Mark A. Belnick, Tyco International Ltd.’s former top lawyer, testified Friday that he didn’t challenge L. Dennis Kozlowski and Mark H. Swartz, the company’s former top two executives, when they told him he was eligible for a loan under its New York relocation program.
During cross-examination by Assistant District Attorney John Moscow, Belnick said he was concerned the program, which was created to move employees from the Bermuda-based conglomerate’s New Hampshire offices to New York in 1995, didn’t apply to him. When he was initially hired in 1998, he said he was told by Swartz, Tyco’s former financial chief, that the program was a “template” and was customized to the individual employee.
Belnick said he didn’t go beyond Swartz or Kozlowski, Tyco’s former chairman and chief executive, to double check whether any changes to the relocation program to suit his needs were approved by the company’s compensation committee.
“My belief was the program applied to me and was approved by the compensation committee,” Belnick said in his fourth day of testimony. “Mr. Swartz and Mr. Kozlowski told me I was eligible for it.”
Belnick is on trial in New York State Supreme Court in Manhattan, charged with grand larceny, securities fraud and falsifying business records about $32 million in bonuses and loans he received while working as Tyco’s chief corporate counsel. He faces up to 25 years in prison on the most serious charge of grand larceny. He has denied wrongdoing.
In 2002, Kozlowski and Mark Swartz were indicted on charges of stealing $600 million from Tyco. Their trial was aborted two months ago after a juror received a menacing letter. They are expected to be retried in January.
Prosecutors said Belnick failed to disclose on his annual directors and officers questionnaire more than $14 million in relocations loans, which were used for the New York apartment and a home in Utah.
On Friday, Belnick acknowledged that he didn’t closely review a loan agreement and other documents from Tyco under which he ultimately borrowed more than $4 million to purchase and renovate an apartment near Manhattan’s Central Park.
Moscow, the prosecutor, also challenged Belnick on whether the loan was secured for Tyco. Belnick has testified the loan was secured by restricted stock provided to him in his hiring agreement.
Belnick said Friday the stock has been sold over time and options he received from the company have been exercised or have expired.
Belnick had earlier testified that he still owes money on his relocation loans, but intends to repay them pending the outcome of a separate civil lawsuit between him and Tyco.
Tyco, based in Bermuda but with U.S. headquarters in West Windsor, N.J., makes everything from telecommunications equipment to home alarm systems. In 2003, the corporation had sales of about $36 billion.