Federal Judge Kimba Wood on Friday ordered the release of former Adelphia Communications chairman John Rigas from federal prison, a move that would allow the 91-year-old former cable executive to die at his home.
Rigas and his son Timothy – Adelphia’s former chief financial officer – were tried and convicted on several charges of fraud and conspiracy in 2004. The two were accused of using the company as the Rigas family’s personal piggy bank. Another son, Michael Rigas, also was tried at that time but the jury could not reach a verdict; he later pleaded guilty to lesser charges and sentenced to two years' probation.
The Rigases were accused of using hundreds of millions of dollars of Adelphia funds for their own personal use and for taking out $2.3 billion in loans — for which the MSO was liable — to buy Adelphia stock.
The indictments and convictions rocked the cable industry, coming at a time of overall hysteria over so-called “off-balance sheet debt” a major factor in the fall of energy giant Enron. Throughout the trial the Rigases were shown to have used company funds for items as small as John Rigas’ subscription to the Columbia House record club, to larger expenditures for condos and to build a golf course in their headquarters town of Coudersport, Pa. One expenditure in particular made headlines – the $6,000 the company spent to fly two Christmas trees to Rigas’ daughter Ellen’s New York apartment.
Adelphia’s revelation on a 2002 earnings conference call that it had $2.3 billion in off-balance sheet debt touched off a firestorm that ultimately ended in the bankruptcy and sale of the company as well as the indictment of its executives. Adelphia was sold to Comcast and Time Warner Cable in 2006 for $17.6 billion.
In all four Adelphia executives were indicted – John Rigas, Tim Rigas, Adelphia chief operating officer Michael Rigas and assistant treasurer Michael Mulcahey. Mulcahey was found not guilty and Michael Rigas was sentenced to two years probation after pleading guilty to a lesser charge of signing false documents after his trial on securities and wire fraud ended in mistrial.
Rigas had been diagnosed with bladder cancer before he was sentenced in 2005 – it was one of the reasons he wanted to be sent to a federal facility in Minnesota, near the Mayo Clinic where he had received treatment in the past. That request was denied and Rigas and his son were sent to a federal facility in North Carolina to serve out their terms.
Rigas’ condition has since been changed to terminal – reports say he has Stage IV bladder cancer that has metastasized to his lungs and that he has six month or less to live
RELATED:Fall of the House of Rigas: a Timeline.
Rigas had been serving a 12-year sentence (it was originally 15 years but was reduced after some federal charges were dropped) but Wood reduced it to time served. In a statement, John Rigas's attorney Lawrence McMichael confirmed reports he will be released.
"Last night a federal judge in NYC signed an order shortening John's sentence to time served," McMichael said in a statement. "His release has been ordered. I can't say exactly when he will go home but it should be in the next couple of days. Tim remains in custody. He is at the prison camp in Waymart, PA."
