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Kit Menkin's Leasing News www.leasingnews.org
Friday, September 20, 2002 Accurate, fair and
unbiased news for the equipment Leasing Industry Thursday’s Leasing News posted www.leasingnews.org at 10:25am PDT ----------------------------------------------------------------------------- e-Mail Removal
Form: \http://65.209.205.32/LeasingNews/removalform.asp ----------------------------------------------------------------------------- Pictures from the Past
He is a past Chancellor of the Exchequer Club of Washington,
the organization for all financial industry trade associations and federal
agencies in the financial services sector. He also served on the Board
of Directors for the American Society of Association Executives (ASAE).
He is currently a member of the Board of Governors of the City Club of
Washington. He has been active in the business organizations of each major
political party during his tenure at ELA. He is a member of the U.S. Chamber
of Commerce's Committee of 100. -------------------------------------------------------------------------------------------- Classified Ads---- Name = Barbara Griffith Comments = Please delete the ad in Leasenews for doc person. The position is full (We will do it. Were
we of any success in helping fill the position? Was it useful to you? Any comments or suggestions you might have?) yes yes yes.....readers really like the newsletters.... Barbara Help Wanted ads Marketing: Indianapolis, IN "ELA" Marketing manager to help develop/execute marketing plan.
Great culture, wonderful people. Your exp. w/direct, vendor, and internet
marketing in financial services industry is what we need. Email:dcatalano@midwestbankers.com Office Mgr./Admin person: Newton, MA. "ELA", "EAEL", "NAELB" Broker seeks person
with computer/ organizational skills/ knowledge of leasing process. Salary/Bonuses.
Call Mark/617-641- 9628, ext 11. Email:markg@integrityleasing.com Operations: Phoenix, AZ "UAEL" Lessor of all types of equipment needs Leasing Coordinator.
Should have experience with documentation, UCC's, vehicle titles &
collections. Light reception. Benefits. Salary DOE. Email:cthiebeau@manufacturersleasing.com Portfolio Manager: San Francisco, CA "ELA" Rail Assets to oversee various responsibilities concerning
rail equipment portfolio.Min. 7 years direct asset mgmt. exp. working
with rail equipment/contact base. Call Mari Lynch 415 616-3478. Email:mlynch@atel.com Sales: Tustin, CA
"UAEL" Orange County Ca, Broker/Lessor looking for top gun sales associates, Aggressive commission split, good working atmosphere. Strong funding sources. Email:Bgriffith@socalleasing.com or 714-573-9804 Sales: Pittsburgh, PA "UAEL" Pittsburgh based broker seeks aggressive, proven small ticket
sales rep. No location preference. Strong split of commissions paid weekly.
Email:occ@sgi.net http://65.209.205.32/LeasingNews/JobPostingsWanted.htm Headlines--- Alert-Neytronix,
Los Angeles, CA--Alert American
Equipment Finance Continues Expansion August
Housing Starts Fall/ Third Month in a Row 2002
State of the Industry Report to Debut at ELA Convention John
E. Harvey-----New Certified Leasing Professional CLP
"Instructors" Reaction to Jeff Taylor: "
I Regret Sitting for the CLP Exam Next Month" Free
CapitalStream Advantage Training October 5th, San Diego CA Rent-To-Own
Bill Faces Uncertainty Mortgage
Rates fall to Lowest on Record This Period De
Lage Landen Names Guida VP-New Biz/Knotts appointed Director Ex-Wife
Tries to Post Bail for Kozlowski Judge
asks for better accounting of GE chief's lifestyle News
Briefs--- Mariucci
Vs. Superior (and it may well
be more than a pun) #### Denotes Press Release Monday---The Shame
of MSM Capital ----------------------------------------------------------------------------------------- Alert—Neytronix, Los Angeles, CA--Alert thank you again for publishing the "alerts".
If you did not publish our alert on Bridge Transport we would not have had enough
information to pursue with the FBI. Our
case was assigned to our local FBI office in Buffalo, NY which forwarded all documents to North Carolina.
The NC FBI call this week to update us as to their investigation and
are very optimistic they will get this guy. There is another
company Neytronix, Inc. 7907 Melrose Avenue Los Angeles, CA 90046 posing
to sell computer systems to physicians.
We contacted the real doctor on this and he verified it is a fraud
company. Kit we feel this
is an invaluable service you are providing and hope you continue. I would debate with anyone as to why as an
industry we need to share fraud alerts. John Gallo President M & C Leasing Co., Inc. 1050 Union Road Suite 2 West Seneca, New York 14224 (P)1-800-416-9080 (P)1-716-873-6800 (F)1-716-873-1002 www.mcleasing.com ### ############################################### American Equipment Finance Continues Expansion Richard A. Baccaro, President is pleased to announce that
Sylvia Stock and Emily Gordon have joined AEF as Sales Associates, and
will originate business from Charlotte, NC. "The addition of Ms. Stock and Gordon to the AEF family
is a great win for our company and our customers. The growth and success of AEF is dependent upon attracting, retaining and rewarding, vibrant
and talented professionals - and these women fit that billing" noted
Baccaro". "AEF has great funding resources, is very supportive
of their sales associates, and they are very focused on quality vendor opportunities. After discussions with other leasing companies in our industry,
joining AEF was an easy decision" indicated Stock. Richard Baccaro rbaccaro@aefllc.com ############ ######################################### --------------------------------------------------------------------------------------------- Credit Suisse Group is ousting Chief Executive Lukas Muehlemann
and replacing him with two co-CEOs: Credit Suisse First Boston
chief John Mack and Oswald Gruebel, head of the firm's financial services
business. Shareholders have been pushing for Mr. Muehlemann's removal
in the wake of widening losses at Zurich-based Credit Suisse. Walter Kielholz, the 51-year-old CEO of Swiss Reinsurance
Co., will become chairman of Credit Suisse. Mr. Muehlemann had said
in July he would step down as chairman. Mr. Mack, 58, will remain as head of CSFB and Mr. Gruebel,
59, will continue to lead Credit Suisse Financial Services. August Housing Starts Fall/ Third Month in a Row Starts retreated for the 3rd consecutive month in August,
falling 2.2% to a 1.609 million rate (SAAR).
Single family was down 4.4% while multi family was up 6.2%. Permits, an indicator of future activity,
were also down (-2.5%), but the weakness was in multi family (down 15%)
while single family was up almost 2%.
Regionally, the Midwest was the weakest, falling almost 19% with
the West also down 1.6%, while the Northeast and South were up 9.4% and
3.1% respectively. Analysis and outlook: Although
starts have fallen for three consecutive months, current levels continue
at a healthy pace with single family activity continuing as the main driver.
Mortgage rates, at 40 year lows, are supporting the housing market and
fueling a refinancing boom that is supporting consumer spending and keeping
the rest of the economy from slipping back into a recession. There are increasing concerns by some people that a housing
bubble may be emerging in some regions where prices increases have far exceeded disposable income growth, thereby
suggesting current price levels are not sustainable. Real estate analysts compare home prices with
economic conditions to determine where housing is most overpriced. Economy.com (Mark Zandi) looking at income,
builder costs, and supply of homes lists Naples,FL, Monmouth-Ocean, NJ,
and San Jose, CA as most overpriced metro areas; Fidelity National Info.
Solutions in Honolulu, using employment, income and mortgage rates, lists
Tacoma, San Diago and Denver as most overpriced; and John Burns Real Estate
Consulting in Irving, CA, using income and mortgage payments, list Boston,
San Diego and Fort Lauderdale, FL as most overpriced.
One other gauge is the ratio of house prices to average disposable
income, the equivalent of p/e ratios for stocks.
In the U.S., this ratio is getting close to a peak achieved in
the late 80's, and for some of the cities listed below, it is "flashing
red" (The Economist August 31, 2002).
Most analysts agree (including Alan Greenspan and Dave Seiders/NAHB)
that, on a national basis, there is little evidence of a "housing
bubble", although some metro regions are overpriced. Will housing
collapse? No way. There
is little evidence of widespread speculation (as occurred in Japan in
late 80's). Although mortgage
foreclosures recently hit record levels, most Americans continue to be
able to make their mortgage payments.
The main concerns, looking forward, are consumer confidence,
job and income growth, and interest rates. Potential war with Iraq will sap confidence
as well as drive energy and gasoline costs higher, and this will impact
inflation, and eventually interest rates/mortgage rates moderately higher. The manufacturing sector continues to be a
problem - and that means this economic recovery (and any improvement in
the employment picture) may take longer than what analysts were predicting
6 months ago. The housing market
should remain the strongest sector of the economy.
However, housing has to eventually slow down, simply because the
current starts level exceed sustainable demand. Estimates by NAHB and
RISI - Resource Information Systems, Inc. - suggest sustainable demand
(based on demographics) is somewhere between 1.8 and 1.9 million units
annually for the decade we are in. If
we assume about 300,000 for mobile home shipments, that leaves about 1.6
million annually for conventional housing.
Both 2001 (1.603 million) and estimates for this year (1.645 million)
exceed sustainable levels. NAHB's latest outlook for next year is 1.587
million (1.27 million SF) Annual Chart of
Housing Starts http://www.leasingnews.org/articles.doc/August_HS1.htm This Month Housing
Breakdown by Area http://www.leasingnews.org/articles.doc/AugustUshs.htm Courtesy from: Carl Villella, CLP Onyx Capital Corp. 8150 Perry Hwy. Suite 211 Pittsburgh, Pa. 15237 412-366-6100 412-366-9144 fax 412-980-6139 cell CVillella@msn.com ---------------------------------------------------------------------------------------------- 2002 State of the Industry Report to Debut at ELA Convention The 2002 State of the Industry Report provides you an in-depth
analysis of the equipment lease financing industry including industry
trends, projections, interpretations and observations of lessors across
the country. The Report, conducted by PriceWaterhouse Coopers, uses ELA's
Survey of Industry Activity numbers, interviews and economic indicators
to analyze the state of the lease financing industry. The Report will be distributed during Monday's convention
session on the State of the Industry and copies will be available from
the Foundation booth during the Convention. Companies donating to the
Foundation may receive an advanced electronic copy. For information on
the Report and to receive your advanced copy, contact Lisa Levine, llevine@elamail.com,
or 703-527-8655 CONTACT: Lisa Levine Equipment Leasing and Finance Foundation Phone Number: 703-527-8655 E-mail: llevine@elamail.com Equipment Leasing Association 41st Annual Convention October 13-15,2002 San
Francisco Marriott Hotel October
3 Receipt Deadline -------------------------------------------------------------------------------------- John E. Harvey-----New Certified Leasing Professional The CLP Foundation
Board of Directors would like to congratulate John E. Harvey, CLP, President
of Enterprise Financial Solutions,
Inc. located in Little Rock, AR. We
would like to welcome him as our newest Certified Lease Professional. Enterprise
Financial Solutions is a member of the NAELB. For further information
about the CLP Program please call Cindy Spurdle, Executive Director, at
610/687-0213 or visit our web
site -- www.clpfoundation.org. Thank you, Cindy Cindy Spurdle Executive Director CLP Foundation Cindy@clpfoundation.org PH: 610/687-0213 FAX:610/687-4111 CLP “Instructors”
Reaction to Jeff Taylor: " I
Regret Sitting for the CLP Exam Next Month" http://executivecaliber.ws/sys-tmpl/clp/ Kit: I have to admire Jeff Taylor for going public with his
fear of taking the CLP exam. Many of us had the same fears, especially people
who had been in the leasing business for years. Of course Jeff should
not be concerned about his performance. With his background and knowledge
I am sure that he will do very well. It's possible that his concerns stem from his misconception
that the Test is a test of a book, specifically The Leasing Professionals'
Handbook. The Test is not and has never been a test of any particular book.
Rather it is a test of the accumulated knowledge and experience of the candidate.
The Handbook is only one of many research sources available to CLP candidates.
The CLP Foundation maintains a list of appropriate study materials
and, I believe, provides this list to all candidates. In addition, the Foundation has a well-developed Mentor Program.
Any candidate can request a Mentor, who will help guide the candidate
throughout the studying process. Mentors, all volunteers, have registered
their specialties with the Foundation, so a candidate who feels
that he or she is weak in a particular subject can request a Mentor who is
knowledgeable in that subject. The Mentor Program is free to the candidate. I assume Jeff will take the one-day review class on Thursday,
October 3 in San Diego just prior to the UAEL Annual Fall Conference and
Exposition. So, if Jeff has any further questions, I'll be happy to answer
them there. I will be one of his instructors. Bob Teichman, CLP Teichman Financial Training 3030 Bridgeway, Suite 213 Sausalito, CA 94965 Tel: 415-331-6445 Fax: 415-331-6451 e-mail: BoTei@aol.com "Providing education and training to the equipment leasing
and financing industry." --- I read Jeffrey Taylor's comments regarding the CLP exam with
a great deal of interest. As you
know I had been intricately involved with the CLP program and I have always
believed that it should and could rise to a meaningful industry designation
rather than a designation, as Hal Horowitz points out, that is more "ego
satisfying" that professionally respected. I was also a contributor
to the Leasing Professional's Handbook.
Jeffrey is absolutely correct in stating that the book needs
to be updated. That book was never
meant to be the sole source of information for the CLP exam. We always estimated that the hand book would
only cover about 65-70% of the exam.
The handbook, the test and the entire CLP curriculum needs to be
updated to include more material on risk management, credit scoring, securitization,
and transaction structuring among other topics. Jeffrey was also correct in his characterization of the handbook
as a "compilation". All of the contributors were selected for
their special expertise in certain areas.
We then edited those individual sections to the extent we could
without altering the content of the original author.
The result was the Leasing Professional's handbook which has been
used by more than 200 CLPs that currently have the designation I think that Jeffrey Taylor may have missed the point. The
CLP designation was born out of the desire of the early leadership of
the WAEL to raise the level of professionalism in the industry. It's not
about the book. I would venture
to say that anyone who really wanted to pass that test could find all
the information needed from many sources available in the local library. The handbook served to point the CLP candidate
in the right direction. In retrospect,
with all that's happened in the past 4-5 years in our industry, I would
now classify what the early WAEL leadership attempted to do as "visionary".
They saw the need to establish a classification that would indicate
to the "buyer" that they were dealing with someone who was both
knowledgeable and ethical. There
probably aren't many of us that remember the early requirements for becoming
a CLP. Beyond passing the test, one had to accumulate
"points". You received
points for service to your industry and your association (WAEL at the
time), and it took 50 points to be allowed to sit for the exam. Under pressure, we subsequently dropped that
requirement so that any body with 5 years in leasing could take the test.
I had always considered that a mistake but I was only one vote back then. So Jeffrey, the test you are taking has still not attained
the status that we had hoped it would.
I will tell you however that I was proud of myself when I earned
my CLP designation because of the respect that I had for many of those
early leaders who pioneered the attempt to engineer a true professional
designation for our industry. Not to mention that the test is definitely
not a cakewalk. Subsequent leadership kept the quest for industry recognition
alive but, as we now know, professionalism and integrity took a back seat
to the "gold rush" mentality of the past several years.
It appears that we may have come full circle.
Hopefully there will be renewed interest in a professional designation
as the leasing industry seeks to polish its tarnished image on Main Street
as well as Wall Street. Bob Rodi, CLP President LeaseNOW, Inc. drlease@leasenow.com www.leasenow.com 1-800-321-LEAS (5327)x 101 --- I told Jeff Taylor that although I'm confident he will pass
the CLP exam, as he appears to
be one smart cookie, he deserves
a lot of credit for guts in announcing he's taking the test before actually passing
it. Of course, if he
fails, he will never hear the end of it. Kenneth D. Goodman,
CLP Midwest Leasing Group,
Inc. 24137 Grayston Drive Lake Forest, CA 92630 888/852-7560 or 949/583-7560 fax: 949/583-7275
- cell: 310/721-1751 kgoodman@midwestleasing.com ---- Another reason why people don't take the CLP exam is because
nobody is there to proctor the exam. I paid for the exam and took the study course last year in San Antonio. My intent was to take the test that weekend and I stayed over on Sunday to specifically do that. Unfortunately, nobody was there to give me the test, even
though I had signed up and notified the Foundation that I would be taking
the test. Since that time, nobody from the Foundation has called me,
nor have they refunded my money. Andrew Thorn athorn@nowlease.com ( The CLP Foundation needs donations
and volunteers, for sure. By the way, Andrew, I am told you may
take the test in San Diego,
whether you are registered for the conference
or not. I don’t think it is
a ultra-long drive from Apple Valley. Here’s your
chance. Editor ) Free CapitalStream Advantage Training October 5th,
San Diego, CA To All System 1 and CapitalStream Advantage Users Jim Buckles from Preferred Broker Solutions will be offering
a free training session on Document Processing with CapitalStream Advantage
at the upcoming, UAEL Annual Conference in San Diego. Topics covered will include form integration
and automation tips with MS Word, secure document delivery via WinFax
and Adobe Acrobat. This is a great training opportunity for you and your employees
and it is included in the conference fee. This session will be held, Saturday, October 5th, from
1:45pm – 3:30pm Conference dates are October 3rd - 6th
at the Sheraton Hotel and Marina in San Diego.
Contact Azin at the UAEL offices for registration (510) 444-9235
ex. 22. www.uael.org. --------------------------------------------------------------------------------------------- Rent-To-Own Bill Faces Uncertainty By JIM ABRAMS The Associated Press
WASHINGTON (AP) - A consumer signing a rent-to-own contract
for a new sofa or a big-screen TV would receive federal protections under
legislation that narrowly passed the House. But the bill, which requires disclosure of the cash price
and other costs and fees involved in rental purchases, faces an uncertain
future in the Senate. Consumer groups oppose it, saying Wednesday it doesn't
go far enough to protect lower-income families who turn to rent-to-own
companies because they don't have the credit or cash to purchase goods
outright. Rep. Walter Jones, R-N.C., the chief sponsor, said the legislation
advances consumer interests in an area that ``represents the largest category
of consumer transactions currently unregulated by the federal government.'' The measure passed 215-201, with much of the opposition coming
from Democrats who said it doesn't adequately shield poorer people from
exploitation. Forty-three Republicans also voted against it, some saying
the legislation infringed on states' rights. The rent-to-own industry fully backed the bill, with the
Association of Progressive Rental Organizations saying it had fought 17
years for responsible legislation. ``Unlike many industries, we have not
opposed reasonable regulations of this business and instead have consistently
lobbied to provide consumers with meaningful information,'' the association's
Executive Director Bill Keese said in a Web site statement. The industry says it now does some $5.3 billion in business
a year, with 3 million customers. Rent-to-own contracts allow the consumer
to rent an item while retaining the option to buying it at the end of
the rental period. Opponents said the bill was slanted toward the industry and
against consumers, particularly a part that overrides state laws that
define rent-to-own as credit sales subject to Truth in Lending Act disclosure
requirements on interest rates. It ``only serves to advance the special
interests of many of the economic scavengers in the rent-to-own industry,''
said Rep. Stephanie Tubbs Jones, D-Ohio. They argued that consumers in many cases end up paying four
or five times the store price for appliances and goods, equivalent to
three-digit interest rates. Four states - Wisconsin, Minnesota, New Jersey and Vermont
- classify rent-to-own deals as credit sales. But John D. Raffaelli, a spokesman for the industry group,
said it was misleading to categorize its business as credit sales, because
those signing leasing agreements paid no interest, accrued no debt and
could return the product at any time. He said the legislation helps consumers
by protecting opt-out rights and the acquisition rights of those who might
miss a payment. On the other side, Ed Mierzwinski of U.S. Public Interest
Research Group, which follows environmental and consumer issues, said
the bill was a ``Trojan horse'' aimed at the laws of the four states that
``subject the industry to usury ceilings, annual percentage rate disclosures
and other consumer protections.'' Rep. John LaFalce, D-N.Y., offered an amendment that would
have limited the total price of merchandise purchased through a rent-to-own
contract to two times its cash price, but it was defeated 232-184. LaFalce
and others argued that a TV with a store price of $200 might end up costing
$800 or more under a rent-to-own contract. The House also rejected an amendment by Rep. Maxine Waters,
D-Calif., that would have barred making consumers responsible for damage
or destruction to leased goods, except when the damage was deliberate. The bill is H.R. 1701. On the Net: Congress: http://thomas.loc.gov Association of Progressive Rental Organizations: http://www.apro-rto.com/ Consumer groups against the bill: http://www.pirg.org/consumer/renttoown/ Mortgage Rates fall to Lowest on Record This Period By Jeannine Aversa, Associated Press WASHINGTON (AP) Rates on 30-year mortgages dropped to a new
low this week, providing even more fuel for the mortgage refinancing boom.
In a nationwide survey released Thursday, Freddie Mac, the
mortgage company, reported that the average interest rate on a 30-year
fixed-rate mortgage fell to 6.05 percent this week, the lowest level in
32 years of record keeping. Last week, 30-year rates averaged 6.18 percent.
It's the fourth new low reached on 30-year mortgage rates
this year. Two weeks ago, rates on 30-year mortgages hit a low of 6.15
percent, surpassing the previous low of 6.22 percent set in mid-August.
That low had bested the prior low of 6.34 percent reached in late July.
Mortgage rates have been falling amid a spotty economic recovery
and a turbulent stock market that has sent investors to the bond market,
helping to push long-term rates down. ''Adding to the decline (in long-term
rates) was a flight to quality in the bond market from nervous investors
worried about falling stock prices and the possibility of war in the Middle
East,'' said Frank Nothaft, Freddie Mac's chief economist. Low mortgage rates are feeding a boom in mortgage refinancing.
Savings or extra cash coming out of refinancing deals is helping to support
consumer spending, including home buying, amid uncertain economic times
and eroding consumer confidence. ''The massive refinance wave that we have seen during the
last eight weeks is unprecedented and now surpasses the refinance wave
that we experienced last October and November,'' said Phil Colling, economist
with the Mortgage Bankers Association of America. Rates for 15-year fixed-rate mortgages, a popular option
or refinancing, fell to 5.47 percent this week, the lowest level since
Freddie Mac began tracking these rates in August of 1991. Last week, 15-year
mortgages averaged 5.59 percent. For one-year adjustable-rate mortgages, rates dipped to 4.28
percent, the lowest level since Feb. 25, 1994. Last week, rates for one-year
ARMS averaged 4.32 percent. This week's mortgage rates do not include add-on fees known
as points. Each loan type carried an average 0.7 point fee this week.
A year ago, 30-year mortgages averaged 6.80 percent, 15-year
mortgages were 6.30 percent and one-year ARMS stood at 5.58 percent. On the Net: ---------------------------------------------------------------------------------------------------- ############### ######################################### De Lage Landen Financial Services names Mark Guida VP-New
Business Development for Bank Outsourcing SBU; Richard
Knotts appointed Director WAYNE, Pa.– De Lage Landen Financial Services, a leading
international provider of high-quality asset-linked finance products to
manufacturers and distributors of capital goods, has named Mark Guida
as Vice President of New Business Development for its Bank Outsourcing
Strategic Business Unit. In a related move,
Richard H. Knotts, Jr. has been promoted to Director of New Business Development
for the SBU. He will report to Guida. In his new position,
Guida will be responsible for developing new commercial banking relationships
for the business unit, which represents 60 percent of the major banks
in the U.S. He will report
directly to Carlo van Kemenade, Vice President & General Manager of
the Bank Outsourcing SBU. Since joining
De Lage Landen in 1999, Guida has held a variety of positions in the company’s
Healthcare and Office Equipment SBUs, most recently serving as Director
of Strategic Initiatives for Bank Outsourcing. He has more than 20 years
of experience in the equipment finance/leasing industry. Guida is a graduate
of Pennsylvania State University with a B.A. degree in Marketing. Knotts is a nine-year
veteran of De Lage Landen and has worked in several sales areas, including
Major Accounts and New Business Development. Most recently, he served
as National Program Manager in the company’s Office Equipment SBU. He is a graduate
of the University of Delaware with a B.S. degree in Business Administration. De Lage Landen
Financial Services is part of De Lage Landen International B.V., an international
provider of high-quality asset-finance products. The company has offices
and joint ventures in 18 major countries throughout Europe, the Americas,
Australia and New Zealand. Specializing in
asset financing and vendor finance programs internationally and concentrating
domestically on a broad range of leasing and trade finance products, De
Lage Landen grew its net profit to €92.2 million (US $82.4 million) and
its balance sheet total to €11.7 billion (US$10.3 billion) in 2001. For more information,
visit our Web site at www.delagelanden.com. ### Sites of Reference: http://www.delagelanden.com CONTACT: Marc Donahue De Lage Landen Financial Services Phone Number: 610 386 5030 Fax Number: 610 386 5038 E-mail: mdonahue@leasedirect.com (Courtesy ELAonline.com) ############### ########################################## Ex-Wife Tries to Post Bail for Kozlowski By Jeanne King and Philip Klein Reuters NEW YORK L. Dennis Kozlowski, charged with looting $600 million
from Tyco International Inc. when chairman of the conglomerate, will not
face jail Thursday as his ex-wife agreed to post $10 million in bail for
him. But lead prosecutor John Moscow said the Manhattan District
Attorney's office would have to determine whether the money was gained
as part of the fraud Kozlowski was charged with last week, which led prosecutors
to freeze his assets. ''We need to speak to witnesses before making a determination
as to whether we will accept the funds,'' Moscow said at a hearing. Former Tyco chief financial officer, Mark Swartz, who was
also named in the indictment, posted his $5 million bail in the form of
500,000 shares of Tyco stock. Manhattan Supreme Court Judge Michael Obus set a hearing
date for next Friday to hear arguments from prosecutors about whether
either's funds are tainted. If the bail is not accepted by the judge next
week, Kozlowski and Swartz will face jail time at Riker's Island, one
of the nation's toughest prisons. Kozlowski's attorney, Stephen Kaufman, said his client's
former wife, Angela, agreed to post $10 million cash and a statement from
a brokerage firm backing up the source of the money. ''She is just supporting her ex-husband,'' Kaufman said.
( And seeking to have him be in the position to continue to pay alimony and protect
divided assets that may have been obtained illegally.) He said she was not sure whether the money came from assets
that may be part of the indictment. A third defendant, Mark Belnick, charged with falsifying
business records to cover up $14 million in improper loans from Tyco,
was released last week on an unsecured personal recognizance bond of $1
million. In addition to ruling on the bail issues next Friday, there
will be a hearing on Kozlowski's sales tax case. In June, he was indicted
for on charges of dodging $1 million in sales taxes from masters such
as Monet and Renoir. Also at the hearing, Moscow said his office would be ready
to go to trial next March or April on the larger fraud case, but Kaufman
said that was unrealistic because it was too soon. Kozlowski headed Tyco from 1992 until this June and became
one of America's most admired CEO's as he used hundreds of acquisitions
to build Tyco from a small security firm into a sprawling international
conglomerate that makes ADT burglar alarms and garbage bags, as well as
medical equipment and electronics. But the company sued him last week after an investigation
that mirrored probes by New York prosecutors and the Securities and Exchange
Commission. In addition to real estate, Kozlowski used Tyco money to
buy a $6,000 a shower curtain, a $15,000 dog umbrella stand, a $6,300
sewing basket and $445 for a pin cushion, the company said in a Tuesday
regulatory filing. Tyco is in the process of seizing most, if not all of Kozlowski's
assets, including a $17 million Fifth Avenue apartment, a $7 million Park
Avenue apartment he turned over to his ex-wife, a $5 million Nantucket
home and a $30 million compound in Boca Raton, Florida. A third defendant, Mark Belnick, charged with falsifying
business records to cover up $14 million in improper loans from Tyco,
was released last week on an unsecured personal recognizance bond of $1
million. -------------------------------------------------------------------------------------------------- Judge asks for better
accounting of GE chief's lifestyle By Associated Press BRIDGEPORT, Conn. (AP) A Superior Court judge handling former
General Electric Co. chairman Jack Welch's divorce on Thursday ordered
lawyers for Jane Beasley Welch to come up with a more accurate list of
the assets and costs associated with the couple's lavish lifestyle. Judge Julia Dewey told Mrs. Welch's attorneys that their
first attempt to put a price tag on the perks that come with being the
wife of GE's former chairman contained inappropriate ''editorial comment''
and estimates from outside experts. ''It's a brief, not just a financial statement, because there
are opinions in it,'' Dewey said. Jack Welch's attorney, Samuel Schoonmaker III, who filed
a motion to strike the claims made in Mrs. Welch's statement, said he
was satisfied with Dewey's ruling. ''It's a win,'' Schoonmaker said. ''Mrs. Welch sets forth
75 to 80 percent of her case in the financial affidavit. The (financial
affidavit) was never intended to be used that way.'' |
