Adelphia's Fraud
PAGE ONE
Adelphia Founder
And One Son
Are Found Guilty
Jury Remains Deadlocked
On Second Son, Acquits
Former Assistant Treasurer
By PETER GRANT and CHRISTINE NUZUM
Staff Reporters of THE WALL STREET JOURNAL
July 9, 2004; Page A1
Notching another victory against the corporate excesses of the 1990s, prosecutors won criminal convictions against the father-and-son team of John and Timothy Rigas, former top executives at cable company Adelphia Communications Corp. However, they failed to persuade a jury that the looting involved Adelphia's former assistant treasurer.
The jury left unresolved the case against another member of the Rigas family -- Michael Rigas, former head of Adelphia operations -- remaining deadlocked on most of the counts against him.
Because the Adelphia scandal emerged after the one at Enron, and the company was smaller in size than WorldCom or Tyco, it has garnered less public attention. But for the sheer audacity of the fraud, it ranks high up on the list. Adelphia executives testified that they routinely made up numbers that they gave to investors and lenders, even while the Rigases regularly withdrew money from the company without making reimbursements. Testimony at the trial included the story of how the company's plane was used to fly a Christmas tree to a family member in New York City at a cost of $6,000, and how Adelphia paid a $40,000 annual salary to a personal masseuse for the Rigases.
A federal-court jury convicted 79-year-old John Rigas, Adelphia's founder and former CEO, of fraud and conspiracy for looting the company of more than $100 million, hiding more than $2 billion in debt the family incurred, and lying to the public about Adelphia's operations and financial condition. His son Timothy, the former chief financial officer, was convicted of the same charges.
But after deliberating for eight days, the jury found Michael Mulcahey, Adelphia's former assistant treasurer, not guilty on all 23 counts of
Adelphia Founder
And One Son
Are Found Guilty
Jury Remains Deadlocked
On Second Son, Acquits
Former Assistant Treasurer
By PETER GRANT and CHRISTINE NUZUM
Staff Reporters of THE WALL STREET JOURNAL
July 9, 2004; Page A1
Notching another victory against the corporate excesses of the 1990s, prosecutors won criminal convictions against the father-and-son team of John and Timothy Rigas, former top executives at cable company Adelphia Communications Corp. However, they failed to persuade a jury that the looting involved Adelphia's former assistant treasurer.
The jury left unresolved the case against another member of the Rigas family -- Michael Rigas, former head of Adelphia operations -- remaining deadlocked on most of the counts against him.
Because the Adelphia scandal emerged after the one at Enron, and the company was smaller in size than WorldCom or Tyco, it has garnered less public attention. But for the sheer audacity of the fraud, it ranks high up on the list. Adelphia executives testified that they routinely made up numbers that they gave to investors and lenders, even while the Rigases regularly withdrew money from the company without making reimbursements. Testimony at the trial included the story of how the company's plane was used to fly a Christmas tree to a family member in New York City at a cost of $6,000, and how Adelphia paid a $40,000 annual salary to a personal masseuse for the Rigases.
A federal-court jury convicted 79-year-old John Rigas, Adelphia's founder and former CEO, of fraud and conspiracy for looting the company of more than $100 million, hiding more than $2 billion in debt the family incurred, and lying to the public about Adelphia's operations and financial condition. His son Timothy, the former chief financial officer, was convicted of the same charges.
But after deliberating for eight days, the jury found Michael Mulcahey, Adelphia's former assistant treasurer, not guilty on all 23 counts of