New York, Oct. 3 (Reuters): Cable industry pioneer John Rigas and two of his sons pleaded not guilty on Wednesday to charges of conspiracy and securities, wire and bank fraud for allegedly looting the family’s cable company, Adelphia Communications Corp.
Former Adelphia chief executive John Rigas, 78, and his sons Timothy and Michael, also senior executives, entered their pleas at an arraignment hearing in US District Court here.
The Rigases were indicted for a scheme to defraud investors by making false statements about the company’s off-balance-sheet debt and inflated operating results, and improper use of company funds for everything from personal loans to constructing a $ 13 million golf course on the senior Rigas’ property.
The government is seeking $ 2.5 billion in forfeitures, representing illegal proceeds from the alleged scheme.
The maximum sentences for conspiracy and wire fraud are five years in prison and a $ 250,000 fine. Securities fraud carries a maximum sentence of 10 years in prison and a $ 1 million fine for each count. Bank fraud carries a maximum of 30 years in prison and a $ 1 million fine.
Peter Fleming, John Rigas’ lawyer, said that after his client started and built a “great American corporation” some 50 years ago, at age 78 he is now “under attack”.
“In our view there is a massive and major public misperception of the activities of John and his sons in connection with Adelphia,” Fleming told reporters after the arraignment.
“In my own opinion the misperception at least in some part sadly has been fuelled by the existing Adelphia board of directors. I think that is sad and I think it is wrong.”
Fleming said that when the case is tried and the evidence is presented, “you will come to see John Rigas acted consistently for Adelphia’s best and indeed its vital interest.”
Two other former Adelphia executives — James Brown, a 40-year-old former vice president of finance, and Michael Mulcahey, 45, former director of internal reporting of treasury — also pleaded not guilty.