NEW YORK – Mark Belnick, Tyco International’s former top lawyer, earned all of the millions of dollars Tyco paid him and prosecutors have yet to prove that he committed a single crime, a defense lawyer said in closing arguments Tuesday.
Lawyer Reid Weingarten suggested that Belnick is on trial as a scapegoat for the failings of others, mainly the board of directors that allowed the alleged excesses of Tyco’s former chief executive officer, Dennis Kozlowski, to go unchecked.
Belnick, 57, is now in his ninth week of trial in Manhattan’s state Supreme Court on charges of first-degree grand larceny, falsifying business records and securities fraud. He faces up to 25 years in prison if convicted on the top count, grand larceny.
Weingarten told jurors that Belnick believed that the compensation and loans he received at Tyco were properly authorized.
“He never made a decision or did anything that was not in good faith,” the defense lawyer said.
Prosecutors, however, contend that Belnick committed grand larceny when he accepted a bonus of $17 million in cash and stock awarded by Kozlowski. Belnick testified that Kozlowksi told him the bonus was for his work guiding Tyco unscathed through a Securities and Exchange Commission investigation.
But the government says the money was a payoff for helping to hide Kozlowski’s alleged thefts during the SEC probe. And, prosecutors say, Belnick knew the bonus was illegal because he knew Kozlowski was not authorized to grant it and he knew that Tyco’s board never approved it.
The falsifying business records charge stems from Belnick’s alleged misuse of Tyco’s relocation loan programs. Prosecutors say he used the $15 million in loans to buy a Manhattan apartment and a $10 million house in the ski resort town of Park City, Utah, without noting the loans on the proper forms.
But Weingarten disputed that Belnick was the recipient of inappropriate treatment. Recalling the testimony of Tyco’s former human resources director, Patricia Prue, Weingarten said Kozlowski forgave 40 to 50 loans – including Prue’s – worth a total of $95 million in 2000.
“But Mark Belnick’s loan was never forgiven,” Weingarten said. “The ‘co-schemer’ with Kozlowski didn’t have his relocation loan forgiven but over 40 other people did.”
Weingarten said that when Belnick arrived at Tyco as general counsel in 1998, the company was a Wall Street favorite, loosely run with most authority delegated by the board of directors to Kozlowski and chief financial officer Mark Swartz.
The lawyer noted that the board had given Kozlowski authority to go out and spend up to $200 million to buy any company he wanted without further board approval.
“In truth, this board was very happy to ride up the Kozlowski elevator in the 1990s,” Weingarten said. “They made a lot of money doing so. They were in effect his rubber stamp.”
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