Reuters reports former Tyco Int’l Ltd. director Frank Walsh pleaded guilty Dec. 17 to securities fraud charges and paid more than $22 million in fines and reparations in connection with Tyco’s purchase of The CIT Group Inc. in June 2001.
Walsh, who resigned from Tyco’s board earlier this year, pleaded guilty to charges that he failed to disclose to other board members that he would be paid a $20 million finder’s fee for Tyco’s $9.5 billion CIT acquisition. Tyco sold CIT earlier this year for about half that amount.
Walsh, who was the head of Tyco’s corporate governance committee, allegedly worked out the fee deal with former Tyco Chairman Dennis Kozlowski, according to the criminal complaint.
At an arraignment in Manhattan Supreme Court, Walsh said he received $10 million directly while $10 million was donated to the Community Foundation of New Jersey, a charity he recommended.
State Supreme Court Judge Michael Odus sentenced him to a conditional discharge, provided that he repay the $20 million to Tyco, pay $2.5 million in fines to New York City and state and another $250,000 in fines to prosecutors. He wrote the checks on the spot, according to Reuters.
