Opinion ID: 2725
Heading Depth: 2
Heading Rank: 4

Heading: The Scheme to Defraud Adelphia's Bank Lenders

Text: 32 The jury convicted Timothy and John Rigas of conspiracy to commit bank fraud and two substantive counts of bank fraud related to two of the three Co-Borrowing Agreements. 9 The Co-Borrowing Agreements 10 required minimum leverage ratios of debt to EBITDA 11 and tied interest rates to this leverage ratio. The government argued to the jury that the EBITDA manipulations resulted in lower interest payments to the banks than if the EBITDA had been accurately reported. The EBITDA manipulations were carried out at the level of the Adelphia parent company as described above. In addition, when Brown, Timothy Rigas, and Michael Mulcahey (a co-defendant of the Rigases who was Adelphia's Assistant Treasurer) determined that the EBITDA of particular borrowing groups (the Adelphia and RME entities in each Co-Borrowing Agreement) was not high enough, expenses would be moved between the subsidiaries and affiliate or interest income would be transferred from one internal company to another. 33