July 8 (Bloomberg) -- Tyco Electronics Corp. was sued by a former employee who claims he was fired for disclosing fraudulent accounting practices at the maker of electronic connectors.

Jeffrey Wiest, who worked in the company’s accounting office in Harrisburg, Pennsylvania, for 31 years, said Tyco began investigating him in September after he challenged “illegal attempts” to process payments for “extravagant parties,” according to the complaint filed yesterday in U.S. District Court in Philadelphia.

Wiest, 54, said that in mid-2007 he began questioning expenses that didn’t meet accounting standards, including the “legitimacy of a $350,000 event being held at the Atlantis Resort in the Bahamas.” The former account manager said he “was amazed that his supervisors authorized an island party with disturbing similarities to the past issues raised under Dennis Kozlowski.”

Tyco International Ltd. spun off Tyco Electronics in 2007. Both are based in Schaffhausen, Switzerland. Kozlowski, Tyco International’s former chief executive officer, was convicted in 2005 of securities fraud, grand larceny and falsifying business records.

Expenses for the Atlantis party included $3,000 for costumed mermaids and pirates, $2,350 for a tattoo artist and dancers, $2,500 for chair covers and sashes, and rooms at nightly rates ranging from $475 to more than $1,000, Wiest said in court papers.

‘Without Merit’

“Mr. Wiest’s claims of any inappropriate activity or accounting are completely without merit,” Martinique Woods, a spokeswoman for Tyco Electronics, said in an e-mailed statement. “Our company has reviewed all of the allegations raised by Mr. Wiest and concluded that our accounting was proper for this business event.”

In 2008, expenses for two other Tyco Electronics events were presented for payment without proper documentation, Wiest said. The first, at the Venetian Resort in Las Vegas, cost more than $218,000 and the second, at the Wintergreen Resort in Virginia, cost more than $355,000, he said.

Wiest also questioned the accounting treatment of activities including a “relatively lavish ‘holiday’ party held only for the headquarters staff” and expenses for an employee baby shower, court papers show.

Retaliation Alleged

“Tyco’s investigation and treatment of Wiest was in retaliation for his actions in insisting on adherence to accurate and lawful accounting practices,” according to the complaint. Wiest asked for a jury trial, reimbursement for medical expenses, and compensation for legal fees, pain and suffering.

Tyco Electronics executives named in the lawsuit include Chief Executive Officer Thomas Lynch, Chief Financial Officer Terrence Curtin, and Charles Dougherty, president of Tyco’s wireless systems unit. The company reported a net loss of $3.26 billion in the fiscal year ended in September on sales of $10.3 billion.

Tyco Electronics fell 48 cents, or 1.9 percent, to $24.85 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have climbed 49 percent in the past year.

The case is Wiest v. Lynch, 10-cv-03288, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

--With assistance from Phil Milford in Wilmington, Delaware. Editors: John Pickering, Stephen Farr.

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