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Court affirms 18 counts against John Rigas and his son Timothy, convicted in 2004 for their roles in one of the more infamous corporate scandals of recent years.
Stephen Taub, CFO.com | US
May 25, 2007
Adelphia Communications founder John Rigas and his son Timothy are another step closer to spending many years behind bars.
On Thursday an appeals court upheld their July 2004 convictions for their roles in one of the more infamous corporate scandals of recent years, a massive fraud that bankrupted the cable company.
John Rigas, now 82, was sentenced in June 2005 to 15 years in prison; Timothy Rigas, who served as chief financial offer, was sentenced to 20 years. Both have been free on bail while appealing their convictions.
Although it did overturn one lesser count, a three-judge panel of the U.S. Court of Appeals for the Second Circuit affirmed 18 other counts against the duo, including securities fraud, bank fraud, and conspiracy to commit bank fraud.
According to Reuters, the court ruled that to win a reversal of the jury verdict, the defendants needed to show substantial errors by the district court. "Given the weight of evidence supporting the jury's verdict on each charge, we conclude that they have not done so," the judges reportedly determined.
Adelphia began its nosedive into bankruptcy when it disclosed the Rigases owed $2.3 billion in off-balance-sheet debt on bank loans taken jointly with the company, according to Bloomberg. In their appeal, the Rigases had reportedly argued that jurors should have heard from an accounting expert about the loans.
In its 55-page decision, however, the appeals court agreed with prosecutors, who maintained that jurors didn't need an expert to understand that the Rigases falsely said they used their own money to buy $1.6 billion of the company's stock and debt. "The government was not required to present expert testimony about GAAP's requirements because these requirements are not essential to the securities fraud," the court stated, according to Bloomberg.