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John Rigas guilty of conspiracy
Adelphia founder, son, found guilty on some charges that they looted cable company.
July 8, 2004: 6:05 PM EDT

NEW YORK (CNN/Money) - Adelphia founder John Rigas was found guilty of conspiracy, securities fraud and bank fraud Thursday -- the most serious charges he faced over concealing $2.3 billion in loans and stealing more than $100 million from the now-bankrupt cable company.

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The federal jury in Manhattan, which deliberated for eight days, also found Rigas not guilty of five counts of wire fraud. But he was found guilty of the 18 other counts he faced.

His son Timothy was found guilty of conspiracy and 15 counts of securities fraud and two counts of bank fraud. Like his father, Timothy, Adelphia's former chief financial officer, was found not guilty of wire fraud.

Rigas and his son Timothy face up to 15 to 20 years in prison on the various counts on which they were convicted.

John Rigas' other son Michael, Adelphia's former executive vice president of operations, was found not guilty of conspiracy and wire fraud. The jury failed to reach verdicts on the remaining 17 charges against him.

A fourth defendant, Michael Mulcahey, the company's former director of internal reporting, was found not guilty on all charges against him.

Upon hearing the verdict, Mulcahey broke down in tears and was excused by the judge from the courtroom.

Legal experts have said that the government's case against Mulcahey, who was the only defendant to testify at trial, was the most marginal of the four.

Each defendant had faced 23 charges, and announcing the 92 total verdicts took some time Thursday afternoon. The judge told jurors to return Friday for his instructions with respect to the undecided charges against Michael Rigas.

The jury told the judge the verdicts they reached were unanimous.

The four former executives at Adelphia Communications Corp. were arrested nearly two years ago in a case prosecutors at the time said constituted "one of the most elaborate and extensive corporate frauds in United States history."

Their trial, which began in March, lacked much of the intrigue that has characterized other recent corporate criminal trials, despite accusations by prosecutors that the Rigas' treated Adelphia like a "personal piggy bank" to pay for luxury condos and a golf course, and to cover personal investment losses.

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CNNfn's Allan Chernoff takes a look at the players in the trial, three members of the Rigas family who founded Adelphia and a fourth executive, accused of looting the company for millions.

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Instead, the 18-week trial often delved into the arcana of accounting rules as prosecutors sought to prove that the Rigas', with Mulcahey's help, conspired to hide $2.3 billion in Adelphia debt, stole $100 million, and lied about the company's revenues and operations.

The chicanery, prosecutors argued, helped drive the company into bankruptcy two years ago.

Defense lawyers had maintained throughout the trial their clients did nothing wrong and that the Rigases fully intended to reimburse the company.

Thursday's verdict marked a major victory for the government, whose recent efforts to throw corporate executives in jail have so far achieved mixed results.

The Rigas criminal case first captured national attention two years ago when prosecutors, in a departure from the usual practice of allowing high-profile people accused of crimes to turn themselves in, arrested John Rigas -- who turned $300 in seed money in 1952 into one of the country's biggest cable operators -- at his Park Avenue apartment.

That early July morning in 2002, the sight of a frail Rigas, then 77, being escorted in handcuffs was broadcast around the country.

The perp walk came to symbolize the government's intent to pursue corporate criminals after Enron Corp. collapsed, igniting a wave of accounting scandals at WorldCom, Global Crossing and other former high-fliers.

John J. Rigas
Corporate Scandals
Adelphia Communications Corporation

Rigas' arrest came just weeks after Adelphia filed Chapter 11 bankruptcy, and on the same day that Worldcom revealed it had inflated profits by hiding billions of dollars in costs. Soon after Worldcom, now known as MCI, also filed Chapter 11 in the biggest bankruptcy in U.S. history.

Several former Adelphia employees have cooperated with prosecutors, among them James Brown, a former vice president for finance. Brown, who pleaded guilty to conspiracy, bank fraud, and wire fraud, was the government's star witness at trial.

Brown faces up to 45 years in prison but is hoping his cooperation will result in a lighter sentence.

Adelphia (ADELQ: Research, Estimates), which is still in bankruptcy, said last week it was "vigorously pursuing" a sale of the company. Among the rumored suitors are Time Warner Inc., the parent of CNN/Money.

Greenwood Village, Colo.-based Adelphia has more than 5.3 million subscribers, making it the country's fifth-largest cable operator.

Separately, the Rigas' are battling civil fraud and conspiracy charges brought by the Securities and Exchange Commission. James Rigas, a third son who has not been criminally charged, was also sued by the SEC.

Two other members of the Rigas clan Doris Rigas, the wife of John, and their daughter Ellen Venetis have not been charged although they both received money from Adelphia.

The verdicts in the Adelphia case came the same day that ex-Enron Chairman Ken Lay surrendered to authorities a day after he was indicted and again protested his innocence.  Top of page

-- from CNN/Money's Krysten Crawford and CNNfn's Winnie Dunbar

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