Rigases lose appeal of convictions
Two face long terms in Adelphia scandal
By Michael Beebe NEWS STAFF REPORTER
Updated: 05/25/07 6:46 AM
John J. Rigas and his son Timothy lost their best and perhaps only chance at avoiding lengthy prison terms as a three-judge federal appeals panel Thursday upheld their convictions for looting Adelphia Communications Corp. of more than $2.3 billion.
John Rigas, the diminutive 82- year-old founder of the cable company, and Timothy, 50, Adelphia’s chief financial officer, were properly convicted of securities fraud, conspiracy to commit bank fraud and bank fraud, the U.S. 2nd Circuit Court of Appeals ruled.
“Defendants are wrong,” the judges wrote of the Rigases’ primary defense: that government prosecutors were required to present expert testimony about accounting standards.
That argument had kept both Rigases out of jail since their conviction in July 2004, when the lowercourt judge ruled they had a legitimate chance in appealing their case.
The appeals court did reverse one minor count, meaning that Rigas and his son will return to U.S. District Judge Leonard B. Sand for resentencing.
The minor reversal is not expected to substantially change the 15- year term Sand earlier gave to John Rigas or the 20 years in prison he gave to Timothy Rigas. Sand told John Rigas at sentencing he was already giving him a break because of his advanced age and fragile health.
The judge also had told him then that once he serves at least two years in prison and ever is told he has less than three months to live, he will be released from custody.
Attorneys for both Rigases did not return telephone calls from The Buffalo News inquiring about a possible appeal. Federal prosecutors declined to comment,
and Sand’s staff did not have an immediate date for resentencing.
Thursday’s decision may be the final chapter in the dramatic rise and fall of John Rigas, who began his career by buying a movie house in Coudersport, Pa., in the early 1950s and then putting together the country’s fifth-largest cable television company.
Adelphia also owned the Buffalo Sabres and, until its fall in 2002, was considered the potential savior of Buffalo’s waterfront.
The end came when Timothy Rigas told investors in March 2002 that Adelphia had approximately $2.2 billion in liabilities that it never reported.
Adelphia’s stock price plunged 25 percent that day to $20.39 a share, and by May, when it was delisted from the stock exchange, shares had fallen to $1.16, a loss of billions for its investors. An office tower planned in Buffalo never was built.
The Rigas family was forced to forfeit 95 percent of its assets, or more than $1.5 billion.
The family, prosecutors charged, treated Adelphia as its personal piggy bank, using company funds to essentially buy hundreds of millions of dollars in Adelphia stock and a number of headline-grabbing personal items.
That included 200 pairs of slippers for Timothy Rigas; $3 million to finance a film by John Rigas’ daughter, Ellen; millions more for a never-finished designer golf course in Coudersport; and $6,000 to deliver two Christmas trees to Ellen Rigas in New York City aboard the company plane.
“The Rigases sort of hit for the cycle of corporate crime,” former U.S. Deputy Attorney General James B. Comey told The News in April 2005.
“You had self-dealing, you had accounting fraud, you had bank fraud, you had looting,” said Comey, who was the U.S. attorney in Manhattan when the case began. “You had everything you see in corporate crime.”
The jury had deadlocked on another Rigas son, Michael, who later pleaded guilty plea to a lesser charge and was sentenced to 10 months of home confinement.
John and Timothy Rigas have been home in Coudersport awaiting Thursday’s decision.
After the scandal forced Adelphia into bankruptcy, the company moved from Coudersport to Greenwood Village, Colo., and Time Warner Cable and Comcast Corp. later bought the company’s assets.
mbeebe@buffnews.com