John Rigas gets 15 years, son 20

Adelphia cable executives guilty of fraud, conspiracy

'A tragedy lacking in heroes'

June 21, 2005|By Patricia Hurtado | Patricia Hurtado,NEWSDAY

NEW YORK - Adelphia Communications Corp. founder John Rigas was sentenced yesterday to 15 years in prison and his son, Timothy, the firm's chief financial officer, was sentenced to a 20-year term for what the sentencing judge called "one of the largest frauds in corporate history," stealing some $100 million from the company for their personal use and deceiving investors.

U.S. District Judge Leonard Sand noted that both men could have faced life in prison under federal sentencing guidelines, but said John Rigas' age and ill health warranted a lesser term. Rigas is 80 and has been diagnosed with bladder cancer.

"This is a man who long ago set Adelphia on a track of lying, of cheating, of defrauding. Regrettably, for everyone, this was not stopped over 10 years ago but continued," Sand said in sentencing the elder Rigas. "It got more brazen, and culminated in one of the largest frauds in corporate history. Were it not for your age and health, I would impose a sentence far greater."

Sand said he would consider modifying the sentence and grant Rigas an early release if he serves at least two years and if doctors determine he has less than three months to live.

"This is a tragedy lacking in heroes," the judge said.

At the most dramatic moment of the hearing, which stretched nearly three hours, John Rigas slowly rose from his chair just before being sentenced, shuffled to a lectern and addressed the judge, speaking slowly and softly.

In his rambling speech, he grew teary when he mentioned his grandchildren, quoted from "The Star-Spangled Banner" and his late mother, and cited his commitment to building Adelphia into the nation's sixth-largest cable company.

"In my heart and in my conscience, I'll go to my grave really and truly believing that I did nothing but try to improve the conditions of my employees," he said.

He said repeatedly he had led a blessed life, and even thanked members of the military "that fought for America and gave their lives because they believed in America and what it stood for."

"If I did anything wrong, I apologize," he said.

During the hearing, lawyers for both men attempted to distance their clients' conduct from that in such corporate scandals as WorldCom and Enron.

At one point, John Rigas' lawyer, Peter Fleming, tried to convince Sand that his client believed deeply in philanthropy, loved the town of Coudersport, Pa., and was "obviously scared to death of prison."

The judge interjected: "Do you see what he did? What he did to Coudersport, what he did with assets and by means which were not appropriately his? To be a great philanthropist with other people's money really is not very persuasive."

Timothy Rigas, 49, denied any wrongdoing, insisting that his family followed the advice of company advisers. "Our intentions were good, the results were not so; as a result, we ask the court's understanding," he said.

But Sand replied tartly, "The jury found that your intentions were to defraud, and I can't ignore that."

John Rigas founded Adelphia in 1952 in Coudersport with a $300 investment, and turned the company into a cable behemoth. But the company collapsed in bankruptcy in 2002 after it disclosed nearly $2.5 billion in debt.

During the trial, Assistant U.S. Attorneys Richard Owens and Christopher Clark charged that the Rigases looted corporate accounts, built themselves a private golf course and traveled on safaris and other trips on corporate jets while misleading investors.

The prosecutors also said John Rigas had ordered two Christmas trees flown to New York for his daughter at a cost of $6,000, ordered as many as 17 company cars and had the company buy 3,600 acres of timberland - for $26 million - to preserve the view outside his Pennsylvania home.

The government won guilty verdicts last July on bank and securities fraud and conspiracy charges.

Sand declined to force the Rigases to pay restitution, noting that the family has already agreed to forfeit more than $1.5 billion to settle regulatory charges.

The judge ordered both men to surrender Sept. 19 to begin their prison terms, but lawyers told the judge they planned to file motions for their clients to stay out of prison pending appeal.

Newsday is a Tribune Publishing newspaper. The Associated Press contributed to this article.

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