<Snipped from the NY Times> June 20, 2005
Founder of Adelphia Is Sentenced to 15 Years in Prison
By ROBEN FARZAD
John J. Rigas, who built the Adelphia
Communications Corporation into the country's sixth-largest cable company,
was sentenced to 15 years of prison today for looting hundreds of millions
of dollars from the company's coffers and concealing its true debt load from
investors.
"Even to this moment, you say you did nothing wrong," Judge Leonard B. Sand
said in Federal District Court in Manhattan. "That's what is unacceptable."
Addressing Mr. Rigas's lawyers, he said: "If your effort is at this point to
convince me that there was not blatant fraud, you're going to have a very
hard sell."
Mr. Rigas, 80, spoke in hoarsely and hunched over as he pleaded for leniency
before his sentencing. "To my stockholders, I apologize. This whole thing
has happened to all of us," he said. "There are many things that I wish I
had done differently."
Should Mr. Rigas become terminally ill in the next two years, the sentence
may be revised, the judge said.
His son, Timothy J. Rigas, 49, Adelphia's former chief financial officer,
awaited sentencing later in the afternoon.
Each faced up to three decades in prison just for bank fraud, the most
serious in a list of convictions that also included securities fraud and
conspiracy. Federal prosecutors had asked Judge Sand to hand down a sentence
of 215 years, which they said was justified in light of how the Rigases used
Adelphia as a personal slush fund for everything from margin loans to real
estate deals to cash advances for other non-corporate outlays.
Adelphia was forced into bankruptcy three years ago when these dealings and
other off-balance sheet obligations came to light. It has since sold itself
to Time Warner and Comcast
<
http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.m
arketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=CMCSA> , the two
largest cable television company in the country.
"In terms of harm caused," argued prosecutors, according to court papers,
"the defendants' criminal conduct, motivated by greed and the desire to
retain their power and control over Adelphia, stands among the most serious
economic crimes."
The Rigas defense team pleaded for leniency, citing the family's community
activism and philanthropy in Adelphia's former rural Pennsylvania
headquarters, as well as John Rigas's delicate health. As he suffers from
bladder cancer and a heart condition, the elder Rigas's lawyers were seeking
home detention or probation. Timothy Rigas's defense attorneys, meanwhile,
petitioned for a maximum sentence of six months.
The Rigas verdict, reached last July, represented a key victory for federal
prosecutors who were under pressure to respond to a wave of malfeasance that
seemed to overtake corporate America in the wake of Enron's
<
http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.m
arketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=ENRNQ> collapse
in 2001.
Like the two top officers of Tyco
<
http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.m
arketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=TYC> , who were
found guilty of similar fraud just last week, the Rigases became emblematic
of executive commingling of personal interests and financial gain with the
interests of the company. During trial, the government illustrated what it
argued was a deliberately confusing cash-management system that the Rigas
family employed to disperse $2.3 billion in Adelphia funds for their own
purposes.
Prosecutors further drove home that portrayal by detailing a laundry list of
luxury purchases that they said the Rigases financed with those proceeds,
including the air-shipment of Christmas trees, 17 company cars and $26
million worth of timberland that the elder Rigas acquired adjacent to his
home in Coudersport, the tiny town in north central Pennsylvania that was
Adelphia's headquarters until it sought bankruptcy protection.
Sentencing had been delayed repeatedly, owing mainly to the finalization of
negotiations with Adelphia investors who were seeking restitution after
losing money in the company's collapse. In April, Adelphia agreed to
contribute $715 million to a government fund to compensate investors, one of
the largest such settlements to date. The deal involved the Rigases'
forfeiting $1.5 billion in assets to Adelphia.
One of John Rigas's other sons, Michael, a former executive vice president,
was acquitted of conspiracy and wire fraud charges, but faces a second trial
in October for securities and bank fraud counts. Michael C. Mulcahey,
Adelphia's former director of internal reporting, was tried and acquitted of
all charges he faced.
Zoots Alures -
Minds are like parachutes. They don't work if they ain't open {Fz}
