John Rigas, the founder of Adelphia Communications received the news this week that he has been sentenced to 15 years in prison in relation to fraud charges brought by the SEC. More on his sentencing via The Epoch Times:

On Monday, the US District Court in New York sentenced the 80-year-old Rigas for conspiracy and fraud that eventually drove the nation’s fifth-largest cable provider to bankruptcy. His son and former Chief Financial Officer, Timothy Rigas, was sentenced to 20 years in prison for his role in the case. Judge Leonard Sand ordered both men to be surrendered to prison by September 19...

...In one of the harshest sentences for white-collar crime, prosecutors are sending a clear message to corporate executives that the US government is serious about maintaining the integrity of its financial markets. This case will likely mean a lifetime sentence for the elder Rigas, who, at 80 years of age, is suffering from bladder cancer.

Rigas’ attorneys had asked for leniency during the trial, citing philanthropy, to which Judge Leonard Sand replied, “To be a great philanthropist with other people's money really is not very persuasive.” However, John Rigas’ age was taken into consideration for this sentence, and his prison time may be cut short if his health continues to deteriorate.

Read the full article here.

Rigas and his son Timothy were both convicted last year for misappropriatingating some $100 million from Adelphia for personal use. From the Washington Post:

"This is a tragedy lacking in heroes," the judge said. Adelphia prosecutors had accused the Rigases of using complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing about $100 million for themselves.

They were accused of spending the money on a lengthy list of personal luxuries. Prosecutors said John Rigas had ordered two Christmas trees flown to New York for his daughter at a cost of $6,000, ordered up 17 company cars and had the company buy 3,600 acres of timberland at a cost of $26 million to preserve the view outside his Pennsylvania home.

Worse still for investors, the company collapsed into bankruptcy in 2002 after it disclosed a staggering $2.3 billion in off-balance-sheet debt that prosecutors said was deliberately hid by the Rigases.

The full Post article can be read here.

Rigas, who launched Adelphia in 1952 with a $300 investment now resides amongst the infamous collection of publicly pilloried corporate executives who have seen their fast and loose approach to financial regulations come back to haunt them. Several executive sentences are up in the air right now (Bernie Ebbers, Richard Scrushy, Dennis Kozlowski) and several high-profile trials are still pending (those Enron boys, for one).

-- MDT

Labels: 2006, Dennis Kozlowski, Enron, Health South