"The evidence amply supports the conclusion that defendants took unauthorized bonuses from Tyco in 1999 and 2000," the appeals panel wrote in a 4-0 decision.
Kozlowski, 60, and Swartz, 47, were each sentenced to 8-1/3 to 25 years in prison after being convicted of conspiracy, grand larceny, securities fraud and falsifying business records. Prosecutors say the two amassed $170 million in unauthorized compensation and $430 million through stock manipulation.
The men used the money to finance lavish lifestyles that, in Kozlowski's case, included a $6,000 gold-threaded shower curtain and a $15,000 umbrella stand shaped like a small terrier, according to the prosecution.
Last month, defense lawyers argued before the appellate judges that neither man had taken money _ including bonuses and forgiven loans, money for investments, expensive real estate and personal luxuries _ that he was not due.
During the trial, Kozlowski and Swartz argued that one member of the company's compensation committee had approved some of the bonuses.
But the judges cited testimony showing that all but one compensation committee member had no knowledge of the bonus payments, and that even the defense agreed that only the whole committee had the authority to grant compensation.
The court also noted there was no written record of the payouts in the materials prepared for the compensation committee, and none in the committee's reports to the board.
"The absence of any reference to these transactions in the chain of documentation available to the committee clearly demonstrates defendants' coverup of their thievery," the appellate judges wrote.
