“The Rigas family’s personal piggybank” is how government officials describe cable operator Adelphia Communications, now in Chapter 11 administration. The company’s 77-year old founder and former chairman John Rigas “looted Adelphia on a massive scale” along with his sons Michael and Timothy and two other executives, alleges a 68-page indictment by the US Attorney’s New York office.
The document refers to “losses to investors of billions of dollars” caused by a variety of frauds. If found guilty on all charges the accused face up to one hundred years as guests of the US penal system.
The familial scams are said to have ranged from use of company loans to buy Adelphia shares, self-dealing between Adelphia and companies controlled by the Rigas family, misleading statements to investors about the company's financial position, and the use by the Rigas family of corporate funds for their personal benefit, including the construction of a $13 million (€12.99m; £8.25m) golf course.
The Securities and Exchange Commission said it would seek to recover all the money and assets allegedly misappropriated by the quintet – thought to be worth over $1 billion.
And according to SEC enforcement division head Stephen Cutler, the investigation will also extend to the role played by Adelphia’s auditors Deloitte & Touche, whose consulting arm prudently decided to rebrand as Braxted earlier this month.
Data sourced from: Financial Times; additional content by WARC staff