NEW YORK — The judge hearing the larceny trial of Mark Belnick, Tyco International's former top lawyer, denied a motion for a mistrial Wednesday after a prosecutor tried to use a document in a way the defense called prejudicial.
Assistant District Attorney John Moscow was discussing the Tyco loan activity of former chief executive L. Dennis Kozlowski when he produced a document showing that many of the ousted CEO's loans were forgiven and never repaid.
Moscow's apparent purpose was to show Belnick knew about Kozlowski's alleged looting of a loan program meant to help employees pay taxes on Tyco stock. He alleges Kozlowski later bought Belnick's silence with a bonus worth as much as $17 million.
State Supreme Court Justice Michael Obus said he allowed Moscow to use the document to show Kozlowski used his key employee loan account for several kinds of borrowing.
Belnick, 57, is in his ninth week of trial in Manhattan on charges of first-degree grand larceny, falsifying business records and securities fraud. He could face up to 25 years in prison if convicted on the top count, grand larceny.
During seven days on the witness stand, Belnick testified that Kozlowski awarded him a bonus — $2 million cash and 300,000 shares of stock — for successfully guiding Tyco through a Securities and Exchange Commission inquiry.
Prosecutors say Belnick got the bonus not for legal work but as a payoff for helping to hide Kozlowski's alleged thefts during the SEC probe. And, prosecutors say, Belnick knew the bonus was illegal because he knew Kozlowski was not authorized to grant it and he knew Tyco's board never approved it.
Defense attorney Reid Weingarten said as he ended summations Wednesday that Belnick "had no reason to think there was anything wrong with the authorization process."
Belnick testified that after Kozlowski recruited him in 1998 he told him he would set Belnick's compensation and review it with the Tyco board of directors. He said this led him to believe Kozlowski was authorized to pay him whatever he decided.
Weingarten said Belnick's bonus and nearly $15 million in relocation loans were omitted from certain documents because Kozlowski and chief financial officer Mark Swartz said they did not have to be disclosed.
Belnick was an "utterly honorable man" who relied on his colleagues for guidance about rules that related to the company, Weingarten said. Nothing about Belnick's job as general counsel "prevented him from relying on the words of his colleagues," the attorney said.
Weingarten recalled that at least five other Tyco officials, some of them board members, testified they "absolutely" relied on Kozlowski's word regarding almost anything related to the company.
Tyco directors "thought Kozlowski could walk on water," the lawyer said.
The judge has said he will instruct jurors that they may consider what the defendant reasonably believed or intended when they consider a verdict.
The issue of criminal intent became a major issue for jurors earlier this year in the $600 million larceny trial of Kozlowski, 57, and Swartz, 43. The jury sent out several notes asking the judge for elaboration.
That trial ended in a mistrial in May after a juror received a menacing letter. Kozlowski and Swartz are to be retried in January.
Tyco, based in Bermuda but with U.S. headquarters in West Windsor, N.J., makes everything from telecommunications equipment to home alarm systems. The company had more than 250,000 employees and sales of about $36 billion last year