Adelphia’s Rigas sentenced to 15 years

Tue, Jun 21, 2005 (9:26 a.m.)

NEW YORK -- With frail Adelphia Communications Corp. founder John Rigas looking on, his lawyer portrayed him as a selfless giver who cared deeply for tiny Coudersport, Pa., where he built the cable company.

An exasperated Judge Leonard Sand cut him off.

"Do you see what he did?" the judge demanded. "What he did to Coudersport, what he did with assets and by means which were not appropriately his? To be a great philanthropist with other people's money really is not very persuasive."

Moments later, the Manhattan federal judge sentenced the 80-year-old Rigas to 15 years in prison for his role in the looting and debt-hiding scandal that plunged Adelphia into bankruptcy three years ago.

Rigas' son Timothy, 49, who like his father was convicted last year of bank fraud, securities fraud and conspiracy, was sentenced to 20 years in prison. Both could have been sentenced to life.

The sentences are among the harshest handed down in any U.S. court since the fall of Enron in 2001 touched off a rash of corporate scandals that rocked the markets and have cost investors billions of dollars.

The judge, citing the elder Rigas' poor health, said his sentence might be cut short if he serves at least two years and prison doctors believe he has less than three months to live.

"This is a tragedy lacking in heroes," the judge said.

Adelphia prosecutors had accused the Rigases of using complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing about $100 million for themselves.

They were accused of spending the money on a lengthy list of personal luxuries. Prosecutors said John Rigas had ordered two Christmas trees flown to New York for his daughter at a cost of $6,000, ordered up 17 company cars and had the company buy 3,600 acres of timberland at a cost of $26 million to preserve the view outside his Pennsylvania home.

Worse still for investors, the company collapsed into bankruptcy in 2002 after it disclosed a staggering $2.3 billion in off-balance-sheet debt that prosecutors said was deliberately hid by the Rigases.

"Our intentions were good. The results were not," Timothy Rigas told the judge.

Adelphia, founded by John Rigas in tiny Coudersport, Pa., and the lifeblood of that town for 50 years, now operates under bankruptcy protection in Greenwood Village, Colo. The nation's fifth-largest cable company, Adelphia has more than 5 million customers in 31 states and Puerto Rico.

The judge declined to force the two men to pay restitution, noting the family has already agreed to forfeit more than $1.5 billion to settle regulatory charges.

At the most dramatic moment of a hearing that stretched nearly three hours, John Rigas slowly rose from his chair just before being sentenced, shuffled to a lectern and addressed the judge, speaking slowly and softly.

"In my heart and in my conscience, I'll go to my grave really and truly believing that I did nothing but try to improve the conditions of my employees," he said.

He said repeatedly he had led a blessed life. "If I did anything wrong, I apologize," he said.

Just after he was sentenced, the elder Rigas, hunched forward in his seat, held his right hand over his mouth and dabbed at his eyes and nose with a white tissue.

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