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Witness Tells of Adelphia Paying Rigases' Golf Fees

The accounts payable manager testifies about payments made for the founder and his sons' personal expenses.

March 18, 2004|From Bloomberg News

Adelphia Communications Corp. paid $3,000 in "beauty" costs for founder John Rigas and $700,000 for his son, Timothy, to join an exclusive golf club in South Carolina, a company employee told jurors Wednesday.

Accounts payable manager Linda Pekarski said Adelphia also made payments on Rigas expenses for antiques, mortgages, estate planning, bedroom slippers and personal credit cards. Prosecutors accuse John Rigas, 79, and two of his sons, Michael, 50, and Timothy, 47, of looting the No. 5 cable television operator and engaging in accounting fraud.

Adelphia paid $537,275 to an antique dealer and $279,583 to an interior design company owned by John Rigas' wife, Doris, Pekarski said. Adelphia also paid John Rigas' personal credit card bills, which included expenses of $3,000 for "beauty consulting" at the Belavi Institute, then in Laguna Beach, and $22.24 for a compact disc, Hit Parade 1942, Pekarski said.

Prosecutors allege that the Rigases concealed billions of dollars of debt before Adelphia's bankruptcy filing in June 2002, stole $100 million and lied about company finances and operations. The Rigases used Adelphia as a "private piggy bank" to pay for personal expenses, including $52 million in cash advances and $13 million to build a golf course, prosecutors allege.

Pekarski, testifying for a second day, said she had reviewed dozens of expenses authorized by John or Timothy Rigas in recent years. They included payment of $70,455 to Adelphia's former auditors, Deloitte & Touche, for estate planning for John Rigas.

Adelphia also paid $700,000 for Timothy Rigas to the Golf Club at Briar's Creek on Johns Island, S.C., rated America's best new private golf course of 2002 by Golf Digest.

Over several years, Adelphia paid $124,576 to Colleton River Plantation, a golf course on Hilton Head Island, S.C., where Timothy and John Rigas belonged, Pekarski said. The semiannual dues were $4,125 for each Rigas, she said.

Adelphia also covered annual dues for Timothy Rigas at Bartlett Country Club in Olean, N.Y., Pekarski said.

From 1998 to April 2002, the company paid for three condominiums in the Beaver Creek resort in Colorado, including construction costs of $1.15 million and mortgage payments of $705,866 on the unit owned by Timothy Rigas, she said. The company also paid the property taxes and cleaning costs for all three units, she said.

The company, now in Greenwood Village, Colo., but formerly based in Coudersport, Pa., made monthly payments on three Manhattan condominiums at 330 E. 75th St., including one where John Rigas' daughter, Ellen, lived. Adelphia paid $3,475 a month on her lease and maintenance fees of $683, Pekarski said.

Adelphia also paid $537,275 to Morgart's Trash & Treasures, an antique dealer in Coudersport, she said. Doris Rigas requested one payment for $53,000, Pekarski said.

Adelphia also paid school donations authorized by the Rigases, Pekarski said. Prosecutors showed jurors an unsigned letter from Michael Rigas, on Adelphia letterhead paper, that committed $1 million to a theater named after the Rigases at St. Bonaventure University in St. Bonaventure, N.Y. Adelphia wrote at least $200,000 in checks to the school, according to evidence introduced Wednesday.

Pekarski said that some of the payments were noted in company records as receivables owed by John Rigas or private businesses owned by the family. Peter Fleming, an attorney for John Rigas, has argued that his client intended to repay money borrowed from the company. Defense attorneys also have said golf expenses were an appropriate business cost.

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