Jury to Be Selected in Adelphia Fraud Case

John Rigas picked his sons to help him run Adelphia Communications Corp., the company that established him as a folksy, small-town businessman who built a sprawling cable company from scratch.

It will be up to a jury that will be selected this week to decide if Rigas and two sons stole millions of dollars from Adelphia in a monumental fraud.

Rigas, the 79-year-old son of immigrants, will stand trial with Timothy and Michael Rigas a year and a half after they were hauled off in handcuffs from their New York apartment.

At the heart of the case are charges that they improperly used Adelphia funds to pay for personal expenses such as building a multimillion-dollar golf course and transportation during a safari vacation.

The family denies the charges, saying they were the victims of bad advice, a depressed stock market and busy auditors.

Jury selection for the case starts today in the same federal court complex in Manhattan that has served as the stage for some of the most widely watched corporate cases in recent years, including the trials of media magnate Martha Stewart, former WorldCom Inc. finance chief Scott D. Sullivan and former star investment banker Frank Quattrone.

Opening arguments in the Rigas trial are expected to begin March 1.

John Rigas, a pioneer of the cable industry who started Adelphia in 1952 with a $300 check, and his two sons have resigned from Adelphia since the accusations were made.

The company later filed for Chapter 11 bankruptcy protection, after the disclosure of $2.3 billion in off-balance-sheet loans guaranteed by the company to the Rigas family, allegations of overstated earnings and questions about the company’s accounting methods.

The lengthy federal criminal indictment accuses the Rigas family of using more than $250 million in company funds to pay margin calls against personal loans.

John Rigas and his sons, both formerly high-ranking company executives, face about two dozen counts of securities, wire and bank fraud and conspiracy. If convicted, each faces a minimum of 15 to 20 years in jail, according to prosecutors.

“You work so hard,” John Rigas told Reuters in an interview last year. “You do nothing but help the company and shareholders, and have it all fall apart -- and with allegations that are so difficult for me to listen to. It is so incomprehensible, knowing in your heart that you had done nothing wrong intentionally.”

The family’s defense is likely to be that they relied on the advice of auditor Deloitte & Touche, their company’s outside attorney and bankers who suggested taking out co-borrowing loans.

Lawyers may also play on John Rigas’ age and questions about his health and raise doubts about how much he understood the advice he was given, according to legal experts.

If convicted, prison would represent a long fall for a businessman who was -- and by some accounts still is -- held in high regard by many people in Coudersport, Pa.

Adelphia, the fifth-largest cable company in the U.S., was Coudersport’s largest single employer. John Rigas sat on local boards and made big donations to charities. At one point, Adelphia’s stunning success had produced one of the lowest unemployment rates in Pennsylvania by providing jobs for about 1,700 local residents, or nearly 1 in 10 residents of rural Potter County. The company since has moved its headquarters to Denver.