Adelphia Communications Corp. inflated its basic cable television subscribers by a total of 69,500 in 2000 and 2001, the company's former director of investor relations testified Thursday at the fraud trial of founder John Rigas.
Karen Chrosniak testified that she added the phony numbers to news releases authorized by Rigas, 79, and two of his sons, Michael, 50, and Timothy, 47, who are on trial with him. Prosecutors allege that the Rigases hid $2.3 billion in debt, stole $100 million and lied about revenue and operations, including the number of subscribers.
Chrosniak, 36, said the releases included 28,000 subscribers in Venezuela and 14,500 in Brazil that shouldn't have been included. She said that she knew it was wrong to add the Venezuela numbers in a November 2000 release and that she acted under orders from former finance chief Timothy Rigas.
"I did it because Tim Rigas told me to do it," Chrosniak told federal jurors in New York.
Chrosniak said she added other phony numbers at the behest of James Brown, a former finance vice president who pleaded guilty in November 2002 and is cooperating with U.S. authorities. Prosecutors agreed not to charge Chrosniak with a crime in return for her testimony.
Adelphia, the No. 5 U.S. cable-television operator, filed for bankruptcy protection in June 2002.
Chrosniak joined Adelphia in February 2000 after working as a certified public accountant for a decade. Her ex-husband, Tim Werth, Adelphia's former director of accounting, pleaded guilty to fraud in January 2003 and is cooperating with prosecutors.
Chrosniak said the Venezuelan and Brazilian subscribers were improperly reported because Adelphia held only minority interests in the companies that gave them service.
She said Adelphia also improperly added 27,000 high-speed Internet subscribers to its basic cable customer count of 5.6 million reported in a release Aug. 14, 2001.