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Producer Is a Focus of Sony Inquiry; Denies Ties to Fleiss : Movies: Sources say parent company of Columbia Pictures is trying to determine if studio funds were used improperly. Filmmaker Steve Roth's lawyer says there has been no impropriety.

August 28, 1993|ALAN CITRON and CLAUDIA ELLER | TIMES STAFF WRITERS

Steve Roth, a producer of "Last Action Hero," is a focus of the Sony Pictures investigation into possible ties between its Columbia Pictures unit and alleged Hollywood madam Heidi Fleiss, according to several sources.

Sony auditors are said to be poring over financial records from both "Last Action Hero" and Steve Roth Productions, which has been based on Sony's Culver City lot under a deal with Columbia. Sources said the company is trying to determine if studio funds were used to procure prostitutes or drugs.

In an interview Friday, Roth denied knowing Fleiss and said he has no knowledge of being part of an investigation by Sony.

His attorney, Arthur H. Barens, said: "Steve Roth is so totally confident that his corporate books and records will not evidence any impropriety or relationship with Heidi Fleiss or anyone associated with her that Columbia can perform an independent audit at their expense."

Barens suggested that Columbia "should look into their own books and records" instead of Roth's. Meanwhile, Roth's business attorney, Peter Dekom, offered to make his client's books and records publicly available.

Officials from Sony and Columbia declined comment when specifically asked if Roth is a target of the investigation. The companies have refused to officially confirm or deny whether they are examining possible links between Columbia and Fleiss.

But sources close to the studio said Roth is among a handful of people at the center of the internal probe, which began after persistent rumors linked Columbia executives and producers to Fleiss. "He is one of several people tied to the probe," said one high-level source.

The names of others under investigation were not divulged. But those close to the inquiry said Roth has come under scrutiny at least partly because of his ties to "Last Action Hero," a costly summer movie starring Arnold Schwarzenegger that bombed at the box office.

Auditors are said to be examining the $80-million production for possible financial irregularities. One focal point is whether women tied to Fleiss were on the movie's payroll as extras. Although sources close to Fleiss say the allegation is true, studio sources stressed that there is no evidence of that or any other wrongdoing.

Auditors also are said to be going over expense reports from Roth's production company.

This week Roth hired Barens--who describes himself as a longtime family friend of the producer--specifically to answer inquiries related to Fleiss.

Studios have strict rules about the ways in which production money can be spent, despite often lavish behavior by stars and others in the film business.

If funds were diverted to illegal activities such as drugs or prostitution, a studio could file a lawsuit to recover any misappropriated funds or complain to law enforcement agencies.

Fleiss' arrest and arraignment on pandering and drug charges was the biggest story in Hollywood this summer, at least until news surfaced this week that police were investigating accusations of child molestation against singer Michael Jackson. Fleiss' list of clients allegedly included some of the entertainment industry's leading figures.

Roth's name surfaced publicly in connection with Fleiss on Friday, when he told Daily Variety columnist Army Archerd that he has never met the alleged madam. He was responding to an upcoming US magazine story that contains a picture of a $1,200 check written on an account of Roth and his wife and says that Roth gave the check to Fleiss.

The Times earlier obtained a copy of the check, which was made out to cash and dated Nov. 25, 1992. The check, bearing what appeared to be Roth's signature, was returned unpaid.

In a recent interview, Roth said that the checking account was closed about a month before the check was written. "I would suspect it's probably a stolen check," he said.

He also said he does not sign his own checks. He said his accountant, Mario Veltri, signs all his checks.

Veltri said he had closed the account for business reasons. "There were checks that we had left over that were thrown in the trash," he said. "I'm assuming the check was bogus. If that check was good, it would have been signed by me and not returned by the bank."

Roth's attorney, Barens, said on Friday: "I'm interested in setting the record straight. At no time has Steve ever written a check to Heidi Fleiss or to anyone acting on Heidi Fleiss' behalf or to his knowledge had any relationship to Heidi Fleiss or anyone related to her whatsoever."

Barens maintains that Roth's only contact with Fleiss came at a Thanksgiving party at the home of Columbia Pictures Executive Vice President Michael Nathanson in November, 1991. "He was not introduced to her on that occasion," the attorney said.

Barens said Roth "never met (Fleiss)" on any other occasion.

Earlier this month, Nathanson denied any connection to the business activities of Fleiss. But he has acknowledged knowing Ivan Nagy, Fleiss' former boyfriend who has had business dealings at Columbia.

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