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Dennis Kozlowski, 55, who has stepped down as chief executive of Tyco, is alleged to have evaded paying just over $1m in New York State sales tax by claiming that the deals on at least six paintings were completed in New Hampshire, which has no sales tax.

He is alleged to have involved employees at Tyco’s New Hampshire headquarters as well as unnamed galleries and art consultants in London and New York.

Paperwork is said to have been forged showing works of art being shipped to Mr Kozlowski’s New Hampshire home when in fact they were immediately sent to his Fifth Avenue, New York apartment.

The Attorney General’s office said that the investigation involves a number of other art collectors and dealers.