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U.S. Underscores 'Greed, Betrayal' of Adelphia Ex-Execs

June 17, 2004|Thomas S. Mulligan | Times Staff Writer

NEW YORK — Adelphia Communications Corp. became "one family's personal piggy bank" as founder John Rigas, two of his sons and a fourth executive looted the cable TV company and drove it into bankruptcy, a federal prosecutor said Wednesday.

Assistant U.S. Atty. Christopher J. Clark began his closing argument in the 3 1/2-month Adelphia trial with a litany of personal perks that the defendants allegedly showered on themselves with company funds. Included on the list: a $25-million swath of timberland to protect the view from Rigas' house, a $13-million golf course, 17 cars and hundreds of millions of dollars of company stock and bonds.

"This is a case about greed, betrayal of trust and lies," Clark told the jury of nine women and three men in U.S. District Court in Lower Manhattan.

The defendants tried to cover up their looting by spinning "a huge web of lies" about the company's financial health in statements to banks and in public filings with the Securities and Exchange Commission, Clark said.

Adelphia went public in 1986, yet Rigas continued to treat it as his private fiefdom, Clark said. Rigas took cash advances from the company of as much as $1 million a month without any documentation or promise of repayment, the prosecutor said.

"John Rigas didn't sign a cocktail napkin" to memorialize what purportedly were loans, Clark said.

Several times during his two hours of argument, Clark walked around the courtroom and punctuated his remarks by pointing at the defendants.

Shareholders "lost just about everything" in the 2002 collapse of what was then the nation's fifth-largest cable TV company, Clark said, adding that the bankruptcy cost some investors their life savings.

The defendants have denied intending to defraud anyone and have maintained that their transactions were legitimate and properly disclosed.

Accused in the case, besides John Rigas, 79, are Timothy J. Rigas, 48, former Adelphia chief financial officer; Michael J. Rigas, 50, former executive vice president; and Michael C. Mulcahey, 46, former director of internal financial reporting.

Together, the four men are charged with 24 counts of conspiracy, securities fraud, bank fraud and wire fraud. If convicted, each would face 15 to 30 years in prison.

Mulcahey was the lone defendant to take the stand, concluding his seven days of testimony Wednesday morning.

The Rigases presented minimal defenses, apparently betting that the jurors would believe that the government had failed to prove its case.

John Rigas founded the company that became Adelphia in 1952 in tiny Coudersport, Pa., where it grew to become the rural county's largest employer. After the June 2002 bankruptcy filing, Adelphia moved its headquarters to Colorado and is now seeking a buyer.

Clark is expected to conclude his closing argument today. A lawyer for each defendant will follow with closing arguments that are expected to last into next week. The jury could begin deliberations as early as next week.

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