Tyco's Kozlowski took hard line against embezzling crimes

In the same year he allegedly began stealing up to $600 million from Tyco International, former Chief Executive Dennis Kozlowski urged a judge to throw the book at an employee who had embezzled a fraction of that amount from a subsidiary.

"I view Mr. Shah's crime as particularly egregious," Kozlowski wrote to court officials in the 1995 case of Girish Shah, The Boston Globe reported yesterday. "Not only did he steal from the stockholders of this Fortune 500 company, but he breached the fiduciary duty placed in him by the company and his supervisor(s)."

Shah, an assistant controller at Tyco's Grinnell fire-protection division, had been charged in Houston with stealing $988,000 from the company over eight years. According to transcripts, Shah pleaded no contest in state court to overcharging customers and siphoning money from funds that went unclaimed by subcontractors.

Though Shah was ready to repay $728,000 immediately and borrow money from relatives to repay most of the rest, Kozlowski urged a sentence of 30 years in prison.

"I urge you to impress upon Mr. Shah and those others who commit similar crimes that wrongdoing of this nature against society is considered a grave matter by the Texas Court and will not be condoned," Kozlowski wrote seven years ago.

Shah, then 41, was sentenced to 20 years in prison and served 3-1/2 before being paroled in 1999.

Kozlowski and Tyco's then-chief financial officer, Mark Swartz, were charged in September with stealing $170 million from the company, partly by abusing bonus and loan programs and reaping an additional $430 million through improper securities sales in a series of self-dealings that stretched back to 1995.

They have pleaded not guilty to enterprise corruption and grand larceny, each punishable by up to 25 years in prison.

Shah, who lives in Sugar Land, Texas, said he never saw Kozlowski's letter.

Shah said he began embezzling after seeing his superiors take advantage of unfair bonus plans and was not surprised to hear of the indictments against his former bosses.

A report released Monday after a six-month internal investigation found "aggressive accounting" methods in use since 1999 to puff up Tyco's profits. It also concluded that the organization lacked a commitment to proper "ethics, integrity, accounting and corporate governance."

Kozlowski's lawyer, Stephen Kaufman, did not return phone calls Tuesday yesterday.

Three years after his release, Shah said he has held a few temporary jobs and done accounting work for his own clients.