Accounting exec enters guilty plea
Published: Saturday, January 11, 2003 at 6:01 a.m.
Last Modified: Saturday, January 11, 2003 at 12:48 a.m.
NEW YORK (AP) - Apologetic and regretful, the former accounting director for Adelphia Communications Corp. pleaded guilty Friday in a cooperation agreement that will delay his sentencing until after he testifies against his former bosses.
"I deeply regret my participation in this fraud," Timothy A. Werth, 33, told U.S. District Judge Gerard Lynch in Manhattan.
Werth, 33, entered the plea a day after John Rigas, the 78-year-old founder of the bankrupt Coudersport, Pa., cable company, learned that his trial and that of his two sons would begin next January.
Werth pleaded guilty to securities fraud and conspiracy to commit securities fraud, charges that carry a combined sentence of 15 years in prison and millions of dollars in fines, though cooperation was expected to reduce any penalty substantially.
"I knew at that time that what I was doing was wrong and that I should have walked out rather than agree to participate. But I didn't and I accept full responsibility for my actions. I sincerely apologize to the people who were harmed by my conduct," Werth said.
Lynch set sentencing for Feb. 20, 2004, after prosecutors noted that a trial for John Rigas and his sons, Timothy and Michael, and another former Adelphia executive, was scheduled to begin Jan. 5, 2004. Werth is expected to testify at the trial.
Prosecutors said the men were part of one of the largest corporate frauds in U.S. history. The government said they looted corporate accounts, in part to build a golf course, as they lied to investors about the company's massive debts.
Officials say company executives secretly transferred hundreds of millions of dollars belonging to the firm into accounts controlled by the Rigas family.
At the company, Werth had reported to James Brown, the former vice president of finance.
In November, Brown pleaded guilty in the case, admitting that he manipulated and overstated earnings to fool the investment community into thinking Adelphia was doing well even as it accumulated massive off-the-book debts.
Werth said he moved from Buffalo to Coudersport in February 2000 to take a job with Adelphia that related to its Securities and Exchange Commission reporting requirements.
Later in 2000, he was promoted to director of accounting and began reporting to Brown, who reported to Tim Rigas, the company's chief financial officer. His salary grew from $90,000 to $140,000.
"I joined Adelphia with good intentions," he said. "I had no idea that Adelphia senior officials were engaged in any sort of misconduct. After I moved to Coudersport and joined the company, however, I learned that they were and I agreed to participate in some of that misconduct."
From 2000 through the start of 2002, Werth agreed with his superiors to wrongfully record certain transactions, including some fictitious ones, in Adelphia's books and records, he said.
"I knew that as a result of my actions and the actions of others, false information about Adelphia's financial condition would be published to investors here in New York City and elsewhere," Werth said. "I knew that our actions would make it seem as though Adelphia was performing materially better than it actually was performing."
He said he told prosecutors, the SEC and the company last spring that he wanted to face what he had done and cooperate.
"I understand the potential consequences of these decisions. I am trying to do what I can to help remedy the wrong that I and others committed," he said.
The government is seeking forfeiture of more than $2.5 billion for the alleged fraud and corporate looting.
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