NEW YORK – A son of Adelphia Communications Corp. founder John Rigas pleaded guilty Wednesday to a financial crime, ending a Manhattan case that portrayed the family-run cable television business as a house of fraud before it plunged into bankruptcy.
Michael Rigas, 51, entered the plea in U.S. District Court in Manhattan to a charge of making a false entry in a company record, eliminating the need for his retrial on much more serious securities fraud and bank fraud charges.
Rigas, who now works for another cable company, was Adelphia's former executive vice president for operations.
After entering the plea, Rigas declined to comment. He was scheduled to be sentenced March 3.
Earlier this year, John Rigas and another son, Timothy, were sentenced after they were convicted of using the company's funds like a bank teller machine as they hid more than $2 billion in company debt.
John Rigas, 80, was sentenced to 15 years in prison and Timothy Rigas was sentenced to 20 years. Both are free pending appeal after their lawyers raised a novel issue of whether the government should have been required to call an expert witness to explain accounting principles to the jury.
Former Adelphia assistant treasurer Michael Mulcahey was tried with the Rigases but was acquitted of all charges.
A plea agreement signed by Michael Rigas indicated that the federal sentencing guideline range would be six months to a year in prison. Judge Jed S. Rakoff said the charge also carries a potential fine of $250,000 or twice the amount lost or gained from the crime.
Rakoff agreed with the government that the charge was a felony but defense lawyer Henry DePippo said he considered it a misdemeanor.
As he entered the plea, Rigas said he "knew it was wrong" when he certified on Dec. 1, 1999, that he had properly investigated the source of funds used to purchase Adelphia common stock when he knew that he had not.
Adelphia filed for Chapter 11 bankruptcy protection in 2002 after disclosing that it had $2.3 billion in off-balance-sheet debt.
Comcast Corp. (CMCSA), based in Philadelphia, and Time Warner Cable (TWX), a unit of Time Warner Inc., are buying Adelphia's cable assets for $12.7 billion in cash and 16 percent of the common stock of New York-based Time Warner's cable subsidiary.
Adelphia, the country's fifth-largest cable television company, has more than 5 million customers in 31 states and Puerto Rico. It was formerly based in Coudersport, Pa., but moved its headquarters to Greenwood Village, Colo., in the wake of the scandal.
Last month, John and Timothy Rigas were indicted in Philadelphia on charges they and other family members didn't pay $300 million in taxes. Michael Rigas, who was not charged, did not report $239 million in taxable income, according to the indictment.