Closing arguments in the three-month long federal fraud trial of four former Adelphia Communications Corp. executives began late last week. The government argued that the defendants used Adelphia as their personal ATM, while defense attorneys attempted to discredit the government’s star witness, former Adelphia vice president of finance Jim Brown.
Former Adelphia chairman John Rigas, his sons Michael and Timothy and former assistant treasurer Michael Mulcahey are charged with 24 counts of fraud and conspiracy for allegedly defrauding investors and bilking the company of hundreds of millions of dollars for their personal use. The trial began in New York on March 1.
Assistant U.S. Attorney Christopher Clark took two days to make his summation, telling the jury last Wednesday that the evidence shows that the Rigases blatantly disregarded the interests of shareholders while pilfering millions of dollars from Adelphia for golf course memberships, trips on the company jet to shuttle actresses and golf pros on vacation getaways, and to buy company stock.
“This is a case about greed, betrayal of trust, and lies,” Clark said. “It’s about the greed of one family and the lies that these four men told investors to hide the fact that they allowed the Rigas family to treat Adelphia, a public corporation, like one family’s personal piggy bank.”
John Rigas’s attorney, Peter Fleming, used the better part of two hours last Thursday to try and poke holes in the government’s case, reiterating that the elder Rigas never sold a share of stock and claiming the former chairman relied on experts to ensure that company business was being conducted properly.
Fleming reminded the jury that in 1999 — the year that the Rigases allegedly began their scheme to defraud shareholders — John Rigas underwent triple bypass surgery and was diagnosed with bladder cancer.
At that time, thinking of his own mortality, John Rigas made moves to strengthen Adelphia’s board of directors to ensure a smooth transition of ownership to his sons in the event of his death.
“Does he have a right to believe that things would be done properly, that adequate and appropriate disclosures were made, that the lawyers and the accountants and the personal accountants would make sure of that?” Fleming asked.
Fleming also alluded that the government’s decision to arrest the Rigases was high theater, and said that in light of the lack of evidence against his client, their strategy was to “dirty up” John Rigas.
“The Department of Justice decided to arrest the Rigases, handcuff them, and parade them out before a tipped-off group of television cameras. You ask yourselves whether that is a rush to judgment,” Fleming said.
Fleming saved his most stinging comments for Brown, who pleaded guilty to three counts of fraud in November 2002, but cut a deal with prosecutors for a lesser sentence in return for his testimony.
Calling Brown “essentially without conscience,” Fleming told the jury that Brown lied on the stand and that his testimony was self-serving.
“Jim Brown is all about Jim Brown,” Fleming said.
Fleming also disputed government claims that John Rigas used Adelphia money to buy 3,600 acres of timberland in Coudersport, Pa., “so he could look out of his front window.”
“If you saw this on Seinfeld, you’d double up,” Fleming said.
Clark defended Brown, saying he was more credible than Mulcahey, who earlier in his testimony needed a break because he was light-headed and overheated.
Clark said that Brown did not “break down and start panicked sweats or have to ask for a break so he could try to think up some new story to tell because he had been caught in a lie by the person who was asking him questions. Mr. Brown told the truth.”
Closing arguments are expected to continue this week.