Adelphia founder Rigas sentenced to prison
Rigas sentenced
June 21, 2005
NEW YORK -- Despite his pleas to the federal judge who oversaw his four-month fraud and conspiracy trial nearly a year ago, aging Adelphia Communications founder and former chairman John Rigas was given a 15-year prison sentence Monday in a packed Manhattan courtroom, while his son and former chief financial officer, Timothy, was sentenced to 20 years in prison.
Judge Leonard Sand was blunt in saying he thought John Rigas' sentence should have been heavier. "Were it not for your age and health, I would impose a sentence far greater than I do today," he told John Rigas.
"This is a tragedy. There are no heroes here," said the judge, ordering both men to report to prison Sept. 19. He called the case one of the "largest frauds in corporate history," saying that as time went on the lying and cheating "got more brazen," and nothing was done to halt the deception of stockholders.
The Rigases were convicted in July 2004 on 18 counts each of bank fraud, securities fraud and conspiracy that led to Adelphia's downfall and bankruptcy in 2002 with company debt of $2.3 billion. The two had faced up to 30 years in prison each on their bank fraud convictions alone.
They are both appealing their convictions, and their attorneys asked that they be given special considerations as to where they are sent. John Rigas' attorney asked that he serve his sentence in a federal medical center as he has suffered from heart problems and has bladder cancer. The judge said he can apply to have the sentence reduced after two years, if his medical condition proves terminal.
Another family member, former vp Michael Rigas, awaits his retrial in October, while former assistant treasurer Michael Mulcahey was acquitted on all charges.
Prosecutors had hoped for much more severe sentencing, up to 215 years, in what they called one of the "most serious economic crimes ever committed."
Emotional family members wiped their tears as the sentences were read. John Rigas' daughter -- who was mentioned in the trial after she had two separate Christmas trees flown to her in Manhattan on the company jet -- sat rocking side to side throughout the three-hour sentencing. Other supporters of the Rigases, in the back of the courtroom, hugged one another.
The soft-spoken John Rigas gave a tearful history of the company he built, the family he was blessed with and the extraordinary people he met along the way. "If I did anything wrong, I apologize," he said. "In my heart and conscience, I'll go to my grave really believing that I did nothing but try to improve conditions for my employees and family," he said. "It's in your hands, and in God's hand."
John Rigas founded Adelphia with a $300 license in 1952. The company went public in 1986 and was acquisitive throughout the 1990s, growing into one of the largest cable operators in the U.S.
One former investor, Leonard Tow, 77, who sold his Century Communications to Adelphia in 1999 for 27 million shares in Adelphia, was given the chance to speak before sentencing was given. Tow described the massive loss he and his wife incurred, in which their $1.5 billion in stock became almost worthless.
Tow went on to describe the philanthropic causes that his family foundation would have contributed to but now cannot because of the fraud loss. He asked that the court consider other Rigas victims. Despite the $17.6 billion sale of Adelphia to Time Warner and Comcast Corp., Tow said many victims are unlikely to receive anything.
While the judge did acknowledge the outpouring of letters and support on both sides of the case, it did not soften his stance on the 80-year-old John Rigas, who asked for the chance to "live out my life in a quiet and peaceful manner."
John Rigas' attorney, Peter Fleming, tried to barter for a light sentence, portraying his client once more as a man who cared genuinely about his company and the community he helped to build in rural Coudersport, Pa. Fleming argued that any financial misdoings were done under specific co-borrowing agreements that were intended to be repaid. The judge rebuked Fleming's pleas, saying that if his intent was to convince him of something other than "blatant fraud," then "you're going to have a hard sell."
Judge Sand went on to say that the matters were deliberated upon for months by a jury that was "long on street smarts and short on sophistication of the market," but a jury "obviously not swept away by hysteria."
Corporate scandal is an increasingly familiar topic these days as other executives await sentencing in the upcoming days. Tyco International's Dennis Kozlowski was convicted Friday and awaits sentencing, while a jury is weighing a verdict in the case of former HealthSouth Corp. CEO Richard Scrushy.
Judge Leonard Sand was blunt in saying he thought John Rigas' sentence should have been heavier. "Were it not for your age and health, I would impose a sentence far greater than I do today," he told John Rigas.
"This is a tragedy. There are no heroes here," said the judge, ordering both men to report to prison Sept. 19. He called the case one of the "largest frauds in corporate history," saying that as time went on the lying and cheating "got more brazen," and nothing was done to halt the deception of stockholders.
The Rigases were convicted in July 2004 on 18 counts each of bank fraud, securities fraud and conspiracy that led to Adelphia's downfall and bankruptcy in 2002 with company debt of $2.3 billion. The two had faced up to 30 years in prison each on their bank fraud convictions alone.
They are both appealing their convictions, and their attorneys asked that they be given special considerations as to where they are sent. John Rigas' attorney asked that he serve his sentence in a federal medical center as he has suffered from heart problems and has bladder cancer. The judge said he can apply to have the sentence reduced after two years, if his medical condition proves terminal.
Another family member, former vp Michael Rigas, awaits his retrial in October, while former assistant treasurer Michael Mulcahey was acquitted on all charges.
Prosecutors had hoped for much more severe sentencing, up to 215 years, in what they called one of the "most serious economic crimes ever committed."
Emotional family members wiped their tears as the sentences were read. John Rigas' daughter -- who was mentioned in the trial after she had two separate Christmas trees flown to her in Manhattan on the company jet -- sat rocking side to side throughout the three-hour sentencing. Other supporters of the Rigases, in the back of the courtroom, hugged one another.
The soft-spoken John Rigas gave a tearful history of the company he built, the family he was blessed with and the extraordinary people he met along the way. "If I did anything wrong, I apologize," he said. "In my heart and conscience, I'll go to my grave really believing that I did nothing but try to improve conditions for my employees and family," he said. "It's in your hands, and in God's hand."
John Rigas founded Adelphia with a $300 license in 1952. The company went public in 1986 and was acquisitive throughout the 1990s, growing into one of the largest cable operators in the U.S.
One former investor, Leonard Tow, 77, who sold his Century Communications to Adelphia in 1999 for 27 million shares in Adelphia, was given the chance to speak before sentencing was given. Tow described the massive loss he and his wife incurred, in which their $1.5 billion in stock became almost worthless.
Tow went on to describe the philanthropic causes that his family foundation would have contributed to but now cannot because of the fraud loss. He asked that the court consider other Rigas victims. Despite the $17.6 billion sale of Adelphia to Time Warner and Comcast Corp., Tow said many victims are unlikely to receive anything.
While the judge did acknowledge the outpouring of letters and support on both sides of the case, it did not soften his stance on the 80-year-old John Rigas, who asked for the chance to "live out my life in a quiet and peaceful manner."
John Rigas' attorney, Peter Fleming, tried to barter for a light sentence, portraying his client once more as a man who cared genuinely about his company and the community he helped to build in rural Coudersport, Pa. Fleming argued that any financial misdoings were done under specific co-borrowing agreements that were intended to be repaid. The judge rebuked Fleming's pleas, saying that if his intent was to convince him of something other than "blatant fraud," then "you're going to have a hard sell."
Judge Sand went on to say that the matters were deliberated upon for months by a jury that was "long on street smarts and short on sophistication of the market," but a jury "obviously not swept away by hysteria."
Corporate scandal is an increasingly familiar topic these days as other executives await sentencing in the upcoming days. Tyco International's Dennis Kozlowski was convicted Friday and awaits sentencing, while a jury is weighing a verdict in the case of former HealthSouth Corp. CEO Richard Scrushy.
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