The Rise And Fall of The Rise And Fall of Dennis KozlowskiDennis Kozlowski

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The Dennis KozlowskiThe Dennis Kozlowski Born November 16 1946 Newark.Born November 16 1946 Newark. Spent early age in humble Spent early age in humble

circumstances.circumstances. Used to deceive by telling others Used to deceive by telling others

that his father is a police detective.that his father is a police detective. Easy going kid.He did well in school Easy going kid.He did well in school

without too much hard work.without too much hard work. Elected as class politician in 1964.Elected as class politician in 1964.

Kozlowski joined Tyco in 1975, becoming Kozlowski joined Tyco in 1975, becoming CEO in 1992. in 1992.

Did a wonderful work by many strategic Did a wonderful work by many strategic acquisition and merger.acquisition and merger.

Tyco BackgroundTyco Background Fire & Security productsFire & Security products ElectronicsElectronics Health CareHealth Care Engineered Products & ServicesEngineered Products & Services

Tyco BackgroundTyco Background Security & Fire Suppression Security & Fire Suppression

SystemsSystems Automobile partsAutomobile parts Firefighter equipmentFirefighter equipment Medical diagnostic equipmentMedical diagnostic equipment Water purification systemsWater purification systems

Mission StatementMission Statement ““We will increase the value of our We will increase the value of our

company and our global portfolio company and our global portfolio of diversified brands by of diversified brands by exceeding customers' exceeding customers' expectations and achieving expectations and achieving market leadership and operating market leadership and operating excellence in every segment of excellence in every segment of our company.”our company.”

The Good, Bad & Ugly The Good, Bad & Ugly ScenarioScenarioTHE GOOD SCENARIO:-THE GOOD SCENARIO:-

High rate of growth for TYCO Int.High rate of growth for TYCO Int. TYCO was gobbling 200 companies a TYCO was gobbling 200 companies a

year.year. TYCO’s value increased 70-fold.TYCO’s value increased 70-fold. Proclaimed desire to be remembered as Proclaimed desire to be remembered as

world’s greatest business executive.world’s greatest business executive.

THE BAD SCENARIO:-THE BAD SCENARIO:-

Kozlowski & his former chief Kozlowski & his former chief financial officer were accused.financial officer were accused.

Both charged for stealing $170 Both charged for stealing $170 MillionMillion

Manipulating stock.Manipulating stock.

THE UGLY SCENARIO:-THE UGLY SCENARIO:- Kozlowski almost destroyed the Kozlowski almost destroyed the

company where he worked for 27 company where he worked for 27 years.years.

Value of company stock dropped Value of company stock dropped $90 billion.$90 billion.

Issues and Legal Issues and Legal ClaimsClaims Tax EvasionTax Evasion Misappropriation of corporate Misappropriation of corporate

fundsfunds Falsifying business records Falsifying business records

Specific InstancesSpecific Instances Evasion of $1 million in sales taxEvasion of $1 million in sales tax $600 million stolen corporate $600 million stolen corporate

fundsfunds Took out company loans without Took out company loans without

informing investorsinforming investors Spent $1 million in company Spent $1 million in company

funds for wife’s birthday partyfunds for wife’s birthday party

TimelineTimeline

Timeline FactsTimeline Facts Kozlowski treated Tyco as his Kozlowski treated Tyco as his

private bank, taking out hundreds private bank, taking out hundreds of millions of dollars of loans and of millions of dollars of loans and compensation without ever telling compensation without ever telling investors.investors.

Timeline FactsTimeline Facts Kozlowski allegedly billed Tyco Kozlowski allegedly billed Tyco

$72,042 for jewelry, $155,067 for $72,042 for jewelry, $155,067 for clothing, $96,943 for flowers, clothing, $96,943 for flowers, $60,427 for club memberships, $60,427 for club memberships, $52,334 for wine and $110,000 $52,334 for wine and $110,000 for corporate use of his personal for corporate use of his personal yacht yacht

Timeline FactsTimeline Facts Kozlowski also allegedly pillaged a fund Kozlowski also allegedly pillaged a fund

Tyco uses to help executives relocate to Tyco uses to help executives relocate to buy his first wife, Angie, a $7 million Park buy his first wife, Angie, a $7 million Park Ave. apartment. Swartz dipped into the Ave. apartment. Swartz dipped into the fund to buy a $6.5 million Upper East fund to buy a $6.5 million Upper East Side apartment, according to authorities. Side apartment, according to authorities. So did Belnick, investigators said, who So did Belnick, investigators said, who used $14 million to buy a Central Park used $14 million to buy a Central Park West pad and a ski chalet in Utah. West pad and a ski chalet in Utah.

Dennis KozlowskiDennis Kozlowski Sentenced 8 years and 4 months Sentenced 8 years and 4 months

to 25 years in prison.to 25 years in prison.

Thank YouThank You