Posted by Kate Robinson.
Tyco International, Limited, is a corporation that provides over three million customers globally with fire protection and security products and services. It is currently the world’s largest pure-play fire and security company. Tyco is incorporated in Switzerland and its operational headquarters are located in Princeton, New Jersey.
In 2002, Tyco’s former CEO, Dennis Kozlowski and CFO, Mark Swartz, were charged for stealing $150 million and inflating the company income by $500 million. The two of them were siphoning money through unapproved loans and fraudulent stock sales. They would then smuggle the money out of the company disguised as executive bonuses and benefits.
The Securities and Exchange Commission (SEC) and the Manhattan District Attorney investigated the scheme and uncovered questionable accounting practices, such as large loans made out to Mr. Kozlowski, which were later forgiven. After discovering these violations, Mr. Kozlowski and Mr. Swartz were sentenced to 8 to 25 years in prison and a lawsuit was filed forcing Tyco to pay back $2.92 billion to their investors.
Kate is a sports, events and tourism marketing major at Montclair State University, Class of 2017.