Michael Rigas to Face Second Trial

A judge ruled Tuesday that former Adelphia Communications Corp. Vice President Michael J. Rigas must face a second trial on securities fraud charges after a jury deadlocked in July.

U.S. District Judge Leonard Sand in New York refused to dismiss 15 securities fraud counts after Rigas’ lawyers pointed to his acquittal on conspiracy and said prosecutors lacked sufficient evidence.

Jurors convicted Rigas’ father, John, and brother, Timothy, of looting the cable television company and lying about its finances before its June 2002 bankruptcy filing.

Defense attorneys argued that it was unfair to acquit Michael Rigas, 50, of conspiracy and make him stand trial again for securities fraud. Sand ruled that Rigas could have signed false financial documents and disclosures without conspiring with his father and brother. He said there was enough evidence to warrant another trial.

“It cannot be said that the jury necessarily determined that Michael Rigas lacked a required element of the substantive offense of securities fraud,” Sand ruled in a 12-page opinion.

The judge’s opinion followed an Oct. 26 hearing at which he dismissed two counts of bank fraud, the most serious charge, against Rigas. Prosecutors said they were prepared to dismiss those counts after jurors deadlocked on them.

Jurors said in interviews after the July 9 verdict that they favored acquitting Rigas, 9 to 3.

Defense attorney Andrew Levander had argued that prosecutors failed to prove that Michael Rigas intended to violate securities laws or that he signed disclosures and other statements he knew to be false.

Levander depicted Rigas to jurors as a Harvard Law School graduate who did not spend corporate money on himself lavishly, who was absorbed in company operations and who was outside the conspiracy’s inner circle.

Jurors may have concluded that Rigas might have acted with “the requisite criminal intent” by signing statements he knew were false and deceptive, Sand wrote.

Prosecutors offered evidence that Rigas signed false debt compliance statements and securities purchase agreements that required his family to pay cash it didn’t have, Sand said.

They also showed jurors evidence that Rigas signed regulatory filings that he knew contained false information about the source of funds for securities purchases and that he approved press releases with false information about financial results and subscriber numbers, Sand said.