Rigas, son charged with tax evasion

PHILADELPHIA — The founder of Adelphia Communications Corp. and his son, both already convicted of a massive fraud at the bankrupt cable-television company, have been indicted on charges they and other family members didn’t pay $300 million in taxes.

Former CEO John J. Rigas failed to report income of $143 million and his son Timothy J. Rigas, the company’s former chief financial officer, failed to report income of $239 million, according to a federal grand jury indictment unsealed in Williamsport on Friday.

“They are not above the law,” said Peter S. Alvarado, special agent in charge of the Internal Revenue Service criminal investigation division.

The two, whose high-profile arrests on television marked the start of an intensified crackdown on corporate scandals, diverted $1.9 billion from the cable company to a network of family owned companies and partnerships for personal use, authorities said.

The transfers were made to look legitimate by treating them as inter-company payments that were due or loans owed to Adelphia from private entities controlled by the Rigas family, the indictment said. The funds were never repaid but instead used personally by the two, and thus should have been taxed as income, the IRS said.

Money was spent on such things as property improvements, personal American Express bills, antique furniture and the construction of a golf course in Coudersport.

The Rigases also caused other family members not to report as well, the IRS said.