Lawyers Open Defense in Adelphia Fraud Trial

The eldest son of Adelphia Communications Corp. founder John Rigas played no role in looting the company, lying about operations or directing a massive financial fraud, his lawyer told jurors Tuesday.

Michael Rigas, 50, former vice president of operations, had nothing to do with accounting at Adelphia, the fifth-largest U.S. cable television provider, defense attorney Andrew Levander said in his opening statements in federal court in New York.

A prosecutor Monday said Michael Rigas, his brother, Timothy, 47, and their 79-year-old father stole cash advances, made up revenue and hid billions of dollars in debt before Adelphia sought bankruptcy protection in June 2002.

“The government will not produce any credible or direct testimony that documents that Michael Rigas intentionally defrauded anybody,” Levander said in federal court in Manhattan. “They will not prove beyond a reasonable doubt that Michael Rigas was either a liar or greedy.”

The Rigases and a fourth executive, Michael Mulcahey, 46, are accused of securities fraud, wire fraud and bank fraud and of conspiring to commit those crimes. Attorneys for John and Timothy Rigas assailed the government’s case Monday, saying prosecutors unfairly accused their clients of looting.

Levander said Michael Rigas worked hard to integrate customers from six cable companies Adelphia bought in the late 1990s, boosting its subscriber base to almost 6 million from 2 million. Michael Rigas, who “doesn’t have an evil bone in his body,” was mocked in e-mails as “clueless” and “harmless” by prosecution witnesses, Levander said.

“Ask yourself whether Michael Rigas would have been charged if his last name was Smith, Jones or anything but Rigas,” Levander said.

Mark Mahoney, an attorney for Mulcahey, the company’s former director of internal reporting, used his opening statement to emphasize that prosecutors haven’t alleged he took anything beyond his salary from Adelphia.

Mahoney also stressed that many of the fraud charges turn on how the company applied complicated accounting principles.

“Your decision in many respects is going to turn on very fine points of accounting,” Mahoney said. “I’ve got to tell you, a lot of it is beyond me.”

Prosecutors called their first witness, Christopher Pelto, 40, an investor from Endicott, N.Y., who bought 5,000 shares of Adelphia stock on Oct. 12, 2001, and eventually bought 38,400 shares. Assistant U.S. Atty. Christopher Clark questioned him about a series of Adelphia financial statements that prosecutors say omitted critical information about company debt.