Feds accuse Pennsylvania cablers of faking reports

The Justice Dept. has filed suit against two Pennsylvania cable TV companies, alleging they failed to pony up more than $ 2.4 million in copyright royalties owed for carrying distant TV signals.

The Justice Dept. filed suit Tuesday against Suburban Cable TV Co. and its parent, Lenfest Communications, both of Pottstown, Pa.

Justice claims the companies, which own and operate more than a dozen cable TV systems in Pennsylvania and New Jersey, have since 1988 underreported their gross receipts by over $ 154 million in semi-annual reports to the government. That has defrauded copyright holders, it alleges.

Rate claims questioned

Justice said the companies have regularly underreported the rate they charge their subscribers for tiers that include the secondary transmission of broadcast programming.

The figures are included in statements of account filed with the copyright office of the Library of Congress.

For example, Suburban Cable reported charging subscribers for basic cable services in the Pottstown cable systems as $ 7.95 from 1988 through 1991, when the rates actually went $ 11.95 to $ 17.45, according to Justice.

The department also claimed the system reported a 1992 rate as $ 8.95 that was actually $ 18.95.

The Pottstown system alone underreported gross receipts by $ 15.2 million, which accounted for royalty underpayment of $ 234,345, said the Justice Dept.

The complaint, filed by U.S. attorney Michael Stiles in Philadelphia, seeks injunctive relief by the court.

The suit alleges the companies are violating criminal statutes, as well as committing mail fraud.

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