Two former executives of bankrupt cable television provider Adelphia Communications Corp. reportedly were arrested along with two other people Wednesday morning on conspiracy charges.
Company founder and former chairman and CEO John Rigas, his son and former company chief financial officer Tim Rigas and the two others were taken into custody by postal inspectors and were to appear in federal court in Manhattan later in the day to be formally charged with conspiracy to commit securities fraud, CNBC reported.
Attorneys for John and Tim Rigas did not immediately return requests for comment Wednesday morning.
Adelphia, the nation's sixth-largest cable company, filed for bankruptcy protection last month following months of turmoil after the company revealed billions of dollars in off-balance-sheet debt -- much of it owed by the founding family.
The Securities and Exchange Commission is investigating the company's accounting. Federal grand juries in New York and central Pennsylvania are probing the company's finances.
The Rigases resigned their executive positions with the Couldersport, Pa.-based company in May. Later that month, the family agreed to turn over $1 billion in assets to help cover loans, to turn over $567 million in cash flow from other cable companies the family owns, and to pledge all stock held by the family as collateral. Adelphia estimates it is liable for $3.1 billion in family debts.
Adelphia said the Rigas family used the company's cash or assets to help it buy and operate the Sabres, expand personal cable company holdings, acquire timberland and invest in a golf course, and that many of the deals weren't approved by the board. The company said it was investigating the family's use of company jet airplanes, condominiums and apartments.