John Rigas, founder and former chairman and CEO of cable television giant Adelphia Communications, is led by U.S. postal inspector police to a New York City federal court in July. (Louis Lanzano - AP) _____TechNews.com Archive_____ • Adelphia Withholds Rigas Severance (The Washington Post, Sep 12, 2002) • Probe of Adelphia's Rigas Family Widens (The Washington Post, Aug 8, 2002) • Adelphia Founder, Sons Charged (The Washington Post, Jul 25, 2002) • Adelphia Indictments Readied (The Washington Post, Jul 16, 2002) • Adelphia's Troubles Lead to Chapter 11 (The Washington Post, Jun 26, 2002) • Adelphia Details Rigas Deals (The Washington Post, May 25, 2002) • Rigas Family Gives Up Control of Cable Firm (The Washington Post, May 24, 2002) • Adelphia's Rigas Quits Amid Loan Imbroglio (The Washington Post, May 16, 2002) _____Business_____ • Latest Business News • Check Your Portfolio ___ Confidence Crisis ___ • Full Report • Special: WorldCom • Special: Accounting • Special: Enron • Graphic: Understanding Enron • Special: Wall Street Probe ____Primers____ • Why the Growing Cynicism? • Accounting & Andersen • Enron's Downfall • Probe on Wall Street ____ Timelines ____ • WorldCom | Andersen Trial • Enron | Wall Street Probe ____Photo Galleries____ • The Fall of Enron • Corporations Gone Awry _____ Cast Your Vote _____ Do you think enough is being done to curtail corporate fraud? (Post Your Comments) yes no not sure   How others voted This is an unscientific survey of washingtonpost.com users, not a Washington Post poll. E-Mail This Article Printer-Friendly Version Subscribe to print edition

By Devlin Barrett
Associated Press Writer
Monday, September 23, 2002; 2:47 PM

NEW YORK –– Adelphia Communications Corp. founder John J. Rigas, his sons and two other former executives were indicted Monday on charges that included conspiracy, securities fraud and wire fraud.

The indictment, handed up in Manhattan federal court, also seeks $2.5 billion in forfeiture for the alleged large-scale accounting fraud and corporate looting.

In addition to charges filed in a criminal complaint in July, Monday's 24-count indictment added new securities fraud charges and conspiracy charges stemming from allegedly false statements made in filings to the Securities and Exchange Commission.

The court papers name Rigas; his sons, Timothy and Michael; James R. Brown, former vice president of finance; and Michael C. Mulcahey, former director of internal reporting.

Federal authorities earlier accused the Rigases of making the company into their "personal piggy bank."

Rigas, the 77-year-old founder, and his sons were arrested on July 24 at their apartment on Manhattan's Upper East Side. An earlier criminal complaint charged them with fraud for allegedly hiding $2.3 billion in liabilities from investors.

The Rigases have been free on $10 million bail each, secured by cash, land and other property.

Rigas issued a statement Monday insisting the transactions detailed in the indictment were perfectly legal.

"The corporate and personal reputation I have worked to build over the last fifty years has been irreparably damaged," Rigas said. "My family and I have always acted with integrity and honesty and are committed to restoring our credibility and that of Adelphia."

Lawyers for all five former executives have denied that their clients have committed any wrongdoing.

"Starting with nothing, John Rigas built a major American corporation which has now suffered serious damage through these accusations and charges," said his lawyer, Peter Fleming. "When the prosecution fails to prove its case, who will take responsibility?"

Adelphia, the nation's sixth largest cable television company, based in Coudersport, Pa., filed for Chapter 11 bankruptcy protection June 25. The Rigases stepped down from their board seats and executive posts at the company in May.

Federal prosecutors have accused the family of using $252 million in company money to pay margin calls, or demands for cash payments on loans for which they had put up Adelphia stock as collateral.

It also said Adelphia employees regularly performed work for other companies owned by Rigas family members, and that the companies' bills were regularly paid out of Adelphia bank accounts.

The federal complaint said the family's companies included the Buffalo Sabres pro hockey team, a furniture and interior design company, a car dealership and a number of partnerships.

Rigas, who was the company's chief executive officer and president, and his sons also have been named as defendants in more than 40 civil lawsuits, including one the company filed the day of their arrests.

The company lawsuit, filed in the U.S. Bankruptcy Court in New York, accuses the Rigases of conspiring to use company funds for their own benefit. The lawsuit alleged that off-the-books transactions and self-dealing by the Rigas family resulted in damages and loss in market capitalization of more than $1 billion, for which the company sought triple damages.

The company also obtained a temporary restraining order Aug. 27 from U.S. Bankruptcy Judge Robert E. Gerber barring John Rigas or family members from selling any real estate until it could be determined whether Adelphia held part ownership.