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U.S. Jury Indicts Man Accused of TV Series Scam

Producer of a phantom show on homeland security allegedly stole millions from investors.

October 21, 2005|Christine Hanley and Greg Krikorian | Times Staff Writers

A Hollywood producer was indicted Thursday on charges that he swindled millions of dollars from dozens of people he had conned into investing in a phantom television series based on the U.S. Department of Homeland Security.

Joseph M. Medawar has been held without bail since his arrest in September. The indictment returned by a federal grand jury closely parallels an earlier criminal complaint but adds charges. He now faces five counts of mail fraud, six counts of wire fraud, 10 counts of money laundering and two counts of obstructing justice. If convicted of all charges, he could face a sentence of up to 370 years in prison, the U.S. attorney's office said.

Also Thursday, prosecutors announced that Medawar's former chief financial officer had agreed in a plea bargain to testify against his former boss. Under the deal, Jeffrey Rosenberg, who worked for Medawar and his production company, Steeple Entertainment Ltd., pleaded guilty to one count of failing to report mail fraud and acknowledged that he had helped conceal the alleged Homeland Security scam from unwitting investors and lied to federal investigators. The charge carries a maximum sentence of three years in prison and a $250,000 fine.

Medawar, who has a paper trail of business disputes and lawsuits dating back 15 years, began shopping around his idea for a Homeland Security series in 2003. Along the way, he persuaded two California congressmen from Orange County, Republicans Christopher Cox and Dana Rohrabacher, as well as House Homeland Security Committee staffers, to provide advice on how to make the show more realistic. His film crew shot action scenes at the Orange County Sheriff's Department for a promotional trailer, and he made political donations that got him access to high-profile, invitation-only GOP events.

Medawar allegedly capitalized on some of those connections to promote the series and lure investors -- many from Southern California churches -- into buying Steeple stock. He told investors that a well-known investment bank was preparing an initial public offering, that the company was valued at more than $200 million, that the series had the backing of President Bush and the Department of Homeland Security, and that 26 episodes were in postproduction -- all lies, according to the indictment.

Medawar allegedly spent most of the money on a lavish lifestyle for himself and the show's lead actress, Alison Heruth-Waterbury. The trappings included a Jaguar XJR, a Hummer and a Mercedes CLK 320, shopping sprees at Beverly Hills boutiques, expensive dinners, jewelry, $40,000-a-month rent for Heruth-Waterbury's Beverly Hills mansion, and college tuition at Pepperdine University for her daughter, authorities said.

Medawar continued to sell the stock even after the California Department of Corporations issued a desist-and-refrain order directing him to stop in May, the indictment says.

Rosenberg, who served as chief financial officer for Steeple from September 2004 through July of this year and subsequently worked for Medawar as an outside contractor, acknowledged in his plea agreement that he had backdated stock certificates on his boss' orders.

Rosenberg said he became aware that Medawar was making false statements to investors and potential investors about the production company and plans for the series, according to the agreement. Rosenberg also said he had heard Medawar make other false representations about producing additional television shows and launching other ventures in merchandising, real estate and music production.

The misrepresentations, the plea agreement says, were made to entice investors into buying stock in Steeple and to "lull" investors into not asking for their money back or going to authorities.

Rosenberg could not be reached for comment.

His attorney, Stanley Rozanski, said the plea agreement reflected how his client "got conned by a con man and should have obviously brought this to the attention of the government before he did."

"A very sophisticated person by the name of Joseph Medawar ... hurt a lot of people," Rozanski said.

Medawar is scheduled to be back in court Monday. Rosenberg is scheduled to be in court Nov. 7.

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