Tax charges for Adelphia founder

US cable TV group founder John Rigas – convicted of fraud and conspiracy last year – has been indicted with new charges of tax avoidance.

Mr Rigas and his son are facing charges of taking part in a $300m (£170m) tax evasion scheme, prosecutors said.

The Adelphia Communications founder is currently appealing against his conviction for the firm’s collapse.

Adelphia went bust in 2002 with debts of $7bn (£3.77bn) after the Rigas family used it to fund their lifestyle.

According to federal court documents, 80-year-old Mr Rigas is now facing allegations that he failed to report income of $143m.

His son Timothy – former chief finance officer at Adelphia – is also facing claims that he failed to declare income of $239m.

Mr Rigas and son have been charged by a federal grand jury in Pennsylvania of one count of trying to defraud the US government, as well as separate tax evasion violations in the three years of 1998-2000.

The pair diverted $1.9bn from the company to a network of family owned companies and partnerships for personal use, the Internal Revenue Service (IRS) criminal division said.

The transfers were made to look like business transactions, by treating them as inter-company payments or loans; however the funds were never repaid to Adelphia.

Instead the money was used personally by the two, and therefore should have been taxed as income, the indictment added.

If the men are found guilty it will be one of the biggest cases of personal income tax evasion in the US, they could also face up to 20 years in jail and a fine of up to $1m.

Lawyers for the pair were unavailable for comment.

Last year, John and Timothy Rigas were found guilty of 15 counts of securities fraud, two of bank fraud and one of conspiracy. Mr Rigas senior was sentenced to 15 years jail and his son 20 years.

Both men are currently free on bail as they appeal against their convictions.

The case was less high-profile than auditing scandals that brought down energy trading firm Enron and telecoms giant Worldcom, and centred on private extravagance.

However, during the New York trial prosecutors accused the Rigas family of using Adelphia as their “personal ATM”.

The elder Mr Rigas co-founded Adelphia Communications in 1952 and grew it into the fifth biggest US cable TV operator, until it collapsed under billions of dollars of debts.

In April this year US media giants Time Warner and Comcast have agreed to buy the bankrupt cable firm $17.6bn.