"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

05 January 2007

Adelphia's Rigas, Prison-Bound at 82, `Made Mistakes'

Let's all shed a tear for the Rigas family which is engaged in a full-fledged media blitz to claim he "didn't do anything illegal."

Jan. 5 (Bloomberg) -- John Rigas, the founder of bankrupt Adelphia Communications Corp., was sipping coffee this week at the Maple Tree restaurant in Coudersport, Pennsylvania, he equivocated. ``You can't sleep well when so many bad things happened to you and your family,' said Rigas in one of three interviews with Bloomberg News in the last two months. ``My brain isn't working as well as it should. Fear creeps in. Stress creeps in. You imagine a whole lot of things. I can't imagine this happened to us. I made mistakes, but not illegal mistakes.' For a decade, prosecutors said, the Rigases used Adelphia as a personal piggybank to buy company stock and debt, steal cash advances, pay for residences around the country, and fund Timothy Rigas's passion for golf.

Prison Ordeal- ``There's no way to prepare in my mind for anything like that, especially when you know you're innocent,' said Rigas, who is free on bail. He didn't testify at his trial and maintains he was a victim of prosecutors bent on showing they were tough on corporate crime after the Enron debacle. ``Here were these Joe Palookas from a small town, nobody knew them,' Rigas said. ``Make an example of them. They were after white-collar crime. I think we became victims of that. ``I've been painted this horrible man clear across the country,' Rigas said. ``Why would anybody have any sympathy for John Rigas or the family with what they've read and heard?' One of the prosecutors, Christopher Clark, said the Justice Department never pressured him to show it was tough on corporate crime or the Rigases in particular. ``The actions that were taken by the prosecutors were based on the outrageousness of the Rigas criminal conduct and the overwhelming evidence of their guilt,' said Clark, now in private practice at LeBoeuf Lamb Greene & MacRae in New York.

EXACTLY ! Since when did corporate America get a green light to steal shareholders' equity and get rewarded for it? HD's Nardelli? KBH's Karatz? No, these people are all "victims"....

Cash Advances - At his five-month trial in New York, prosecutors depicted Rigas as a greedy manipulator desperate for cash. They said the family looted Adelphia to buy $1.6 billion in Adelphia securities, and that he stole $51 million in cash advances. Timothy Rigas limited those advances to $1 million a month beyond his father's annual salary of about $1 million, one witness said. The Rigases, the evidence showed, spent $26.5 million in company money to buy timberland near their home and $13 million to build an Adelphia golf course on land owned by the company and the Rigases near Coudersport. Adelphia paid for antiques, family residences, a Rigas personal trainer, and a film documentary by John Rigas's daughter, witnesses said.

Blames Advisers-``We were a victim because Buchanan Ingersoll stepped away,' he said. ``We were a victim because a couple, three key senior people turned on us. We were a victim because the government needed an example that they were tough on white-collar crime.' James Brown, a former chief financial officer at Adelphia who pleaded guilty and testified as a prosecution witness, lied to jurors to lessen his possible prison term, Rigas said. ``Any suggestion that Mr. Brown did not provide truthful testimony has no basis,' said Brown's attorney, Jonathan Bach of Cooley Godward Kronish in New York. The Rigases, who spent $40 million on their legal defense, called no witnesses from Deloitte or Buchanan Ingersoll at the trial.

John Rigas says he is grateful that two of his sons will still be home to help his wife if he loses. ``If it does happen, I just hope I'm strong enough to accept it and move on and not make it hard on the family,' he said. ``Thank God that Michael and James will still be here.' He said he hopes that ``ultimately justice will prevail and we'll get a favorable ruling, but maybe that's wishful thinking. Maybe I'm not facing reality.'


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