Risk Management

Rigas Father and Son Lose Final Appeal

Adelphia founder, 83, faces 15 years in prison, while his ex-CFO son will serve 20 after Supreme Court declines to rule.
Stephen TaubMarch 3, 2008

It looks like Adelphia Communications founder John Rigas will most likely die in prison after all.

The Supreme Court denied the appeal of the 83-year-old Rigas and his son, Timothy — their last legal step toward overturning their fraud convictions for their roles in the collapse of the one-time cable company. The high court issued its ruling without comment.

The elder Rigas is serving a 15-year prison term, while his son, Adelphia’s former chief financial officer, is serving a 20-year term.

Last May the 2nd U.S. Circuit Court of Appeals in New York affirmed the earlier convictions of the father and son on 18 counts, including securities fraud, bank fraud, and conspiracy. The court overturned one lesser count, however.

The appeals court ruled at the time that to win a reversal of the 2004 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 that the Rigases owed $2.3 billion in off-balance-sheet debt on bank loans taken jointly with the company, according to an earlier Bloomberg News report. In their appeal, the Rigases 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 the Bloomberg story.

At the trial, prosecutors accused the Rigas family of using the company’s money for personal use, including millions of dollars to finance things ranging from 100 pairs of bedroom slippers for Timothy Rigas to more than $3 million to produce a film by John Rigas’ daughter, Ellen, according to the Associated Press.

According to the wire service, prosecutors asserted that John Rigas once spent $6,000 to fly two Christmas trees to New York for his daughter.

Last year, Michael Rigas, another son, was sentenced to 10 months home confinement after pleading guilty to making a false entry in a company record, according to the AP.