John Rigas: The Adelphia Scandal

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John Rigas and his family are the centerpiece of the Adelphia scandal, which is regarded as one of the most elaborate and extensive accounting frauds in history. In 1952, the founder John Rigas purchased a cable company for three hundred dollars. Twenty years later, he created Adelphia Communications corporations and the company went public. With the help of his family, it eventually grew to be the nation’s 6th largest cable company. John’s sons Timothy, Michael, James and Peter all held executive positions in the company and were members of the board of directors. Timothy and Michael served as Adelphia’s CFO and COO, respectively. This gave the Rigases majority in both the voting stock and on the board. Adelphia was effectively controlled by the Rigas family. …show more content…

His family were often describes as down to earth people, yet the Rigas family lived a lavish lifestyle. Their riches allowed them to acquire “a professional hockey team, an African safari, the use of three private jets, and swanky vacation homes in hot spots like Cancun, Mexico” (Hudson). Other outlandish expenditures included the construction of a private golf course, the order of fresh Christmas trees to be flown to New York, and the purchase of parcels of land outside of their estate in order to keep their view. The Rigases were able to afford all of this by illegally tapping into corporate funds. By keeping Adelphia within the family’s control, they were able to use the corporation to issue the family personal loans. They also commingled the family’s money with Adelphia’s to fund non-corporate projects. The Rigases were able to acquire all of the aforementioned real estate property by using Adelphia’s funds, which were not the Rigases to spend. As a publicly traded company, the Rigases were essentially using the shareholders’

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