John Rigas, cable television executive who went to federal prison for fraud, dies at 96

By Jia Lynn Yang,

John J. Rigas, who built Adelphia Communications into the sixth-largest cable company in the country and whose 2007 jailing for stealing millions of dollars from the firm made him a prominent case of corporate fraud and excess, died Sept. 30 at a hospital in Coudersport, Pa. He was 96.

The death was confirmed by William Brennan of the Thomas Fickinger Funeral Home in Coudersport. The cause was not disclosed.

Mr. Rigas, who at one time owned the Buffalo Sabres hockey franchise, served nine years of a 15-year sentence for securities fraud, convicted of what the Securities and Exchange Commission called “one of the most extensive financial frauds ever to take place at a public company.” He was granted compassionate release from the Allenwood federal prison in 2016, when he was 91 and was said to have terminal cancer.

It was a stunning and humiliating fall for Mr. Rigas. As the son of Greek immigrants, he founded his cable business for $300 in 1952 and boldly transformed a shoestring operation in the northern central Pennsylvania town of Coudersport into a corporate juggernaut. He was heralded as an industry pioneer, having gambled on the potential of cable long before Comcast and other major corporate players dominated the market.

Over time, he brought his three sons, Timothy, Michael and James, in the business and extended Adelphia Communications into New York, New Jersey, Florida and California. Mr. Rigas made his riskiest acquisition for the company in 1999, paying $5.2 billion for Century Communications, the largest cable television provider in Los Angeles at the time.

The deal doubled the size of Adelphia overnight, and the company boasted 5.6 million customers in 30 states. But within a few years, amid corporate scandals that engulfed such other firms as Enron, Adelphia collapsed after regulators began investigating shady accounting practices at the firm.

The downfall of Adelphia — and of Mr. Rigas — began in 2001 with a startling revelation for shareholders. Adelphia said in a footnote to an earnings release that it had $2.3 billion in off-balance-sheet loans to the Rigas family. The SEC then began investigating the company.

The value of Adelphia stock plunged and in May 2002, Mr. Rigas stepped aside as chairman, president and chief executive, citing the need for “fresh, independent leadership.” A month later, the company filed for bankruptcy.

As investigators began digging, they found that Adelphia had overstated its subscriber growth and earnings. They accused the Rigas family of tapping company funds to buy Adelphia stock, build a golf club for $12.8 million, and buy luxury condominiums in Colorado, Mexico and New York City.

A five-month trial included testimony that revealed more profligate spending. According to prosecutors, the family spent $6,000 to fly a Christmas tree to New York City, and there was a $40,000 charge for a personal masseuse for the family. Prosecutors said the Rigases treated Adelphia like “their own ATM.” In all, Mr. Rigas and his family were accused of looting hundreds of millions of dollars from the firm.

In 2004, Mr. Rigas and his son Timothy, who had acted as Adelphia’s chief financial officer, were each found guilty on 18 felony counts of conspiracy, bank fraud and securities fraud. Prosecutors had charged them with hiding billions of dollars in debt and lying to investors about the firm’s financial health as it was trying to expand and upgrade its cable systems.

After losing his final appeal in 2007, Mr. Rigas entered federal prison. Timothy Rigas was sentenced to 20 years but was released in 2019. Michael Rigas was found not guilty of conspiracy and wire fraud, and a mistrial was declared on charges of bank fraud and securities fraud against Michael.

At his sentencing, Mr. Rigas called himself a “little guy who started from nothing.” He added, “I may be convicted and sentenced, but in my heart and conscience, I’ll go to my grave really and truly believing I did nothing but try to improve conditions for my employees and family.”

John James Rigas was born Nov. 14, 1924, in Wellsville, N.Y., above his parents’ restaurant. After Army service in World War II, he graduated in 1950 from Rensselaer Polytechnic Institute in Troy, N.Y. His father asked him to consider working at the family restaurant in Wellsville, and Mr. Rigas tried it for nine months before deciding it was not for him.

A friend told him about a movie theater for sale in Coudersport, a town just across the state border in Pennsylvania. Mr. Rigas bought the theater for $72,000 with money borrowed from his father and friends. Deep in debt, Mr. Rigas worked during the day as an engineer at Sylvania, an electrical products manufacturer, then hurried back each night to run his theater.

As television was gaining popularity in the early 1950s, Mr. Rigas learned that some towns in western Pennsylvania were about to be wired for cable television. But to become a cable provider, Mr. Rigas needed a license.

He bought the license from a hardware store owner in Coudersport for $300, overdrawing his bank account. He then acquired more rural cable businesses in nearby towns, often borrowing huge sums to pull off the risky deals. “Well, Angie,” he told his secretary, according to Fortune magazine, “I’m either going to become a millionaire or I’m going to go bankrupt.”

Not long after that gamble, in 1953, he married Doris Nielsen, whom he’d met on a blind date during college. She died in 2014, while Mr. Rigas was still in prison. Survivors include his three sons and a daughter.

As Adelphia grew, Mr. Rigas showered Coudersport with largesse. He flew terminally ill patients to hospitals using Adelphia’s jets. He transformed abandoned buildings, including an old high school and a silk mill, into Adelphia offices. He used also money from Adelphia to buy a share of the Buffalo Sabres in 1994 for $15 million and became the club’s principal owner in 2000. After Mr. Rigas’s downfall two years later, the National Hockey League assumed control of the team, which the Rigas family had left with $150 million in debt in the form of a loan from Adelphia.

After Mr. Rigas and his son were found guilty, Adelphia set a $715 million fund in 2005 to help investors recoup their money. Later that year, Time Warner and Comcast purchased the company for $17.6 billion.

In 2008, Mr. Rigas and Timothy Rigas won a three-year reduction in their sentences after arguing before an appeals court that their verdicts reflected a “post-Enron hysteria.” Mr. Rigas also petitioned unsuccessfully for a pardon from President George W. Bush in January 2009.

Years before the scandal tarnished Mr. Rigas’s reputation, he compared his life in business to his days in high school playing football. It was about risk. “You’d take the ball and you get banged and smeared,” he said.

“And you go back in the huddle, take that ball again, and maybe not do too good, but every once in a while there was an opening,” Mr. Rigas said in a 1989 oral history interview for the Cable Center. He continued, “You took the ball and lots of times it hurt. There was no gain and lots of times there were some losses, but you went and picked it up again.”

Matt Schudel contributed to this report.