Adelphia Exec Says He Warned Rigases

A former finance vice president at Adelphia Communications Corp. testified Monday that he was demoted after warning founder John Rigas and his son Timothy that they spent too much company money on personal expenses a decade ago.

LeMoyne Zacherl told jurors at the New York fraud trial of John Rigas, 79, and sons Timothy, 47, and Michael, 50, that he had complained within days of his 1993 hiring about family spending on condominiums, limousines and farm workers.

Adelphia, the No. 5 U.S. cable television company, could barely pay bills and needed to stop transferring cash to John Rigas, Zacherl said.

“Tim and I discussed these, and we reached the same conclusion -- that they were not appropriate, they did not benefit the company, they did not have board approval, there was a cash shortage, and we should not be doing them,” Zacherl testified.

Prosecutors say the Rigases used Adelphia as a “private piggy bank” from 1999 until its bankruptcy filing in 2002. The Rigases also are accused of hiding billions of dollars of debt, stealing $100 million and lying about revenue.

Zacherl, 50, said Adelphia routinely took bank loans on the last day of financial quarters to boost its cash and repaid the loans at the start of the new quarter. He said he put in place new controls and tried to stop cash transfers to John Rigas.

Zacherl also barred Doris Rigas, John’s wife, and Ellen Rigas, his daughter, from writing Adelphia checks. John Rigas called and was “quite upset” about the changes, Zacherl said.

“He had asked if I was trying to bankrupt him,” Zacherl said. “I said, ‘No, John, I’m not trying to do that.’ ” He told Rigas: “We have to get this straight. This is a public company.”