Sunday, May 14, 2006
Kozlowski Sales Tax Deal
Dennis Kozlowski, the jailed former Tyco CEO, has agreed to pay approximately $3 million in sales tax, interest, and penalties to avoid further prosecution. (He also agreed to pay about $17 million in back income taxes.) Art dealer Christine Berry had testified in the earlier trial that Kozlowski bought more than $14 million worth of paintings and had the invoices sent to Tyco's offices in New Hampshire, though the paintings actually went to Kozlowski's apartment in Manhattan. A memo from Berry to the shipping company showed how blatant the fraud was: "Here is a list of the five paintings to go to NH (wink, wink). Please make cardboard boxes or use crates to match the piece count. Cheers & thanks.'' Tyco prosecutor John Moscow makes an appearance to remind us that the sales tax evasion was the catalyst to the entire prosecution: "This is where we started four years ago, when we first looked at the sales tax due on the paintings and discovered the man who could afford $14 million for art was cheating on the 8.25 percent sales tax." So trying to save a million bucks or so in sales tax, Kozlowski ends up serving 8-25 years in (state!) prison and paying well over $100 million in restitution and back taxes (and who knows how much in legal fees). And counting. Think he'd like to have that one back?
Posted by Donn Zaretsky at 12:17 AM