Florida MSO Admits to Defrauding Pentagon

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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, federal prosecutors said.

Representatives of the company entered into a plea agreement Nov. 7 that
calls for $22 million in fines, forfeitures, restitution payments and special
assessments, according to 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 that 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 addressed a money-laundering indictment. Prosecutors claimed
that Americable 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
networks, 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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