Three members of the Rigas family – the controlling clan of US cable company Adelphia Communications – plus two of the firm’s executives were on Monday indicted by a federal grand jury on 24 counts of conspiracy and fraud.
John Rigas (the firm’s founder), his sons Michael and Timothy, James Brown (former vp–finance at Adelphia) and Michael Mulcahey (former director of internal reporting) are each charged with one count of conspiracy, sixteen counts of securities fraud, five of wire fraud and two of bank fraud.
The Rigases are accused of looting Adelphia, the nation’s sixth largest cable-TV firm, in what US Attorney James Comey described as “one of the most elaborate and extensive corporate frauds in United States history.”
Federal prosecutors allege that the defendants covered up around $2.5 billion (€2.6bn; £1.6bn) of debts and cash misappropriated by the Rigases. They are also accused of misrepresenting the financial wellbeing of the company in order to secure loans.
The 77-year-old John Rigas denies the charges, claiming that the agreements to borrow from the cable firm were “legal and entirely proper and were approved and ratified by Adelphia's outside directors and audited by its independent accountants.”
Data sourced from: New York Times; additional content by WARC staff