Prison Likely for Adelphia Patriarch
Federal Appeals Court Upholds 2004 Fraud Conviction

By Carrie Johnson
Washington Post Staff Writer
Friday, May 25, 2007

The 82-year-old founder of Adelphia Communications may soon be headed to prison after an appeals court upheld his conviction on conspiracy and fraud charges yesterday.

John J. Rigas, the patriarch of a family that controlled the cable television operator for more than a generation, contested a 2004 conviction that carries a 15-year prison term. Under federal sentencing guidelines, he must serve at least 85 percent of that sentence -- or more than a dozen years behind bars.

A trial judge had allowed Rigas to remain free pending appeal, even as two other figures tied to accounting malfeasance, WorldCom founder Bernard J. Ebbers and former Enron chief executive Jeffrey K. Skilling, are already serving sentences of nearly 25 years apiece.

In a long-awaited decision, a panel of the U.S. Court of Appeals for the 2nd Circuit in New York ruled that federal prosecutors did not have to call an expert witness to prove that Rigas and his son Timothy, the company's former finance chief, committed securities fraud.

The 55-page ruling affirmed a government strategy that has proved critical in a string of investigations that began nearly six years ago. Rather than bog down in arcane business issues that could confuse jurors, prosecutors instead relied on corporate insiders to weave a narrative focused on lies and personal greed.

Over the course of a 4 1/2 -month trial, prosecutors introduced evidence that the elder Rigas blurred the line between the finances of his family and of his company. In all, the family took more than $200 million from the company to produce a film, pay off stock loans and even buy bedroom slippers. The Rigases used nearly $13 million in Adelphia money to build a golf course near their compound in Coudersport, Pa., and spent $26 million more to buy timberland.

"Adelphia's financial statements and annual reports did little to apprise shareholders of what the Rigas family owed Adelphia," the appeals court wrote.

Lawyers for John Rigas did not return calls. Neither did attorneys representing Timothy J. Rigas, 51, who has been sentenced to a 20-year prison term. Michael J. Rigas, another son who worked at Adelphia, avoided prison time after striking a plea deal with the government.

The Rigases have the option of asking the entire appellate court to consider the case or seeking U.S. Supreme Court review. Legal experts said such rehearings are rare.

The appeals court panel agreed with the Rigases in one respect, tossing a single bank fraud charge against them and ordering the lower court to issue a new sentence. It remains unclear whether that one charge will significantly affect their prison time in a case with multiple convictions. A spokeswoman for Manhattan U.S. Attorney Michael J. Garcia, whose office handled the case, declined to comment.

Adelphia filed for bankruptcy protection in June 2002, months after auditors raised questions about more than $2.2 billion in debt the company had failed to disclose to investors. Federal agents handcuffed and took into custody John Rigas, a survivor of cancer and other health maladies, sending a public message to corporate America as investors began to lose confidence in the stock market five years ago.