The Adelphia Communications Scandal Created Controversy. The Fraudster Got Sympathy From the Judge and Received a Light Sentence for Stealing From Old Folks. ________________________________________
The Adelphia Communications scandal broke in 2002 when a footnote in a routine quarterly earnings statement revealed that the Rigas family had borrowed more than $2 billion from the company. But they didn't pay it back. Warning bells started ringing because of the huge amount of cash involved and because of a reference to a peculiar arrangement with Adelphia that made the family and the company responsible for each other's debts. Ultimately it was revealed that the father-and-son team of John and Timothy Rigas were thieves and fraudsters of the most audacious kind, routinely made up numbers for presentation to shareholders. While they did so, they treated the company like their own cash machine, making withdrawals only and never paying anything back. Using the company jet for family jaunts and hiring a permanent masseuse at the company's expense were the kind of antics that finally sent the Rigases to prison. The federal-court jury ultimately convicted the 79-year-old Adelphia founder and former CEO John Rigas and his son Timothy, the former chief financial officer, of fraud and conspiracy. It is estimated that the Rigases stole more than $100 million from the company and hid more than $2 billion in debt the family incurred. They also lied to the investors and the public about Adelphia. The Adelphia Communications scandal had innocent beginnings. John Rigas, the son of Greek emigrants, lived the American dream, building Adelphia into the fifth largest cable network in the United Stastes. By 2002, it employed two-thirds of the population of the little town of Coudersport, Pa., which is nestled against the Allegheny Mountains. ADELPHIA BANKRUPTCY MESSAGE
When the firm filed for...