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Jury Selection Starts in Rigas Trial

The founder of Adelphia Communications is facing wire, securities and bank fraud and conspiracy charges.

February 24, 2004|From Reuters

NEW YORK — Jury selection began Monday in the trial of former Adelphia Communications Corp. Chief Executive John Rigas on charges of looting millions of dollars from the cable company he founded.

Rigas and sons Michael and Timothy, who served as top executives of the company, each face a minimum of 15 to 20 years in prison if convicted on two dozen counts of securities, wire and bank fraud and conspiracy, according to prosecutors. Also on trial in Manhattan is Michael Mulcahey, former director of internal reporting for Adelphia.

The Rigases are accused of using millions in company funds to cover margin calls on Adelphia stock and for personal extravagances such as a golf course, professional hockey team and personal travel on the company jet.

The family denies the charges, arguing the loans were legitimate and were taken out on the recommendations of their auditor and investment bankers.

The questioning of potential jurors is expected to last a week. Opening arguments in the case are scheduled for March 1 in a trial that is expected to last three months.

In its initial questioning, the Rigas legal team sought to eliminate potential jurors with ties to Wall Street or to any of the financial institutions that took losses as a result of the Adelphia bankruptcy filing.

Both sides eliminated jurors they believed would have trouble understanding evidence in what U.S. District Judge Leonard Sand said would be a "document case."

The Rigases resigned from the company in 2002 after their auditor, Deloitte & Touche, refused to sign off on the company's annual report, prompting creditors to call in about $6 billion of loans.

The company filed for bankruptcy protection in June 2002 after defaulting on billions of dollars in debt. It is being reorganized under new management, which is considering changing its name to separate it from the scandals.

Rigas, a cable television pioneer, founded his company in 1952 after paying $300 for a license to wire Coudersport, Pa., for cable television.

From that franchise Rigas acquired others, slowly building the company into one of the nation's largest and taking it public in 1986.

As part of the restructuring, Adelphia's headquarters were moved to Denver, but it still employs about 1,600 people in Coudersport.

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