Mark A. Belnick wasn't the only employee to borrow from Tyco International Ltd. to cover moving expenses to a state where the company had no offices, a Tyco attorney said at Belnick's criminal trial Monday.
Belnick, Tyco's former top lawyer, is on trial, accused of taking more than $14.5 million in improper no-interest loans to relocate from Harrison, N.Y., to an apartment in Manhattan and later to Park City, Utah, where he built a house. Tyco had no corporate offices in Utah. Prosecutors say he got the loans and a $17 million bonus for covering up frauds committed by then-chief executive L. Dennis Kozlowski.
Under cross-examination by Belnick's attorney, Tyco Deputy General Counsel M. Brian Moroze told jurors that former treasurer Barbara Miller got a company loan in 1998 to build a house in Montana. Tyco has no corporate offices there.
"Am I correct that Ms. Miller had a loan to build a home in Montana?" defense attorney Robert Katzberg asked. "Yes," Moroze said.
Defense lawyers say that Belnick, 57, got the bonus as a reward for heading off an inquiry by the Securities and Exchange Commission into the company's accounting in 2000 and that the loans were proper.
Moroze told the court on direct examination last week that Belnick's loans went beyond the terms of the company's relocation program, which permitted employees who moved to borrow no more than five times their annual salary.
Belnick is charged with grand larceny, stock fraud and falsifying business records. He faces up to 25 years in prison if convicted.
In his interrogation of Moroze, Katzberg sought to show that Belnick's loans from Tyco did not differ significantly from those obtained by other high-level employees. Katzberg said Miller received four loans while she was employed at Tyco.
Katzberg also elicited testimony from Moroze that another corporate employee, Brad McGee, once received a Tyco loan to move from one apartment to another in the same building in Boca Raton, Fla.
The cross-examination drew objections from Assistant District Attorney John W. Moscow, who asked State Supreme Court Justice Michael J. Obus to limit the questions to Belnick's own conduct.
Katzberg said the point of his questions was to show that what Belnick did was the "normal appropriate conduct that took place at Tyco at that time."
Obus denied the prosecution's request.
Belnick is accused of failing to disclose the relocation loans when he filled out company questionnaires used to prepare SEC filings. Prosecutors say the loans went beyond the stated purpose for borrowing the money and should have been reported.
Obus declared a mistrial last month in the prosecution of Kozlowski, 57, and former Tyco chief financial officer Mark H. Swartz, 43, citing threats to one of the jurors. The two men were charged with looting the company of $600 million.