Adelphia family on fraud charges

JOHN Rigas, founder of Adelphia Communications of the US, and his sons Timothy and Michael were today charged with conspiracy to commit securities fraud.

A criminal complaint filed in New York Federal Court alleged that Rigas, who founded the company 50 years ago, and his family 'looted Adelphia on a massive scale, using the company as the family's personal piggy bank'.

Adelphia, one of the first companies to be hit by an accounting scandal, was forced into bankruptcy in March after it revealed it had guaranteed $3bn (£2bn) in loans to the Rigas family that were not reported on its balance sheet.

The family allegedly borrowed $1.8bn from the company to buy shares and bonds and then used corporate funds to cover margin calls when the share prices dropped. The company also allegedly guaranteed loans the family took out for personal expenses, including building a golf course.

The Rigas family lost control of the firm when creditors discovered the extent of the double-dipping. John Rigas was chairman of Adelphia, his son Timothy was chief financial officer and several other family members were directors. On Monday, the board accepted the resignation of Rigas and his sons, who built the firm into the sixth-largest US cable company.