John Rigas – Adelphia Communications
He spent shareholders' money like a king. His empire went bankrupt.
John Rigas founded cable TV giant Adelphia in 1952 in Coudersport, Pa., and turned it into his family’s piggy bank.
Prosecutors alleged that he took as much as $1 million a month in cash withdrawals from Adelphia. These transactions weren’t documented, nor did Rigas sign any papers promising to pay it back.
On and on the looting went.
He used Adelphia funds to acquire the Buffalo Sabres hockey team.
He set out to build a 1,000-acre golf course on his own land for $15 million.
He bought 3,600 acres of timberland.
He and his sons used $1 billion in company funds to buy Adelphia stock for themselves. Then they borrowed $250 million in cash to cover margin calls when the stock price plunged.
Rigas’ daughter got $3.7 million to set up two film production companies.
Rigas’ son-in-law got $65 million to fund his own venture capital firm. Rigas’ wife’s interior decorating company got a $371,000 order.
He spent $6,000 flying Christmas trees to his daughter in New York.
All the while, Adelphia was cooking the books to hide more than $3 billion in unrecorded debts owed by the Rigas family. The Securities and Exchange Commission called it “one of the most extensive financial frauds ever to take place at a public company.”
Adelphia filed for bankruptcy in 2002. Comcast and Time Warner Cable bought it in pieces for $17.6 billion in 2006.
Rigas was sentenced to 15 years in prison, but he was released due to his declining health after nine years. His son, Timothy, received a 20-year sentence, but has also been released. His other son, Michael, received 10 months of home confinement.
Rigas claimed Adelphia’s bankruptcy filing was misunderstood and that he was a victim of an aggressive corporate prosecution in the Enron era.
“It was a case of being in the wrong place at the wrong time,” he said in a 2007 interview with USA Today. “If this had happened a year before, there wouldn’t have been any headlines. … There was no fraud.”
His defense attorney, Mark Mahoney, did him no favors when he resorted to an imperious analogy before the jury.
“John Rigas was a king,” he told jurors. “His sons were the princes. When the time came for blaming, all the fingers were pointed at them and they were overthrown. It wasn’t regicide, it was Rigas-cide.”