Eventually, you reap what you've sown. Most of us learned that way back in kindergarten, but some headline-grabbing examples of corporate fraud may have us wondering, from time to time, whether the bad always get their just reward. Lately, thankfully, the answer seems to be "yes."
Weeks back, justice caught up with Bernie Ebbers, ex-CEO of WorldCom, now MCI
Yesterday, a couple of previously convicted members of the Rigas clan received their just rewards. Former CEO John Rigas received a 15-year sentence and his son Timothy got 20 years for their roles in steering Adelphia Communications into bankruptcy. The Rigases engaged in a host of accounting frauds, including hiding debt and inflating margins by capitalizing costs that should have been expensed. The remaining bits of the firm will be acquired by Time-Warner
While I don't want to take too much joy in the prospects that an old man with failing health will spend a good portion of his final years behind bars, it's tough to think of many people more deserving.
Not only did the Rigas clan divert shareholder money for its own enjoyment -- as when Adelphia purchased timberland in order to preserve the pretty views from the Rigases' picture windows -- but the elder Rigas showed a remarkable lack of contrition in the courtroom yesterday, as illustrated by a great AP story.
"If I did anything wrong, I apologize," John Rigas told the court. Translation: I don't think I did anything wrong. This is exactly the kind of non-apology that proves his only regret was getting caught. Never mind that shareholders lost billions of dollars. Rigas would like us to believe that the story should be about the weepy-eyed hometown hero on the courtroom steps. These folks are nothing if not charmers and masterful manipulators. (That's how they could hide their misdeeds for so long, after all.)
The judge didn't fall for it -- "To be a great philanthropist with other people's money," he said, "really is not very persuasive" -- and neither should you. Here at Fool HQ, we get email all the time from retirees who've lost much, if not all, of their entire financial future because of the greed at places such as WorldCom, Enron, Adelphia. These unfortunate investors, through no fault of their own, are out looking for jobs, struggling to make ends meet when they should be putting their feet up after decades of hard work.
There's plenty of tragedy in this situation, but be sure you remember the real victims here.
For related Foolishness:
- Examine last week's two Tyco takedowns.
- Review the sordid tale as described by Bill Mann.
- Shareholders have their own deck of evildoers.
Seth Jayson has little tolerance for thieves, whether they wield the pen or the gun. At the time of publication, he had positions in no firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.