Former Adelphia Communications Corp. vice president of finance Jim Brown continued to provide damaging testimony against his former bosses.
Former Adelphia chairman John Rigas, his sons -- former chief financial officer Timothy Rigas and former executive VP of operations Michael Rigas -- and former director of internal reporting Michael Mulcahey are on trial for 24 counts of conspiracy, wire fraud, bank fraud and securities fraud. All four men have pleaded not guilty.
Brown pleaded guilty to conspiracy, securities fraud and wire fraud in November 2002.
Brown testified Thursday that he and Tim Rigas made moves to prevent the MSO’s auditors -- Deloitte & Touche LLC -- from disclosing the amount of loans made to the Rigas family that Adelphia could be liable for. It was the ultimate disclosure of those loans -- totaling $2.8 billion -- in March 2002 that led to Adelphia’s downfall.
Brown said Wednesday that during that March 2002 conference call, he and Tim Rigas lied to analysts concerning the Rigas family’s ability to repay the debt.
Brown said that shortly after the conference call, he was summoned from lunch by Tim Rigas, who said the company was receiving a lot of calls from investors about the co-borrowings and they should get together to decide what they would tell them.
Brown said that shortly afterward, he and Tim Rigas fielded a call from Banc of America Securities LLC analyst Doug Shapiro, who asked about the value of the Rigas-owned cable systems that were backing up the loans.
Brown said Tim Rigas told Shapiro the systems were worth about $1.6 billion. After Shapiro hung up, Brown said Tim Rigas told him the systems were worth about $1.3 billion, “but I thought we could explain a little more with $1.6 billion.”