The U.S. Supreme Court rebuffed appeals from former Adelphia Communications executives John and Timothy Rigas to overturn their fraud convictions.
The Rigases were convicted on fraud and conspiracy charges in 2004 stemming from an accounting scandal that sent the cable company into bankruptcy and eventually to the auction block.
Adelphia co-founder and former chairman John Rigas was sentenced to 15 years in prison (he had that term earlier reduced to 12 years) and his son former Adelphia chief financial officer Timothy received a 20-year sentence (later reduced to 17 years). Both men are currently jailed at the Butner Federal Prison in North Carolina. Adelphia was sold in 2005 to Time Warner Cable and Comcast.
It was strike two for the Rigases at the Supreme Court. In March 2008, the court declined to hear their claim that the government "was required to prove that petitioners had violated Generally Accepted Accounting Principles or to call an expert accounting witness in order to convict them of securities fraud and conspiring to commit securities fraud."
The former Adelphia executives had sought Supreme Court review of a ruling by the U.S. Court of Appeals for the Second Circuit upholding the conviction.
They argued that the lower courts had ignored and withheld exculpatory evidence and expert testimony; did not make exculpatory evidence in a parallel SEC investigation available to the defense; and based the sentences on factors beyond the executives' control.
The Rigases argued that the Second Circuit court had violated their "fundamental rights to be treated fairly and to receive a sentence based on 'empirically verifiable' monetary losses.
The court had calculated shareholder losses from the Rigas' fraud at $100 million and based the sentencing accordingly.
The pair said that figure was based on speculation and media accounts.
They also argued that the government's dismissing of expert testimony had deprived them of potentially exculpatory
evidence from Adelphia's outside counsel.
The Rigases had support for their argument over the sentences from a number of prominent cable figures. In an amicus brief, Cablevision Systems chairman Charles Dolan, Charter founder and former chairman Barry Babcock, C-SPAN founding chairman Robert Rosencrans and former cable moguls H.F. ("Gerry") Lenfest and Alan Gerry said they were concerned about the "arbitrary" nature of the sentencing.
They said the court had handed out lengthy criminal sentences based, "vaguely," on a decrease in the stock price without requiring any proof that the Rigas' conduct caused the decrease.
"Allowing prohibitively lengthy criminal sentences to be based in part on stock price movements unrelated to the offense conduct erodes respect for the fairness of the sentencing process," they said in the brief, "and therefore undermines the deterrent effect of the laws underlying those sentences."
The National Association of Criminal Defense Lawyers also wanted the high court to take the case and resolve the issue of what obligation the government had to produce evidence from a parallel investigation or to give it evidence the government assumes it should already have.
The government is not required to offer the defense exculpatory evidence it already knows about, but the defense lawyers said the Rigas case raised the issue of whether that extends to evidence the Rigas' perhaps should have known -- because it came from their company's own outside counsel -- but did not.
"Defendants often rely on the government's obligation under Brady to disclose exculpatory evidence," the defense said. "If Brady does not apply when the defendant could have uncovered the exculpatory evidence on his own, defendants must conduct more extensive investigations either to discover the evidence themselves or to erase any doubt that they could have discovered the evidence through reasonable efforts without the government's."
The resolution of those issues will have to wait for another day.
The Supreme Court did not say why it did not take the case--as is its practice with denying cert--simply listing it among pages of mostly one-line denials.
