Adelphia Settles Fraud Scandal

Adelphia Communications Corp. agreed to settle a federal fraud investigation by paying $715 million to a government fund that will pay back investors hurt by the accounting scandal.

As part of the deal, Adelphia's founding family, the Rigases, will hand over almost all their holdings, which amounts to nearly $1.5 billion.

"Today is a day of restitution for victims of corporate corruption," said U.S. Attorney General Gonzales said at a news conference.

Adelphia investors lost billions of dollars when the company collapsed after founder John Rigas was found to have used company profits to fund personal expenses.

The company declared bankruptcy and Rigas and his son Timothy were convicted last summer for pilfering more than $2 billion.

The settlement announced Monday is one of the largest of its kind, according to reports, and will be funded by the sale of Adelphia's cable systems to Comcast Corp. and Time Warner, which is parent to the second largest cable operator.

Just last Thursday, it was announced that Comcast and Time Warner had come to a definitive agreement to buy Adelphia's 5.3 million subscriptions for $17.6 billion in cash and stock.