ALBANY, N.Y. (AP) — They face parole hearings soon, but ex-Tyco executives Dennis Kozlowski and Mark Swartz have already left a minimum-security prison in Harlem for steady clerical jobs and overnights in apartments following their headline-grabbing $134 million corporate fraud convictions.
Former CEO Kozlowski and ex-chief financial officer Swartz are among 304 inmates in the state’s work-release program, according to prison officials. After a period where they spent nights or weekends back at Lincoln Correctional Facility, they have only had to report in weekly since July.
Defense attorneys say the men collectively paid $134 million in restitution to Tyco and $105 million in fines to the state after their 2005 convictions. They were sentenced to 8 1/3-to-25-years in prison for 22 counts of grand larceny, conspiracy, falsifying records and violating business law.
“I believe he should be paroled,” said Kozlowski’s attorney, Alan Lewis. He said his client didn’t get any special treatment in getting placed in the work-release program. Kozlowski’s parole hearing, after two recent postponements, is now scheduled for the week of Dec. 2.
Attorney Charles Stillman confirmed that Swartz long ago paid all his financial penalties, but he declined to comment further. Swartz’s parole hearing is scheduled for next week. The 53-year-old Swartz has been working as a law office assistant, while 66-year-old Kozlowski is a clerk at a software company.
Their lawyers and state officials won’t say exactly where the men are working or living. The Manhattan district attorney’s office, which opposed Kozlowski’s parole bid last year, did not immediately respond to requests for comment Monday. The Tyco chief executive, who became an emblem of corporate excess, and his CFO were prosecuted under then-District Attorney Robert Morgenthau.
The release programs are for inmates considered non-violent, with each individual and job approved by a corrections department committee. The panel has authority to reject any work in which the inmate has an opportunity to repeat past crimes.
“Technically you’re still an inmate,” corrections spokeswoman Linda Foglia said. “You’re following a strict contract.” The Parole Board concluded in April 2012 that Kozlowski’s release would undermine respect for the law. He got an early hearing because he had accrued merit time in prison.
Kozlowski told the parole officials he’d turned down an informal offer to plead guilty in exchange for a sentence of two to six years, saying he rationalized that he wasn’t guilty. Jurors heard about Kozlowski’s $6,000 gold-threaded shower curtain and a $2 million birthday party he threw for his wife on the Mediterranean island of Sardinia.
“I knew I was doing something wrong at some level when I did it. My conscience told me one thing, but my sense of entitlement allowed me to rationalize what I did,” Kozlowski told the board. “After I was in prison for a bit and thinking hard about what I did, I recognized my rationalizations were just that.”
Kozlowski and Swartz were accused of giving themselves as much as $150 million in illegal bonuses and forgiving millions of dollars in loans to themselves, while also manipulating the price of the security systems company’s stock by lying about the state of its finances. The executives said at trial the payments had, in fact, been authorized.
Work release is approved for a fraction of New York’s approximately 54,600 prisoners. In their latest report, corrections officials said the program provides a viable and effective transition back to communities and families while maintaining public safety. Out of 23,641 applications last year, 948 prisoners were put on temporary release, collectively earning more than $2.5 million and paying $720,000 in taxes. Eight ran off and 23 were arrested, one for a violent felony. Seven of the eight were returned to prison.
Since 1995, prisoners in the program have earned more than $154 million, paid $42.6 million in federal, state and local taxes and were forced to save $51.3 million, the report said. Totals have dropped from nearly 7,000 prisoners on work release in 2000 as the prison system has shed thousands of non-violent inmates following revisions in the tough Rockefeller-era drug laws and the closing of several minimum-security state prisons.
Associated Press Writer Jennifer Peltz in New York contributed to this report.