DOJ: More Than $728 Million Of Rigas Fortune Goes to Fraud Victims
More than $728 million of the Rigas family fortune is being distributed to victims of securities fraud, the U.S. attorney for the Southern District of New York Preet Bharara said Monday.
In July 2004, John Rigas, founder and onetime chairman of the former cable MSO powerhouse Adelphia Communications, was convicted along with his son, Tim, CFO of Adelphia, of securities fraud against the public, common stock-holders and creditors.
Adelphia filed for bankruptcy in June 2006,but those stockholders were unable to recover any of the value of their stock during the bankruptcy proceedings, said DOJ.
In the wake of those convictions, the Rigas family agreed to forfeit over 95% of their assets to the government, leading to Monday's announcement of the largest single distribution of forfeited assets in the history of the Justice Department. In Adelphia's case, that included privately-owned cable systems and real estate.
The Rigas family, including members not prosecuted, agreed to give up that 95%-plus in 2005, but there were more than 13,000 petitions for funds, with about 8,500 eventually certified for a share of those funds.
Adelphia was the fifth largest cable system in the country in 2002 when its accounting irregularities and the borrowing activities of the family of founder John Rigas blew up into a scandal that rocked the cable industry.
The company was forced into bankruptcy when the capital markets were closed to it pending various investigations, then was sold off to Comcast and Time Warner in 2006, in part to help customers whose service suffered while the company focused on its mounting legal troubles. John and TImothy Rigas were sent to prison.
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.