Second Probe Targets Producer

Only days after his arrest for allegedly bilking investors out of $5.5 million, federal authorities revealed Monday that they have a separate criminal investigation into another stock transaction involving Hollywood producer Joseph M. Medawar.

Federal prosecutors made the disclosure in an effort to convince U.S. Magistrate Judge Andrew J. Wistrich that Medawar posed too big a flight risk to be released on bond. After a 40-minute hearing, Wistrich ordered Medawar held without bail.

Prosecutors refused to provide details of the newly disclosed probe, though one law enforcement source said it involved Medawar’s receiving stock in a company that had nothing to do with the current case. On Friday, Medawar, 43, was taken into custody on charges that he conned more than 70 people -- many of them from local churches -- into investing tens of thousands of dollars each in his Hollywood production company before he took the company public in a stock offering. No stock offering ever occurred, authorities say.

Medawar faces 25 years in prison if convicted on the charges of mail fraud and obstruction of justice for allegedly providing false documents to the FBI during its investigation.

Medawar allegedly told investors that the company, Steeple Entertainment, was producing a new drama series based on the U.S. Department of Homeland Security and that it was certain to be a success because it had the backing of the White House and various other government officials, according to an FBI agent’s 120-page affidavit.

Authorities say their investigation revealed that the production was a sham and that federal officials had disavowed the show. One Homeland Security official, in fact, told the FBI that she specifically had instructed Medawar and the show’s lead actress, Alison Heruth-Waterbury, to stop using the department’s name and seal on promotional materials, according to the affidavit.

During a yearlong investigation, records and interviews show, the FBI and IRS allegedly uncovered evidence that Medawar spent most of the investors’ money on a lavish lifestyle for himself, Heruth-Waterbury and her family. The couple allegedly leased a Jaguar XJR, a Hummer and a Mercedes CLK 320, went on shopping sprees at Beverly Hills boutiques, ate expensive dinners and rented a $40,000-a-month Beverly Hills mansion.

Authorities say only a small fraction of the money went into the production of the television show, which has never aired.

On Monday, an anxious-looking Medawar appeared before the federal magistrate as his attorney, Deputy Federal Public Defender Victor Cannon, argued that his client, a naturalized U.S. citizen born in Lebanon, should be released on bond.

As Medawar’s parents and siblings looked on, Cannon told Wistrich that his client had such strong family ties in Los Angeles and years of experience in film production that it was inconceivable he would flee if released from custody.

“Mr. Medawar has been in the Hollywood business for a long time,” Cannon said. “This has been Mr. Medawar’s life.”

The defense attorney said Medawar had known for months of the federal investigation and never attempted to flee. “Leaving the U.S. is not the kind of option ... that Joseph Medawar would ever consider,” Cannon said.

Although no specific bond amount was discussed, Cannon indicated that Medawar’s parents were prepared to post $200,000 to win release of their son. The money, he said, would come from equity in their home on the Palos Verdes Peninsula.

Responding to questions from the government and the judge, Cannon said the parents were not able to post more because they planned to sell a second home they had just purchased to supplement the 71-year-old father’s sporadic salary as a clock repairman.

But federal prosecutors David Willingham and Christine Ewell insisted that property records showed that the parents could post far more money than they were willing to guarantee to the court. Ewell noted that the parents’ second home in Redondo Beach, purchased last month for nearly $500,000, was free of any debt. The parents also had $222,000 in credit-card debt.

The government’s argument seemed persuasive to the judge, who at one point questioned why the parents did not seem prepared to put up whatever they could to win their son’s release. Wistrich also noted that plenty of other family members were in court to show their support for Medawar but had not offered to put up money for his release.

As Medawar’s attorney attempted to respond, the defendant’s brother and father interrupted the proceedings.

“I don’t own any property,” brother Roy Medawar told the magistrate, standing up in the back of the courtroom.

“I am going to give you this, my passport,” Medawar’s father, Michel, told Wistrich, standing and waving the document.

After a brief recess, Wistrich granted the government’s request to detain Medawar.