Adelphia’s Rigas, His Son Rest Case
Adelphia Communications Corp. founder John Rigas and his son Michael rested their defense Wednesday without testifying at their 3-month-old fraud and conspiracy trial.
John Rigas, 79, had called only three people to defend him after U.S. prosecutors presented 16 witnesses at the New York trial. Rigas skipped the trial Wednesday for a medical checkup on his bladder cancer, his attorney Peter Fleming said.
Rigas is accused with two of his sons, Michael and Timothy, and a fourth executive, Michael Mulcahey, of hiding $2.3 billion in debt, stealing $100 million and lying about revenue and operations at Adelphia, the No. 5 U.S. cable-television company. Mulcahey, 46, testified for several hours in his defense and will resume testimony Monday.
Michael Rigas, 50, a former vice president of operations, declined to take the witness stand after assessing the evidence against him, his lawyer Andrew Levander told jurors.
“Mr. Rigas is quite content with the record at this time,” Levander said.
Attorney Jeremy Temkin, who represents Timothy Rigas, 47, the former finance chief, introduced several documents into evidence and said he might seek admission of others. Temkin didn’t rest or tell jurors whether his client would testify.
Prosecutors completed their case Tuesday. The government’s star witness was James Brown, 42, a former finance vice president who pleaded guilty and testified to reduce a possible 45-year prison term. He said the Rigases lied to regulators and bankers about the company’s eroding finances before its bankruptcy filing in June 2002.
Prosecutors allege that the Rigases drew more than $50 million in unauthorized advances from the cash management system, which commingled money from Adelphia subsidiaries and private Rigas businesses.
Under questioning by his attorney, Mark Mahoney, Mulcahey discussed Adelphia’s syndicated loans and how he measured whether Adelphia complied with required ratios of debt to operating cash flow. Brown had testified that Mulcahey falsified reports for lenders and bondholders.
Another witness, former treasury supervisor James Helms, had testified that Mulcahey created phony documents in March 2002 to make it appear that the Rigas family used $423 million in cash to buy company securities.
After a conference with trial lawyers, U.S. District Judge Leonard Sand read a stipulation on a legal point that the defense attorneys have sought for weeks.
Sand told jurors that nothing was inherently wrong or illegal with Adelphia’s cash management system, its commingling of funds or its co-borrowing agreements. Rather, he said, prosecutors allege that the defendants broke the law by failing to make proper disclosures about them.
The Rigases argued throughout the trial that they intended to repay more than $3 billion that they owed the company at the time of the bankruptcy filing.
The trial will be in recess until Monday.
