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Thursday, 19 September, 2002, 16:21 GMT 17:21 UK
Tyco ex-boss granted $10m bail
Former Tyco CEO Dennis Kozlowski
Mr Kozlowski secured bail with cash from his ex-wife
Former Tyco chief executive Dennis Kozlowski remains a free man at least for one more week after his ex-wife agreed to put up millions of dollars to keep him out of jail.

A state court judge granted Mr Kozlowski and Tyco's former chief financial officer, Mark Swartz, bail backed by either cash or Tyco stock during a hearing in a Manhattan court.

The judge, however, has yet to determine whether the $10m (6.4m) in bail is tainted, acquired through illegal means when Mr Kozlowski was still the top man at Tyco.

Prosecutors questioned the source of the funds and have until next week to present evidence that the proceeds were attained through criminal acts.

"We need to speak to witnesses before making a determination as to whether we will accept the funds," lead prosecutor John Moscow from the Manhattan District Attorney's office said at the hearing.

Criminal enterprise

The judge in the case, Manhattan Supreme Court Judge Michael Obus, set a hearing date next week to decide the bail issue.

He will also decide whether Mr Kozlowski and Mr Swartz will serve time at Riker's Island, an infamous New York prison known as one of the toughest in the New York state corrections system.

Mr Kozlowski's ex-wife, Angie, is expected to put up $10m of his $100m bond on Thursday.

Mr Swartz is expected to post $5m security on his bail amount of $50m with shares of Tyco stock, either on Thursday or Friday.

Both men were released following the hearing.

They now await charges of using the firm as a "criminal enterprise" and are scheduled to appear in court on 27 September.

Lavish spending

Mr Kozlowski's assets have been frozen following his indictment last week. Prosecutors believe much of his cash and property was acquired through fraudulent accounting.

Messrs Kozlowski and Swartz have been charged with stealing more than $170m from the company and defrauding investors.

Mr Kozlowski reportedly used company funds for lavish personal spending and forgave $96m in company loans to 51 employees, including himself.

If convicted, both men face up to 25 years in prison on corruption and larceny charges and up to 30 years on conspiracy charges.


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