Prosecutor: From slippers to golf course, family made Adelphia `private piggy bank'

NEW YORK (AP) _ Adelphia Communications Corp. founder John Rigas and his two sons siphoned millions from the nation's fifth-largest cable company as if it were a ``private piggy bank,'' making

Monday, March 1st 2004, 12:00 am

By: News On 6

NEW YORK (AP) _ Adelphia Communications Corp. founder John Rigas and his two sons siphoned millions from the nation's fifth-largest cable company as if it were a ``private piggy bank,'' making it pay for everything from bedroom slippers to a new golf course, a prosecutor told the jury Monday.

Assistant U.S. Attorney Richard Owens pointed at each defendant, accusing them all of stealing from the company without regard to other investors, including pension funds, mutual funds and people who believed the company was an investment gem.

Charges of conspiracy, securities fraud and bank fraud were supported by boxes of evidence in a ``case about lies and greed,'' Owens told the jury during opening statements.

He said the Rigases stole hundreds of millions of dollars from 1999 until 2002, when the fraud was revealed and the company was forced to undergo bankruptcy reorganization.

The prosecutor acknowledged that the family was among the pioneers in the cable television industry but said it traded on that goodwill to fool investors, ``cooking the books'' to make it appear it was investing $1.5 billion when it was not.

``The Rigases used Adelphia as their private piggy bank,'' Owens said.

He accused Rigas, the 79-year-old patriarch, of making the company pay for expenses as small as massages and said he took $100,000 from the company whenever he wished.

``No expense was too large or too small for John Rigas to shift from his personal pocketbook to shareholders,'' Owens said.

Rigas' son and co-defendant Timothy Rigas, then the company's executive vice president and chief financial officer, forced Adelphia to pay $700,000 for his membership in a golf club and later had the company invest $13 million to build a golf course, Owens said.

He said Timothy Rigas once became so enamored with a pair of hotel slippers that he insisted the company pay whatever it must to get them for him _ even when it was learned that the slippers were sold by the distributor only in bulk.

``So Adelphia bought Tim Rigas 100 pairs of bedroom slippers,'' Owens told the jury.

The prosecutor said the other son on trial, Michael Rigas, a Harvard-trained lawyer and then the company's executive vice president, also stole hundreds of thousands of dollars.

Owens said that the fourth defendant, Michael Mulcahey, facilitated much of the theft in his role as assistant treasurer in charge of bank accounts and financial activity.

Their trial is expected to last three months. Their lawyers were to begin delivering opening statements later Monday.

The Greenwood Village, Colo.-based company has 5.3 million cable subscribers in more than 30 states. The government alleges the defendants boosted profits by hiding more than $2 billion in debts from investors. The trial is in Manhattan, where many of the alleged false financial reports were filed with securities regulators.

The company recently filed a proposed reorganization plan in bankruptcy court after securing $8.8 billion in financing from four large banks. Executives said they hoped to emerge from bankruptcy court this year.