What is Dennis Kozlowski’s Net Worth?
Dennis Kozlowski is an American businessman and convicted criminal who had a peak net worth of $600 million. Dennis Kozlowski served as the CEO of Tyco International for two decades. While serving as CEO of Tyco, Dennis gained considerable notoriety for his lavish parties and lifestyle that were funded by Tyco. In 2002, he resigned amid a massive scandal involving financial fraud. Kozlowski received a conviction in 2005 and served around nine years in prison before his conditional release in early 2014.
He was eventually tried and convicted of receiving unusually high bonuses and paychecks totaling more than $80 million. He was also convicted of illegally receiving $14 million worth of art and fraudulently authorizing a $20 million payment to a Tyco investment banker. He was sentenced to serve 8 to 25 years in prison at Mid-State Correctional Facility.
Dennis Kozlowski’s most famous extravagances included a $30 million NYC apartment that was paid for by Tyco. This apartment famously featured a $6,000 shower curtain and a $15,000 dog umbrella stand.
Tyco also spent $1 million on a lavish 40th birthday party for Dennis’ former wife on the Italian island of Sardinia. In total, Dennis received more than $150 million in cash and bonuses from Tyco and earned an additional $430 million by artificially inflating the company’s stock price. In addition to jail time, Kozlowski was ordered to pay $134 million back to Tyco and a $70 million fine to the US government.
Early Life and Education
Dennis Kozlowski was born as Leo Dennis Kozlowski on November 16, 1946 in Newark, New Jersey to Leo Sr., who worked for the Public Service Transport, and Agnes, who worked for the Newark Police Department. Both of his parents were second-generation Polish-Americans. As a young adult, Kozlowski went to Seton Hall University in South Orange, New Jersey.
In 1975, Kozlowski joined the security systems company Tyco International; later, in 1992, he became its CEO. In that position, he led the company through a major expansion fueled by a series of mergers and acquisitions. Throughout the 90s, Tyco acquired such companies as Preferred Pipe; Thorn Security; Sempell; Raychem; Wormald International; Tectron Tube; ElectroStar; Submarine Systems; and Professional Medical Products, among many others. In 1997, Tyco merged via reverse takeover with the security services company ADT, as a result moving its incorporation to the tax haven of Bermuda.
Kozlowski and Tyco continued to aggressively acquire companies into the new millennium, with notable purchases including General Surgical Innovations, AFC Cable, Siemens Electromechanical Components, and Mallinckrodt. However, despite its myriad acquisitions, Tyco incurred major losses as well, including $3 billion lost for the fiscal year 2002.
In 2002, Kozlowski resigned as Tyco CEO amid a massive financial fraud scandal. The company was alleged to have violated the Securities Exchange Act by failing to disclose crucial financial information and reporting inflated earnings. Kozlowski himself was tried twice; during his trials, he denied ever committing a crime as CEO. Despite his claims, both he and former Tyco CFO Mark Swartz were convicted in 2005 on multiple counts of securities fraud, grand larceny, and falsifying business records. Kozlowski’s specific crimes included receiving $81 million in apparently unauthorized bonuses and paying former Tyco director Frank Walsh a $20 million investment banking fee.
For his crimes, Kozlowski was sentenced by the Manhattan Supreme Court to eight-to-25 years in prison. Moreover, he and Swartz were ordered to pay a total sum of $134 million in restitution, with Kozlowski issued an additional $70 million fine and Swartz a $35 million fine. Kozlowski was then sent to the Mid-State Correctional Facility in Marcy, New York, where he served over six years of his sentence. In the spring of 2012, he was denied parole. Kozlowski was subsequently transferred to the Lincoln Correctional Facility in New York City; he remained there until his conditional release in early 2014.
Faithless Servant Doctrine
In another consequence of his crimes, Kozlowski was sued by Tyco. The suit was successful, with the court ordering Kozlowski to forfeit the $500 million in compensation and benefits he earned during his period of disloyalty back to the company. This was made possible under New York’s faithless servant doctrine, which makes unfaithful employees pay back all compensation they received when they were disloyal to the company.
During his years at Tyco, Kozlowski became infamous for his decadent lifestyle, which was often compared to the debauchery of ancient Roman emperors. Reportedly, he had his company pay for his $30 million apartment in New York City, which boasted $6,000 shower curtains, among other exorbitant amenities. Additionally, he bought several acres in Boca Raton, Florida’s private gated community known as the Sanctuary, and purchased an oceanfront estate on Nantucket. Kozlowski continued to have Tyco subsidize many of his personal luxuries, including a $1 million birthday party for his wife Karen. Held in Sardinia in Italy, the party featured a private Jimmy Buffett concert and included an ice sculpture of Michelangelo’s “David” urinating vodka.
In 2006, Kozlowski got divorced from his wife Karen. He later married Kimberly, with whom he runs a number of businesses. Kozlowski serves as the chairman of the board of the Fortune Society, a nonprofit founded by David Rothenberg in 1967 to provide support services to formerly incarcerated individuals.