Greed on Wall Street

Nov. 11, 2005 — -- This fall's art season brought a gathering of multimillionaires to New York's famed auction houses, where connoisseurs competed for the latest must-have works of art.

"It's a big night for money," the actor Steve Martin said as he mixed into the crowd heading into Christie's at Rockefeller Center for the evening's auction of postwar and contemporary art.

The bidding was fast and furious, with works by Warhol, DeKooning and Lichtenstein changing hands for tens of millions of dollars.

"It's amazing. It's like grand opera. You have egos fighting other egos," said Brett Gorvy, international co-head of the Post-War and Contemporary Art Collection for Christie's in New York.

The night's star was Homage to Matisse by Mark Rothko, which set a new record when it sold for $22.4 million.

Yet, while the auction houses filled with collectors, the face of one multimillionaire art aficionado was missing from the scene. His name is Dennis Kozlowski, and his attempts to become part of the world of wealth and prestige led to his downfall.

Today Kozlowski, the former chief of Tyco, is known as New York State inmate #05A4820.

"Greed is one of the seven deadly sins," reminds author Tom Wolfe, whose novel "Bonfire of the Vanities" profiled the men who considered themselves "Masters of the Universe."

"If you feel you are a master of the universe, then a lot of rules just don't apply," he says.

That appears to have been the mindset of Kozlowski. Earlier this year, he was convicted of stealing hundreds of millions of dollars from the company he ran to finance a worldwide spending spree.

"The airplanes, the cars, the courtiers, the chefs, it really was something that you would have expected to see at Louis XIV's court at Versailles," described author James Stewart, a contributor to the New Yorker, who chronicled Kozlowski's rise and fall in the world of the rich and the greedy.

Kozlowski wanted to be a part of that exclusive world. Indeed, he "felt he needed to be a part of it in order to take his place among the ranks of the corporate chieftains that he thought he deserved to be compared to," Stewart explained.

As the head of Tyco International, Kozlowski became known as the country's most aggressive CEO as he made millions for himself and the company.

"He was entitled to draw a very large salary legitimately, and yet he still decided well, that was not enough," Stewart continued. "He first began cutting corners and then cutting more than corners, and then just going full tilt into pretty much whatever he could get his hands on to the tune of millions and millions and millions of dollars."

Kozlowski's downfall began with art, in particular his failure to pay the New York State sales tax on several multimillion-dollar paintings.

"If we had not asked the question, what about the taxes, that would have ended the investigation," John Moscow, the assistant district attorney who discovered Kozlowski's failure to pay the sales tax, recounted.

"If you can afford the paintings, you should be able to afford the tax," he said of the taxes, which totaled more than $1 million.

Moscow's investigation slowly began to reveal how Kozlowski, the son of a New Jersey policeman, came to afford his grand lifestyle.

He kept homes in Nantucket and Boca Raton, Fla., in addition to his lavishly decorated Fifth Avenue apartment in Manhattan containing a $6,000 shower curtain, a $15,000 umbrella stand and almost half a million dollars in draperies and 17th-century antiques, all of which were bought with company money.

He also bought the famed sailing yacht Endeavor with his own money and hired a full-time crew of nine to help maintain it.

"Baby, if you've got it, flaunt it," said Wolfe.

"I think people in many cases are dying to flaunt it. If you're 59 and you've made a fortune, and you're still not attractive to women because you can't explain to them what you do, and you can't go around the beach with a sign hanging around your neck saying 'Financial Giant,' you have to call attention to yourself," Wolfe said.

And Kozlowski did. To celebrate his second wife's 40th birthday, Kozlowski rented a five-star resort on the Italian island of Sardinia. On a videotape of the party, later played at his criminal trial, waiters in togas greeted guests while Jimmy Buffett and a band flown in from Nantucket serenaded them. A life-size cake in the image of his wife had breasts made of icing that later exploded. Vodka was served out of an ice sculpture of Michelangelo's David.

"He was nouveau riche. No question about it. Old money would not be throwing that kind of party in Sardinia," New Yorker contributor Stewart said.

"That was a dreadful waste of money," assistant district attorney Moscow agreed. "He certainly was willing to spend other people's money at an incredible rate for himself -- we call that stealing."

The affair of Kozlowski capped an era of unchecked greed in corporate America that began in the 1980s and was celebrated in the famed movie "Wall Street." Since then, the country has watched several multimillionaires, from Bernard Ebbers and Scott Sullivan of MCI WorldCom to Kenneth Lay of Enron, be asked to explain their avaricious behavior.

ABC News' Jill Rackmill contributed to this report.