Appeals court upholds Rigas family convictions

NEW YORK - A federal appeals court yesterday upheld the fraud conviction of Adelphia Communications Corp. founder John Rigas, who built one of the nation's largest cable-television companies and then looted it.

The U.S. Court of Appeals for the Second Circuit upheld the conviction of Rigas, 82, and his son, Timothy J. Rigas, 51, on 22 charges of securities fraud, conspiracy to commit bank fraud, and bank fraud. The court did reverse their conviction on one count.

Lawyers for the men had argued that fraud charges should be thrown out because accounting terms had not been explained to the jury.

"Defendants are wrong," the Manhattan appeals court wrote bluntly. It added that the government was not required to present expert testimony about accounting requirements, because the requirements are not essential to the securities fraud.

The prosecutor had no comment on the decision; lawyers for the Rigases did not return calls.

During the trial in 2004, the government said the Rigas family used Adelphia's business - then based in Coudersport, Pa. - as their personal piggy bank, stealing almost $100 million to splash themselves with personal luxuries, some big and some small.

The family was accused of ordering 17 company cars, and of buying 3,600 acres of timberland at a cost of $26 million to preserve the view outside the father's Pennsylvania home.

In its decision, the appeals court said the family actually took more than $200 million for personal expenses ranging from 100 pairs of bedroom slippers for Timothy Rigas to more than $3 million to produce a movie by John Rigas' daughter, Ellen, to $200 million to pay off Rigas family margin loans.

Prosecutors said John Rigas once spent $6,000 to fly two Christmas trees to New York for his daughter.

John and Timothy Rigas were convicted in July 2004 after a jury rejected their defense that they were properly following accounting rules when they engaged in transactions that the government said were fraudulent. As a result of the fraud, the company had to disclose a staggering $2.3 billion in off-balance-sheet debt that prosecutors said the Rigases had deliberately hidden.

John Rigas was sentenced to 15 years in prison, and Timothy Rigas, the company's former chief financial officer, was sentenced to 20 years.

Last year, another son, Michael Rigas, was sentenced to 10 months' home confinement after pleading guilty to a charge of making a false entry in a company record.

Adelphia was the country's fifth-largest cable-television company, with five million customers in 31 states, when it was based in Coudersport, near Erie. It filed for bankruptcy in 2002 after the company disclosed the $2.3 billion debt.

It later moved to Greenwood Village, Colo. Comcast Corp. in Philadelphia and Time Warner Cable, a unit of Time Warner Inc., have since bought Adelphia's cable assets.

The Pennsylvania cable-TV company collapsed in bankruptcy in 2002 after it disclosed $2.3 billion in debt not on the books.

John Rigas

Former position: Chief executive officer.

Current age: 82.

2004 conviction: Securities fraud, conspiracy to commit bank fraud, and bank fraud.

Sentence: 15 years in prison.

Timothy Rigas

Former position: Chief financial officer.

Current age: 51.

2004 conviction: Securities fraud, conspiracy to commit bank fraud, and bank fraud.

Sentence: 20 years in prison.

Michael Rigas

Former position: Executive vice president.

Current age: 53.

2006 conviction: Making a false entry in a company record.

Sentence: 10 months' home confinement.

SOURCES: Inquirer research

and wire services.

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