know you're not crazy about it, but we just work here."

The jury also requested readbacks of testimony from two witnesses, including co-defendant Mark Swartz (search). But after Obus told jurors it would take most of two days for those readbacks, they sent out another note saying they didn't want them.

L. Dennis Kozlowski (search), Tyco's former chief executive officer, and Swartz, the former chief financial officer, are charged with a total of 32 counts of grand larceny, falsifying business records and violating state business laws. They each could face up to 30 years in prison if convicted.

During the trial, which opened Oct. 7, jurors heard 47 witnesses and saw more than 700 exhibits, including two videotapes of a birthday bacchanal on a Mediterranean island and an $18 million Fifth Avenue apartment with a $6,000 shower curtain in the maid's room.

The jurors sent out a note less than 10 minutes after they started deliberations Thursday, asking for a chart prosecutors used during summations to list 68 overt acts they say the defendants committed as part of their alleged conspiracy. Obus told the jurors he would read any or all of the list if they requested.

Prosecutors say Kozlowski, 57, and Swartz, 43, stole $170 million to finance their lavish lifestyles by taking unauthorized bonuses and abusing company loan programs. They say the two netted an additional $430 million by pumping up Tyco stock prices and selling their shares at market rates from 1995 through 2002.

The defense argued that the two men earned every dime and that the board of directors and the company's auditors knew about the compensation and never objected. Kozlowski once made more than $100 million in one year.

Kozlowski's defense team rested last month without calling him to the stand. Swartz did testify, saying that he didn't do anything he believed was illegal. He said he and Kozlowski received bonuses and loan forgiveness at many informal company board meetings at which no minutes were recorded.

"Criminals act in criminal ways," Kozlowski defense lawyer Stephen Kaufman told jurors in closing arguments.

"The board of directors supported Dennis 100 percent of the time," he said. "This board was so supportive of Dennis, they said he could spend $200 million whenever he wanted."

Tyco, which has about 270,000 employees and $36 billion in annual revenue, makes electronics and medical supplies and owns the ADT home security business. Its operations headquarters are in West Windsor, N.J., but the company is based in Bermuda.