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Rigases' Fraud Trial Comes to a Close

6/27/2004 8:00 PM Eastern

Defense attorneys pulled out all the stops in their closing arguments in the federal fraud trial of four former Adelphia Communications Corp. executives here, evoking Shakespeare, Socrates and even the Titanic as they tried to sway the jury to acquit their clients.

Now the fate of the four men lies in the hands of the jury of eight women and four men, who are faced with the task of sifting through thousands of pages of evidence and trial transcripts in coming up with a verdict.

U.S. District Court Judge Leonard Sand began giving his instructions to the jury on June 24, in painstaking detail. At press time, it was expected that the jury could begin deliberations late Friday (June 25).

Former Adelphia chairman John Rigas; his sons, former chief financial officer Timothy Rigas and former executive vice president of operations Michael Rigas; and former assistant treasurer Michael Mulcahey are accused of 24 counts of fraud and conspiracy. All four men have pleaded not guilty.

For their parts, attorneys for both sides tried to keep their closing statements simple. The defense concentrated on discrediting the government's star witness in the case — former Adelphia vice president of finance James Brown — and trying to win some sympathy for the defendants by mentioning their charitable and philanthropic deeds. The prosecution, in both its closing statement and rebuttal, also tried to keep it simple.

“The issues before you, the jury, are not issues of emotion or sympathy,” Assistant U.S. Attorney Richard Owens said in his rebuttal statement. “They are issues simply of the facts.”

That evidence is lengthy and complicated. Over the course of nearly four months — the trial began on March 1 — prosecutors painted a picture of out of control greed by the Rigases, who they claim stole millions of dollars from the company for personal use and used $2.8 billion in loans that Adelphia was liable for to buy company stock, build a golf course and purchase cable systems.

Early in the trial, prosecutors presented a litany of documents that showed the Rigases gained control of those funds through a series of complicated co-borrowing arrangements and family owned partnerships.

PETTY GREED SEEN

But what may have hit closer to home with the jurors were the examples of the petty greed by the Rigas family. Prosecutors alleged that John Rigas regularly tapped the company coffers to pay for buttons for his high-school reunion ($76), and for a personal masseuse ($40,000).

Tim Rigas was accused of using company funds to pay for golf club memberships and condominiums, as well as billing the company for 100 pairs of slippers ($268) for guests at the Adelphia-owned condominium in Beaver Creek, Colo.

Owens, in his rebuttal statement, tried to boil down the facts of the case even further.

“The Rigases took money they were not entitled to and didn't disclose it to people who had the right to know,” Owens said. “If you use your common sense, you can see through all of that to the truth. These men, regardless of whether they are charitable men or whether they are kind men, committed the crimes they are alleged. They are guilty of these crimes and they should be held accountable.”

In the defense's closing arguments, attorneys focused on Brown, who they described as a “master of deception,” a “frightening genius” and “a liar.” They also hammered home the fact that Brown, who had pleaded guilty to three counts of conspiracy and fraud in November 2002, is hoping that his testimony will result in a lighter sentence.

Owens said in his closing that while Brown's testimony was highly credible, the jury need only look at the documents to find the Rigases and Mulcahey guilty.

Owens pointed to one document in particular — a certification document signed by Michael Rigas — that misrepresented the leverage ratio Adelphia needed to be in compliance with its bond agreements.

“This document shows securities fraud, plain and simple,” Owens said. “You don't have to believe a word Jim Brown told you — but you should, for reasons I will come back to — to reach the conclusion beyond all doubt, not just a reasonable doubt, that when Michael Rigas signed this, he intended to fool people.”

SURPRISING POWER

Surprisingly, one of the most powerful closing statements came from Mulcahey's lawyer Mark Mahoney.

Mahoney, a Buffalo, N.Y., criminal defense lawyer who has little experience in business fraud cases, seemed to stumble several times during the early course of the trial. He even admitted so during his closing statement, telling the jury, “I have my weaknesses as an advocate, as well-displayed for everybody in this courtroom.”

But it was Mahoney who seemed to elicit the biggest emotional response in the courtroom, likening the prosecution of his client to “Rigas-cide,” adding that Mulcahey refused to participate in accusing the Rigases because they did nothing wrong.

“In business, John Rigas was a king,” Mahoney said. “His sons were the princes. When the time came for blaming, all the fingers pointed at them and they were overthrown. It wasn't regicide, it was Rigas-cide.

“And with them went Mike Mulcahey, one of the household staff who refused to join the mob pointing the fingers.”

'OK TO PAY'

Mulcahey, nicknamed Mike “OK to Pay” Mulcahey by the prosecution, was accused of signing off on many of the allegedly fraudulent documents that allowed the Rigases to borrow money at Adelphia's expense.

Peppering his summation with references to Shakespeare's Julius Caesar and Greek philosopher Socrates, Mahoney at times laid it on a little thick, likening the atmosphere at Adelphia after the accounting scandal broke in March 2002 to “a tide of fear and very complicated motivations.” Pulling that tide, he said, was the government's zeal to prosecute the Rigases.

Owens, in his closing, referenced Mahoney's statements.

“There may be tides rolling in and out, who knows from what direction, but they're not strong enough to erase the evidence,” Owens said.

Mahoney also compared Adelphia to the Titanic, and argued that it was the people at the helm — Brown and former director of finance Dean Marshall — who should be charged with turning the ship away from the iceberg, not those “down in the engine room,” like Mulcahey.

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