Grand jury indicts Adelphia bosses

A federal grand jury in Manhattan today indicted Adelphia Communications founder John Rigas, as well as his sons Timothy and Michael, on charges that they looted the nation’s sixth largest cable systems provider for personal gain.

The indictment replaces a criminal complaint, filed July 25 when the three Rigases were arrested, that alleged they used company funds for everything from personal loans to constructing a golf course.

John Rigas issued a statement via his New York City-based law firm that predicted “a far different story will emerge than the one that has been reported to date” as the legal process continues to unfold. Among his claims are that the co-borrowing agreements on which the indictment focuses were “legal and entirely proper.”

The statement further said the transactions were “entered into with some of the largest banks in the U.S.; negotiated by Adelphia’s outside counsel; approved and ratified by Adelphia’s outside directors; audited by its independent accountants who concurred with its treatment in Adelphia’s financial statements; and disclosed in Adelphia’s public filings.”

The 77-year-old Rigas founded Adelphia in 1952. The current charges--and accompanying scandal--have “irreparably damaged” his corporate and personal reputation, he said in the statement.

“My family and I have always acted with integrity and honesty and are committed to restoring our credibility and that of Adelphia,” the statement concluded.

The financial scandal started unraveling during Adelphia’s earnings conference call in March. The Rigases resigned board and executive positions within days of each other in May and Adelphia filed for Chapter 11 bankruptcy protection June 25.

Rigas and his sons also have been named as defendants in more than 40 civil lawsuits, including one the company filed the day of their arrests. The company also obtained a temporary restraining order Aug. 27 from U.S. Bankruptcy Judge Robert E. Gerber that barred Rigas or family members from selling any real estate until it could be determined whether Adelphia held part ownership.

The Adelphia executives are also the targets of a civil complaint by the U.S. Securities & Exchange Commission for similar charges.