NEW YORK Former chiefs at Tyco, Rite Aid on trial in Wall Street scandals

NEW YORK (AP) -- Two of the first cases from the long procession of Wall Street scandals that brought images of executives in handcuffs are on the docket in two Manhattan courtrooms.
Dennis Kozlowski, the former CEO accused of looting conglomerate Tyco International Ltd. of $600 million, and Frank Quattrone, a dot-com-era banker accused of ordering important documents destroyed, were set to go on trial today in separate courts.
Kozlowski and former Tyco financial chief Mark Swartz, who is being tried with him in state Supreme Court, are accused of turning the conglomerate into their personal piggy bank.
Reports after Kozlowski was charged last September showed he spent company money at will on high art and furniture -- from a $6,000 shower curtain to a $15,000 antique umbrella stand.
In one well-known episode, Tyco picked up half the tab for a $2 million birthday party for Kozlowski's wife in Italy that featured musician Jimmy Buffett and an ice sculpture of Michelangelo's David.
Besides lavish salaries and perks, Kozlowski and Swartz arranged to be paid $84 million in unauthorized bonuses, Manhattan prosecutors say.
Their defense
Both men have pleaded innocent. The pair are expected to argue that the millions they are accused of stealing were actually loans and bonuses approved by the board and disclosed to outside auditors.
Their lawyers will try to convince a jury that the board knew about the compensation, and that Kozlowski worked hard to improve Tyco and deserved the pay, said Robert D. Zatorski, a former New Jersey white-collar crime prosecutor.
Kozlowski, 56, and Swartz, 43, could each get 30 years in jail if convicted on grand larceny and other lesser counts.
Quattrone, an influential investment banker at Credit Suisse First Boston during the 1990s, was paid tens of millions of dollars a year to help take technology companies public.
He is accused of encouraging CSFB employees to get rid of documents that were being sought by a grand jury and regulators looking into how CSFB doled out shares of initial public offerings.
The government says Quattrone deliberately obstructed justice Dec. 5, 2000, when he distributed an e-mail proposed by one of his subordinates that urged workers to "catch up on file cleaning before the holidays."
Prosecutors' job
Quattrone attached his own note at the top: "I strongly advise you to follow these procedures."
The trick for prosecutors will be proving criminal intent. Quattrone insists he did not know the documents were being sought by investigators, and that he was following CSFB policy on getting rid of old files.
To win their case, prosecutors must portray Quattrone as a man who was arrogant, under incredible stress and defiant of government investigators, said Christopher J. Bebel, a former federal prosecutor.
Quattrone, 47, has pleaded innocent. He faces 25 years in prison if convicted on all counts -- two of obstruction, one of witness tampering -- but would likely get far less under federal sentencing guidelines.
In Harrisburg, former Rite Aid Corp. executive Franklin C. Brown was scheduled to face trial today on federal criminal charges of fraud and conspiracy.
The former general counsel and vice chairman is accused of conspiring to inflate the company's financial statements during the late 1990s, a period when the company's stock soared.
In 2000, the company restated its net earnings downward by $1.6 billion. Several other former Rite Aid top managers have pleaded guilty to criminal charges.