Adelphia Communications Corp. has agreed to a US$715 million settlement with the U.S. Justice Department and Securities and Exchange Commission to resolve claims stemming from the accounting-fraud scandal that toppled the U.S. cable-television operator.

The settlement, which was announced Monday, resolves criminal charges against Adelphia, its founder John Rigas, and his three sons, Timothy Rigas, Michael Rigas and James Rigas.

In its complaint, the SEC charged that Adelphia: fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them on the books of off-balance sheet affiliates; falsified operating statistics and inflated earnings to meet Wall Street estimates; and, concealed rampant self-dealing by the Rigas family, including the undisclosed use of corporate funds for purchases of Adelphia stock and luxury condominiums.

Under the settlement agreement, the Rigas family members will forfeit in excess of US$1.5 billion in assets that they derived from the fraud, including the Rigas family’s interests in certain cable properties. Upon the forfeiture of these assets, Adelphia will obtain title to those cable properties and will pay US$715 million into a victim fund to be established in the district court.

Adelphia and the Rigas family members agreed to the entry of permanent injunctions enjoining them from the antifraud, periodic reporting, and record keeping and internal control provisions of the federal securities laws. The individual Rigas family members further agree to orders barring them from acting as officers or directors of a public company.

“This settlement agreement presents a strong, coordinated approach by the SEC and the U.S. Attorney’s Office to resolving one of the most complicated and egregious financial frauds committed at a public company,” said Mark Schonfeld, Director of the SEC’s Northeast Regional Office. “The settlement provides an expedient and effective way to provide victims of Adelphia’s fraud with a substantial recovery while at the same time enabling Adelphia to emerge from Chapter 11 bankruptcy.”