With the ink on their indictments barely dry, members of the disgraced
Rigas family began firing back at federal accusations that they looted Adelphia
Communications Corp. of hundreds of million of dollars.
A federal grand jury in Manhattan Monday handed down indictments for former
Adelphia chairman John Rigas and his sons, former chief financial officer
Timothy and executive vice president of operations Michael Rigas, charging them
with 24 counts of conspiracy, securities fraud, wire fraud and bank fraud.
Also named in the indictments were former VP of finance James Brown and
former assistant treasurer Michael Mulcahey.
In a statement, U.S. Attorney James Comey called the fraud committed by the
defendants one of the most elaborate in U.S. history.
'The Rigas defendants and their co-conspirators exploited Adelphia's
byzantine corporate and financial structure to create a towering facade of false
success, even as Adelphia was collapsing under the weight of its staggering debt
burden and the defendants' failing management of the company, and the Rigas
family lined their own pockets with shareholder dollars,' Comey said in a
Comey added that the investigation is continuing.
But in their first direct response -- albeit canned -- to the charges since
being arrested by U.S. Postal Inspectors July 24, two members of the Rigas
family said they did nothing wrong.
'As the legal process unfolds and the facts are presented clearly and
accurately, I am confident that a far different story will emerge than the one
that has been reported to date,' John Rigas said in the statement.
'The corporate and personal reputation I have worked to build over the last
50 years has been irreparably damaged,' he added. 'My family and I have always
acted with integrity and honesty, and we are committed to restoring our
credibility and that of Adelphia.'
Paul Grand, one of Tim Rigas' attorneys, also denied the allegations in a
'Today's indictment is a grave mistake, the
result of a post-Enron rush to judgment,' Grand
'Contrary to the allegations in the indictment, Tim Rigas did not misuse his
position or loot the company, nor did he participate in any intentional
falsification of the company's publicly reported financial data.'
He continued, 'In short, we are confident that there has been no fraud or
abuse of position. Regrettably, it will take a long and costly trial to
demonstrate the innocence of Tim Rigas, his father and brother and their
Adelphia first ran into trouble in March, when it revealed that it had $2.3
billion in off-balance-sheet debt.
That debt later ballooned to $3.1 billion, and a series of self-dealing
arrangements made by the Rigas family was uncovered, including using company
funds to build a championship golf course, to purchase real estate and to buy
In the statement, John Rigas claimed that the co-borrowing agreements were
'legal and entirely proper,' and that they were approved by Adelphia's outside
Among the charges in the indictments are that Adelphia
executives conspired to report false financial figures, including inflating cash
flow and subscriber numbers to meet Wall Street targets.