U.S. Department of Justice|
Debra Wong Yang
United States Attorney
Central District of California
United States Courthouse
312 North Spring Street
Los Angeles, California 90012
FOR IMMEDIATE RELEASE
October 20, 2005
For Information, Contact Public Affairs|
Thom Mrozek (213) 894-6947
Second Defendant to Plead Guilty to Concealing Scheme
Los Angeles, CA - A federal grand jury in Los Angeles today indicted a Palos Verdes man on charges arising from an investment scam in which he falsely claimed to be producing a television series based on the Department of Homeland Security (DHS).
Joseph M. Medawar, 43, the owner of Steeple Entertainment, was named in a 23-count indictment that accuses him of mail fraud, wire fraud and money laundering in relation to a scheme that raised more than $5.5 million from at least 70 investors.
In a related matter, the former chief financial officer of Steeple has agreed to plead guilty to federal charges for concealing Medawar's scheme from federal investigators.
According to the Medawar indictment, beginning in as early as May 2003 and continuing through last month, Medawar solicited investors to buy stock in Steeple by falsely claiming that the production company would shortly be conducting an initial public offering, that Steeple had hired a well-known investment bank to conduct that initial public offering and that Steeple had a valuation of over $200 million. As part of the alleged scam, Medawar falsely claimed that the "DHS" television series had the endorsement of President George W. Bush and the real Department of Homeland Security, and that Steeple had 26 episodes of "DHS" in post-production. In addition to alleging that these claims were false, the Indictment states that the California Department of Corporations had issued a Desist and Refrain order directing Medawar to stop selling securities in California.
Instead of being used to finance the "DHS" television show, investor funds allegedly were diverted to Medawar and others to pay for personal expenses, such as home rentals, jewelry, child care, food and entertainment, and automobile leases.
Medawar is charged in the indictment with five counts of mail fraud, six counts of wire fraud, 10 counts of money laundering and two counts of endeavoring to obstruct the federal criminal investigation. The obstruction of justice charges relate to Medawar's alleged creation of phony documents and the submission of those documents to the Federal Bureau of Investigation.
If convicted on all counts, Medawar could be sentenced to a statutory maximum penalty of 370 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Medawar, who has been held without bond since his arrest on September 23, is scheduled to be arraigned on the indictment on October 24.
In the related case, Jeffrey Rosenberg, 57, of Studio City, the former Steeple CFO, has agreed to plead guilty to a charge of misprision of a felony for concealing the "DHS" investor fraud scam.
In a plea agreement filed this morning in United States District Court in Los Angeles, Rosenberg acknowledged that during his employment at Steeple he was aware and had full knowledge that Medawar was making materially false statements to investors in an effort to defraud those investors. Rosenberg further acknowledged that, having knowledge of the commission of that federal felony offense, he failed to disclose that felony offense and took affirmative steps to conceal that felony offense by making materially false statements to the United States Attorney's Office, the Federal Bureau of Investigation and the Internal Revenue Service. Furthermore, at Medawar's direction, Rosenberg back-dated stock certificates to a date prior to the issuance of the Desist and Refrain order issued by the California Department of Corporations. After he pleads guilty, Rosenberg faces a maximum sentence of three years in federal prison. Rosenberg is expected to make his first court appearance on November 7.
This case was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation Division.
Release No. 05-145
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