Adelphia’s Ex-VP Pleads Guilty
Michael Rigas, the former vice president of cable operator Adelphia Communications Corp., pleaded guilty Wednesday to signing a false statement -- a reduced charge that could carry a sentence of up to three years in prison.
The plea means that Rigas, 51, will not face a retrial on 15 securities fraud charges involving Adelphia’s multibillion-dollar collapse. A federal jury in July 2004 deadlocked on counts against Rigas, who was accused of looting the company and lying about its finances.
His 81-year-old father, John J. Rigas, the company founder and former chief executive, was convicted and sentenced to 15 years in prison. His 49-year-old brother, Timothy J. Rigas, the former finance chief, also was convicted and received 20 years. Both are free on bail while they appeal their sentences. Early in October, a federal grand jury in Pennsylvania indicted them on new charges of not paying $300 million in taxes.
On Wednesday, Michael Rigas pleaded guilty to making a false entry when approving company documents that later proved fraudulent. The charge was reduced from previous allegations of bank and securities fraud.
“I knew it was wrong to sign a certification stating I had conducted a reasonable inquiry [into the documents] when I had neglected to do so,” he said before Judge Jed Rakoff in New York.
Prosecutors and defense lawyers submitted a letter to the judge saying they agreed to recommend a sentence of six months to a year in prison. The charge also carries a fine of up to $250,000.
Sentencing is set for March 3.
Although prosecutors said John and Timothy Rigas spent company money on vacation homes, personal land deals and movie production projects, there was no such evidence presented against Michael Rigas.
Rigas, a Harvard-educated lawyer who spent most of his adult life at Adelphia before leaving in 2002, now works for a family-owned cable television company near his home in Coudersport, Pa.
Rigas’ attorney, Andrew Levander, told jurors at the first trial that his client was clueless about financial matters and had no criminal intent to defraud Adelphia. Levander said Michael Rigas was “incredibly busy” and did not study the documents he signed that prosecutors said were false. He depicted his client as an honest man who drove a Toyota and never looted Adelphia, as prosecutors allege.
Jurors said at the time that nine of them had favored acquitting Rigas. The panel also deadlocked on two bank fraud counts, which prosecutors agreed to drop for the retrial.
Prosecutors intended to prove that Rigas signed false debt compliance statements, securities purchase agreements and regulatory filings. They also claimed that he approved false news releases.
Adelphia filed for Chapter 11 bankruptcy protection in June 2002. In April, the company accepted a buyout offer from joint bidders Time Warner Inc. and Comcast Corp.
