Michael J. Garcia, U.S. attorney for the Southern District of New York, announced that victims of the securities
fraud committed at Adelphia Communications can ask the U.S. Attorney General to recover parts of their financial losses that were directly caused by the fraud.
In July 2004, founder John Rigas and his son,
ex-CFO Timothy Rigas were convicted
in Manhattan federal court of securities fraud,
conspiracy to commit bank fraud, and bank fraud
stemming from their roles in one of the more
spectacular bankruptcies of this millennium.
They are currently serving prison sentences. The older and younger Rigases were originally sentenced to 15 and 20 years in
prison, respectively. They will be re-sentenced on May 7, 2008 by Leonard B. Sand, U.S. District Judge for the Southern
District of New York.
The investigation and prosecution of the Adelphia
fraud resulted in criminal forfeiture to the United
States of over $700 million. That money will be
distributed to the victims of the fraud under the
Attorney General’s discretionary authority under Department of Justice rule to give back forfeited property to victims.
The Securities and Exchange Commission is seeking authority from the U.S, District Court–which is overseeing its civil enforcement
actions arising out of the Adelphia fraud–to combine
the funds it has recovered in those actions with the
forfeited funds to be distributed to the victims.
In March 2006, Michael Rigas, another of John
Rigas’s sons, avoided prison time when the former chief
operating officer of the cable operator was sentenced
to 10 months of home confinement and two years of
probation after pleading guilty to one count of making
a false entry in a financial record.