NEW YORK (Reuters) - A New York judge ruled yesterday the criminal case against Bermuda-based Tyco International Ltd.'s former chairman, Dennis Kozlowski, could proceed and scheduled the trial to begin in late September.

Ruling against a defence motion to have the case dismissed, state Supreme Court Justice Michael Obus said there was enough evidence to support the grand jury's indictment of Kozlowski and former Tyco finance chief Mark Swartz.

Kozlowski and Swartz face criminal charges accusing them of defrauding Tyco of more than $600 million through unauthorised compensation and fraudulent stock sales. Both have pleaded not guilty to the charges. Kozlowski faces up to 30 years in prison if convicted.

"There is sufficient evidence that the defendants took money from Tyco that they were simply not permitted to. Whether that is true or not ... will be decided at trial," the judge said, reading his decision from the bench.

Obus also denied a defence motion to postpone the September 29 trial date.

The next hearing in the case is scheduled for July 10 to deal with the mechanics of the trial.

Outside the courtroom, Swartz's lawyer, Charles Stillman, said he was preparing for trial.

"The die is cast. We are going to return to prepare the case for trial."

"Just be here when the jury finds our way," he added.

Kozlowski, who is free on $10 million bail posted by his ex-wife, declined to comment on the case to reporters after the hearing.

The assets of Kozlowski and Swartz have been frozen since their arrest last year.

Kozlowski, who resigned a year ago, used scores of acquisitions as Tyco's top executive to build the company into an international conglomerate that made everything from ADT burglar alarms to trash bags, medical equipment and electronics.

But Tyco has been forced to disclose $2 billion of accounting-related problems, come under investigation by securities regulators and been named in a rash of lawsuits by shareholders who allege that fraud cost them their investments.

In a separate case, federal tax evasion charges against Swartz were dismissed, his lawyer said yesterday.

A grand jury in New Hampshire had indicted him and accused him of filing a tax return that failed to report a $12.5 million Tyco bonus he received in 1999. The trial was to have started in July.