News

Florida MSO Admits to Defrauding Pentagon

11/24/2002 7:00 PM Eastern

American Intercable International Inc. — a Miami-based MSO that operates systems in localities and on U.S. military bases — has pleaded guilty to charges that it conspired to defraud the government, according to federal prosecutors.

Representatives of the company Nov. 7 entered into a plea agreement that calls for $22 million in fines, forfeitures, restitution payments and special assessments, said the U.S. Attorney for the Southern District of Florida.

Three defendants were charged in the case: the parent company and affiliates Americable International Moffett Inc. and Americable International New York Inc., according to federal officials.

The investigation was initiated by the Defense Department, which alleged that when it began a wave of military-base closings in the early 1990s, Americable companies submitted settlement proposals that sought reimbursement for investment in infrastructure the cable company would lose when the bases were shuttered.

Defense officials contended that Americable's claims included $8 million in fictitious invoices, according to federal officials. When government auditors tried to verify the MSO's claims, company officials provided fake invoices, prosecutors said.

The plea also addresses a money-laundering indictment. Prosecutors claim Americable also defrauded several programmers from outstanding payments, including A&E Network, Discovery Channel, ESPN, MTV: Music Television and several regional networks.

According to attorneys, the operator underreported amounts owed to the network, and the then-head of the company, Charles Hermanowski, directed employees to write checks in the amount of the difference and deposit them in his personal account.

Earlier this year Hermanowski traveled to Australia, purportedly for a vacation. But when he was detained there by authorities, he was using another name. Extradition is pending.

The corporate entities are scheduled for sentencing in February.

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