Rep. Dana Rohrabacher will return $23,000 he received for a screenplay option from a Hollywood producer who pleaded guilty Tuesday to defrauding dozens of people into investing in a bogus television series about the U.S. Department of Homeland Security.
The decision by the Huntington Beach Republican was announced by his press secretary shortly before producer Joseph Medawar acknowledged in U.S. District Court in Los Angeles that he had bilked about 50 investors of roughly $3.4 million from May 2003 to last September.
"The government is pleased that Mr. Medawar has accepted responsibility for the fraud he committed on the victims who invested in his company," Assistant U.S. Atty. David Willingham said after the brief court hearing before Judge Manuel Real.
Medawar, 44, who appeared in court with his family, declined to comment.
Outside court, his attorney, Jeffrey Rutherford, said, "Mr. Medawar has acknowledged and taken responsibility for his own conduct, has committed to pay full restitution to each of the victims and has agreed to help the government in its investigation of this and other crimes. For Mr. Medawar, these are important steps in the long process of trying to make amends for the harm that his conduct has caused."
Earlier this year, a federal grand jury indictment alleged that the $23,000 paid to Rohrabacher came from the money-laundering scheme Medawar used to promote his scam TV series.
Rohrabacher used his influence to open doors in Washington, D.C., after Medawar paid him an option on the screenplay in late 2003. At the time, Rohrabacher's action-adventure script was nearly 30 years old and had been kicked around Hollywood for so long that its conservative protagonist had been rewritten from a Vietnam veteran to a soldier who had served in the Persian Gulf War.
After the script was sold to Medawar, Rohrabacher helped introduce the little-known producer to fellow Republican congressmen and staff members at the House Homeland Security Committee. Medawar then trumpeted his access to Washington officials in discussing his project with journalists and selling it to potential investors, many of them from local churches.
Rohrabacher has repeatedly denied that he gave Medawar special access to government officials because the producer optioned his screenplay. Instead, the congressman has said, he thought Medawar's idea for a television series had merit because it would highlight the important work of the Homeland Security Department.
Rohrabacher had also said he would await the results of the trial before deciding whether to return the money authorities alleged had been stolen from investors.
After Medawar's plea agreement was disclosed, Rohrabacher's press secretary said the congressman would give back the money.
"Yes, he will return the $23,000," spokeswoman Rebecca Rudman said. "Obviously, he is going to try to do it as soon as possible."
Under the plea agreement, Medawar faces a maximum of 10 years in federal prison, fines of up to $9 million and restitution of $3.4 million to investors. He also will be required to help authorities in any ongoing investigation. Sentencing is scheduled for Aug. 28.
"As set forth in the plea agreement, the government has an ongoing investigation into the crimes that Mr. Medawar participated in or knows about," prosecutor Willingham said.
Medawar admitted to one count of conspiracy to commit mail fraud in connection with the purported television show and one count of tax evasion stemming from $1.2 million in unreported income from a company called American Fire Retardant Corp.
In court papers, Medawar said that in April 2003, he signed an agreement with unnamed "co-conspirators" associated with the company to serve as a consultant who would do no work but would receive shares of stock that he would convert into cash. Later, according to his plea agreement, some of the money was illegally funneled back to the unnamed co-conspirators.
A call to the company, based in Santee in San Diego County, was not returned Tuesday.