NEW YORK, July 7 (UPI) -- The Adelphia Communications Corp. scandal has broadened with the filing of a $5 billion fraud suit against the company's 450 lenders.
The claims, filed in U.S. bancruptcy court in New York, allege the banks made fraudulent loans to the Rigas family, which controlled Adelphia, and thereby helped the Rigas family in its alleged looting of the cable company.
The suit claims the loans to the family were made to win lucrative investment-banking business from Adelphia. The Wall Street Journal said the Bank of America, Wachovia and Citigroup were the chief lenders involved.
The suit brings to light new details on loans made by several banks to the Rigas family. The family has been charged by federal prosecutors with looting billions of dollars from the nationwide cable company.
Federal prosecutors arrested company founder John Rigas and his sons, Timothy and Michael, last July. Adelphia filed for Chapter 11 bankruptcy protection in June 2002.
