Post-Script on Corporate Scandal: Where are they now?

[Roland99]

http://www.legalzoom.com/articles/article_content/article12963.html

Adelphia Communications: The Rigas clan certainly knows how to have a good time and live well. John Rigas and his sons in fact were charged with multiple counts of fraud and conspiracy after using $2.3 billion in company “loans” to finance their lifestyle. Though the senior Rigas and his son Timothy were found guilty, Michael’s trial ended in a jury deadlock. Sentencing – John and Timothy face a maximum of 30 years - will not occur until the charges against Michael are resolved.

Enron:The fall-out is still reverberating three years later. Conspirators include not only Enron’s CEOs but also execs from Arthur Andersen and Merrill Lynch. The tangled charges of conspiracy, fraud, and obstruction of justice all stem from schemes to cook the books so that profits looked high. Why? So executives could line their pockets before the company tanked in 2001 when Enron lost $68 billion in market value. The real losers: employees and investors. Five thousand employees lost their jobs, and $800 million in pension investments went up in smoke. The sheer scale of the fraud led the Justice Department to set up an Enron Task Force. More than 30 people have been charged. Fourteen have pleaded guilty.

Arthur Andersen,auditor for Enron,was convicted of tampering and destroying evidence while the SEC was investigating their client Enron. Though Andersen’s lawyers argued that shredding documents was routine housekeeping, the company was eventually convicted of obstruction of justice in July 2004. The result: Andersen was sentenced to the maximum $500,000 fine and five years’ probation. The company has since dropped after leading the pack as one of the world’s big five accounting firms. A company that once employed 28,000 people has whittled its numbers down to 250 employees, mostly dedicated to litigation and to operating a training center.

Merrill Lynch & Co. Four Merrill Lynch executives were convicted of fraud on November 3, 2004 after the U.S. government discovered that Enron’s “sale” of energy generating barges to Merrill Lynch was a disguised loan “cooked up” to look like $12 million in profit. The real cost? Investors lost over $13 million. The four execs face up to 12 years in prison. Sentencing is scheduled for March 2005.