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Judge Clears Way for Former Adelphia Execs to Stand Trial

Cable TV firm's founder and two of his sons fail to convince a court that their fraud indictment is legally inadequate.

August 12, 2003|From Bloomberg News

A U.S. judge Monday refused to throw out an indictment accusing Adelphia Communications Corp. founder John Rigas and two of his sons of defrauding the cable-television operator of at least $2.5 billion.

The ruling by U.S. District Judge Leonard Sand in New York cleared the way for the Rigases and another executive to stand trial in January on charges of conspiracy, securities fraud, wire fraud and bank fraud involving Adelphia, which is operating under bankruptcy protection.

Sand ruled that the Rigases failed to show that a 23-count indictment handed up in July 2002 was legally inadequate. He also ruled that John Rigas, the fired chief executive, and his son Michael Rigas, former executive vice president of operations, didn't deserve separate trials, which they had requested.

"Nothing in the indictment or the nature of this case suggests that a joint trial will be too complex, or that the jury will be incapable of distinguishing between individual members of the Rigas family for the purpose of considering the evidence against each defendant separately," Sand ruled.

Attorneys for Michael Rigas and Timothy Rigas, the former chief financial officer, didn't immediately return calls seeking comment. Lawyers for the other defendants, including the fourth executive charged, Michael Mulcahey, said they weren't surprised by the ruling.

Prosecutors allege that the Rigases plotted to conceal Adelphia's declining financial health in the three years before the company sought bankruptcy protection in June 2002. The indictment accuses the Rigases of using company funds to buy Adelphia stock and debt, and for other personal reasons.

Sand ruled Monday that he was not persuaded by the Rigases' argument that prosecutors improperly charged them in an indictment that wrapped multiple schemes into a single conspiracy count.

U.S. Bankruptcy Judge Robert Gerber in New York ruled on Aug. 1 that the Rigases could pay for their legal defense with $15 million in funds from cable companies controlled by the Rigases. The order covers the Rigases who were indicted, as well as a third Rigas son, James.

The Securities and Exchange Commission and Greenwood Village, Colo.-based Adelphia, which has $18 billion in debt, have sued those four Rigases, who also face dozens of shareholder lawsuits.

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