Second Adelphia Man Pleads Guilty To FraudJan 10, 2003 | FT.com
A second former Adelphia Communications executive on Friday pleaded guilty to criminal charges related to the US governmentâ€™s ongoing fraud case against members of the cable television companyâ€™s founding family.
Timothy Werth, Adelphiaâ€™s ex-director of accounting, pleaded guilty to securities fraud and conspiracy to commit securities, wire and bank fraud in Manhattanâ€™s federal court.
His plea piles further pressure on John Rigas, Adelphiaâ€™s founder, his sons Michael and Timothy, and Michael Mulcahey, a former company executive, who have all pleaded not guilty to charges of fraud and conspiracy to defraud Adelphia investors and creditors out of billions of dollars. Last November James Brown, Adelphiaâ€™s former vice-president of accounting and superior of Werth, pleaded guilty to the charges.
The Adelphia case, which is a key element of the US governmentâ€™s crackdown on recent corporate scandals, is set to go to trial on January 5, 2004, in New York.
The indictment against the defendants, who were arrested last July, accuses the men of using Adelphia as â€œthe Rigas familyâ€™s personal piggy bankâ€œ and abusing perks such as using the company jet for a family safari.
In particular, the men were charged with attempting to conceal the true performance of Adelphia through â€œsham transactionsâ€œ and artificially inflated earnings when the company had failed to meet Wall Street expectations and was struggling under a growing debt burden.
Both Mr Brown and Mr Werth have agreed to co-operate with federal prosecutors in the case against the remaining defendants, who face up to 15 years in prison if convicted.
Lawyers for the Rigas defendants on Thursday said they would put forward a motion to have the trial moved to Pennsylvania, where Adelphia is based and the Rigas men live on the family estate. They claimed the men would face an unfair hearing in New York, where several high-profile corporate scandals have been brought to court.
Adelphia is the sixth-largest cable group in the US with about 5m customers. It filed for Chapter 11 bankruptcy last June with $20bn in debt after defaulting on $7bn in loans.