Adelphia Ex-Exec Denies Fraud

Michael Mulcahey, a former Adelphia Communications Corp. assistant treasurer on trial for fraud, testified Wednesday that he didn’t believe that company founder John Rigas or his sons had tried to swindle shareholders.

Prosecutors charge that Mulcahey, 46, helped John Rigas and his sons Michael, 50, and Timothy, 47, steal $100 million, hide $2.3 billion in debt and lie about revenue and operations at Greenwood Village, Colo.-based Adelphia, which filed for bankruptcy protection in June 2002.

“I didn’t think they were trying to defraud the shareholders, so I certainly wasn’t trying to do that,” Mulcahey told jurors during his third and last day of direct testimony in New York.

Earlier, Mulcahey told the court that he didn’t get anything more than his $145,000 annual salary for work he did at Adelphia. It included signing receipts for sales of company stock and notes to companies controlled by Rigas and his sons.

“I didn’t receive any payments,” Mulcahey said.

Mulcahey testified that he believed the sales of stock to Rigas entities benefited Adelphia, the fifth-biggest U.S. cable provider, because they allowed the company to move debt off its ledger and pay down high-interest credit facilities, saving the company interest payments.

Under questioning by his lawyer, Mark Mahoney, Mulcahey described how a Rigas company would pay for Adelphia shares or notes with borrowed money. Adelphia would use the funds to temporarily reduce high-interest debt, and the Rigas companies would assume greater responsibility for loan obligations that they shared with Adelphia.