Adelphia Communications founder John Rigas was sentenced today to 15 years in prison by a judge who blamed him for defrauding investors of his bankrupted cable company in one of the largest frauds in corporate history.
NEW YORK — Adelphia Communications founder John Rigas was sentenced today to 15 years in prison by a judge who blamed him for defrauding investors of his bankrupted cable company in one of the largest frauds in corporate history.
“Were it not for your age and health, I would impose a sentence far greater than I do today,” U.S. District Judge Leonard Sand told the 80-year-old Rigas after the one-time high flying cable empire patriarch insisted he meant to do no wrong.
Rigas’ son, Timothy, the company’s former chief financial officer, received a 20-year sentence this afternoon.
The pair had faced up to 30 years in prison each on their bank fraud convictions alone. They were also convicted of securities fraud and conspiracy.
“Long ago, he set Adelphia on a track of lying, of cheating, of defrauding,” Sand said of the elder Rigas. “Regrettably for everyone, this was not stopped over 10 years ago. It got more urgent and culminated in one of the largest frauds in corporate history.”
Before the sentence was handed down, Rigas acknowledged that “mistakes were made” in the way he ran the company.
“I may be convicted and sentenced,” said Rigas, “but in my heart and conscience, I’ll go to my grave believing truly that I did nothing but try to improve conditions” for the company and his family.
The judge said that if Rigas serves at least two years and is judged by prisons officials to have less than three months to live, prisons officials can ask the court to cut the sentence short.
The Rigases are among a slew of former corporate executives who have faced charges since the fall of Enron in 2001 touched off a parade of white-collar scandals.
The sentencing came just three days after another major white-collar conviction: A state court jury found former Tyco International CEO L. Dennis Kozlowski and former Tyco CFO Mark Swartz guilty of looting that company of $600 million.
Former WorldCom CEO Bernard Ebbers faces sentencing next month after he was convicted of presiding over that company’s record $11 billion accounting fraud.
Rigas founded Adelphia with a $300 license in 1952, took it public in 1986 and built it into a cable titan by acquiring other systems in the 1990s.
The company, which was then based in tiny Coudersport, Pa., collapsed into bankruptcy in 2002 after it disclosed a staggering $2.3 billion in off-balance-sheet debt. It now operates under bankruptcy protection in Greenwood Village, Colo.
At the trial, prosecutors said the Rigases used complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing about $100 million for themselves.
Prosecutors also described a lengthy list of personal luxuries that they said the Rigases financed with money stolen from the company.
One prosecutor said John Rigas had ordered two Christmas trees flown to New York for his daughter at a cost of $6,000. Prosecutors also said he 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 Coudersport home.
Rigas’ lawyer told jurors those charges were ludicrous and that “if you saw this on ‘Seinfeld,’ you’d double up.”
A second Rigas son, Michael, former executive vice president for operations, was acquitted of conspiracy and wire fraud. However, jurors were deadlocked on 15 counts of securities fraud and two counts of bank fraud. He is scheduled for a second trial in October.
Former Adelphia assistant treasurer Michael Mulcahey was tried with the Rigases but was acquitted of all charges.