- The Washington Times - Tuesday, September 24, 2002

NEW YORK (AP) Adelphia Communications Corp. founder John J. Rigas, his sons and two other former executives were indicted yesterday on charges of stealing hundreds of millions of dollars from the nation's sixth-largest cable-television company.
The 24-count indictment, handed up in Manhattan federal court, charges the men with conspiracy, securities fraud and wire fraud, and seeks $2.5 billion in forfeited assets for suspected large-scale accounting fraud and corporate looting.
The court papers name Mr. Rigas; his sons, Timothy and Michael; James R. Brown, former vice president of finance; and Michael C. Mulcahey, former director of internal reporting.
The charges expand on a criminal complaint in July, adding new securities-fraud charges and conspiracy charges stemming from suspected false statements made in filings to the Securities and Exchange Commission.
Federal authorities earlier accused the Rigases of making the company into their "personal piggy bank."
Mr. Rigas, the 77-year-old founder, and his sons were arrested July 24 at their apartment on Manhattan's Upper East Side. An earlier criminal complaint charged them with fraud and hiding $2.3 billion in liabilities from investors.
The Rigases have been free on $10 million bail each, secured by cash, land and other property.
Mr. Rigas issued a statement yesterday insisting the transactions detailed in the indictment were perfectly legal.
"The corporate and personal reputation I have worked to build over the last 50 years has been irreparably damaged," Mr. Rigas said.
"My family and I have always acted with integrity and honesty and are committed to restoring our credibility and that of Adelphia."
Attorneys for all five former executives say their clients have committed no wrongdoing.
"Starting with nothing, John Rigas built a major American corporation, which has now suffered serious damage through these accusations and charges," said his attorney, Peter Fleming. "When the prosecution fails to prove its case, who will take responsibility?"
Adelphia, based in Coudersport, Pa., filed for Chapter 11 bankruptcy protection June 25. The Rigases stepped down from their board seats and executive posts at the company in May.
Federal prosecutors accuse the family of using $252 million in company money to pay margin calls, or demands for cash payments on loans for which they had put up Adelphia stock as collateral.
They also claim that Adelphia employees regularly performed work for other companies owned by Rigas family members, and that the companies' bills were regularly paid out of Adelphia bank accounts.
The federal complaint says the family's companies included the Buffalo Sabres pro hockey team, a furniture and interior-design company, a car dealership and a number of partnerships.
John Rigas, who was the company's chief executive officer and president, and his sons also have been named as defendants in more than 40 civil lawsuits, including one the company filed the day of their arrests.
The company lawsuit, filed in U.S. Bankruptcy Court in New York, accuses the Rigases of conspiring to use company funds for their own benefit.
The lawsuit says that off-the-books transactions and self-dealing by the Rigas family resulted in damages and loss in market capitalization of more than $1 billion, for which the company is seeking triple damages.


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