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Saturday, June 15, 2024 | Back issues
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Court Backs Sentences of Adelphia Founder & Son

(CN) - The 2nd Circuit upheld the prison sentences of Adelphia Communications founder John Rigas and his son Timothy, who were convicted in 2004 of looting the cable television company and concealing more than $2 billion in debt. Adelphia filed for bankruptcy in 2002.

A three-judge panel in Manhattan decided Monday the sentences were "procedurally and substantively reasonable."

The Rigases' lawyers argued that murderers and terrorists have been sentenced to slightly more or less years than the "white-collar" criminals.

Judge Jose A. Cabranes, writing for the court, noted that while the sentences were long, they were far shorter than the life imprisonment the guidelines call for.

John Rigas, Adelphia's former CEO, and Timothy, former CFO, were sentenced to 15 years and 20 years, respectively. They were convicted of conspiracy, bank, wire and securities fraud.

A second Rigas son, Michael, was acquitted of conspiracy and wire fraud, and later pled guilty to making a false entry in Adelphia's books.

John and Timothy's 2007 appeal was upheld on 17 of 18 counts, with a single count of bank fraud being dropped for insufficient evidence. There was enough proof, however, to uphold a related bank fraud count.

U.S. District Judge Leonard B. Sand decided the bank fraud count was a "small part of the overall conviction and ran concurrently" with the related charge. And that the reversal of the one count did not alter "the seriousness of the[ir] ... crimes, nor the suffering which their conduct inflicted on so many people."

Judge Cabranes noted that despite there being "no basis for a reduction," the district court applied a "minimal adjustment," reducing each sentence by three years.

But the Rigases said Judge Sand should have reevaluated the guidelines, such as the alleged loss from their crimes, before resentencing the pair.

They also appealed the district court's denial to grant a new trial based on supposed "newly discovered evidence."

They argued that the testimony of James Brown, Adelphia's former VP of Finance-turned government witness, contradicted his testimony at the subsequent civil trial.

The court compared the two sets of testimony and found they were "largely consistent and did not indicate any perjury."

The 2nd Circuit ruled that the case did not need to be remanded to district court because the reversal of the single count was more akin to a "sentencing error" than a "conviction error."

The court decided the stiff guidelines called for in white-collar cases "reflect[ed] Congress' judgment as to the appropriate national policy for such crimes."

The Rigas family was accused of using Adelphia as their private piggy bank. They allegedly stole more than $200 million to pay off personal expenses, which ranged from paying for 100 pairs of bedroom slippers for Timothy Rigas to investing $3 million to produce a film directed by John's daughter, Ellen Rigas.

The family was also accused of buying a Gulfstream III jet with company funds and using it as their personal taxi service.

Timothy purportedly charged Adelphia to fly him and a golf pro to California to play Pebble Beach Golf Links. Also, the family regularly used the jet to fly to New York City, and to watch the Buffalo Sabres hockey team, then owned by the Rigas family.

The missing money "was obscured" by the commingling of cash between Adelphia and the Rigases' privately-held companies, according to the government.

At the time of its collapse, Adelphia was the fifth-largest cable provider in the country.

Time Warner Cable and Comcast acquired the majority of its assets in 2006.

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