A Hollywood producer has agreed to plead guilty to conspiracy to commit mail fraud and income tax evasion in connection with a bogus television production about the U.S. Department of Homeland Security that he used to swindle millions of dollars from dozens of investors, according to federal court documents filed Monday.
Under the plea agreement, Joseph Medawar faces a maximum of 10 years in prison, up to $9 million in government fines and $3.4 million in restitution to those who were defrauded by his scam.
The plea, set to come before a federal judge today in Los Angeles, also requires Medawar to cooperate with the U.S. attorney's office, FBI and IRS in any ongoing investigation.
Last September, federal agents arrested Medawar, 44, on charges that he defrauded at least 70 investors -- many of them from local churches -- out of millions of dollars. A subsequent grand jury indictment alleged that Medawar told the investors that his production company, Steeple Entertainment Ltd., was developing a show about the Homeland Security Department with the cooperation of President Bush and other federal officials.
Authorities alleged that the millions of dollars collected from investors supported a lavish lifestyle for Medawar and the woman billed as the show's lead actress, Alison Heruth. Over a period of two years, the pair spent money on luxury cars, shopping sprees, expensive dinners and $40,000-a-month in rent for a Beverly Hills mansion, the indictment said.
Medawar not only defrauded investors but won over some of the state's most prominent Republicans with his pitch about a television series based on the Homeland Security Department. The politicians included Rep. Dana Rohrabacher (R-Huntington Beach), who used his influence to open doors in Washington, D.C. It was later learned that Medawar had paid the congressman $23,000 for an option on a 30-year-old screenplay. The $23,000 came from proceeds of the swindle, authorities said.
Rohrabacher has maintained that he thought the show would bring positive attention to the Department of Homeland Security. He has denied that Medawar gained special access by purchasing his script or by contributing to his political campaign.
Medawar began making the homeland security pitch in early 2003. At the time, he had a paper trail of business disputes and lawsuits going back 15 years, one of which had drawn FBI attention. Yet he persuaded prominent Southern California Republicans to lend their support, and pulled off his scam under the noses of local law enforcement and national security officials.
His film crew shot action scenes at the Orange County sheriff's headquarters building and high-security operations center. His political contributions won him entry into invitation-only GOP events, allowing him to mingle with the kind of power brokers who make a difference in politics and in Hollywood. He also had his picture taken with the president.
Heruth, met in Washington with Rohrabacher and former Rep. Christopher Cox (R-Newport Beach), who is now chairman of the Securities and Exchange Commission, as well as House Homeland Security Committee staffers, who advised her how to make the show more realistic.
Medawar used some of these connections to mislead investors into believing that the show had unprecedented access to Homeland Security officials. He urged investors to buy stock in Steeple before the company went public, assuring them that government involvement would make the show a hit, authorities said. The investors were told that 26 episodes were in production for distribution in 137 overseas markets.
In court documents filed Monday, Medawar acknowledged misrepresenting the project to investors.
His attorney, Jeffrey Rutherford, declined to comment about the plea agreement, as did federal prosecutors Christine Ewell and David Willingham.
Heruth, 41, pleaded guilty in April to lying to federal agents when she said she did not know that the show was part of an elaborate investment scam. In her guilty plea, Heruth acknowledged making false statements to FBI and IRS agents to conceal the scheme. She is scheduled to be sentenced July 17 and faces a maximum of three years in prison. The agreement also requires her to make full restitution to victims.
Medawar's former chief financial officer, Jeffrey Rosenberg, previously pleaded guilty to one count of failing to report mail fraud and acknowledged that he had helped conceal the scam from unwitting investors and lied to federal investigators. As part of the plea, he had agreed to testify against Medawar.