Born Again --- gone bad

Published on Friday, January 6, 2006 by Bloomberg News

Hollywood Homeland Security Hoax Snares Bush, Cox in Cameo Bits


Joseph Medawar's television show about the U.S. Department of Homeland Security was supposed to be a drama with a difference, telling authentic tales of the war on terrorism with cooperation from top national security authorities, including President George W. Bush.

A promotional video on the website for ``DHS: The Series'' follows the program's supposed star, Alison Heruth-Waterbury, on a mid-2004 trip to consult with Washington terrorism experts. ``We're here talking to some very important people in the government so they can help us create and make this `DHS,''' Heruth-Waterbury tells viewers.


"DHS: The Series"

Her first videotaped VIP: fellow Californian Christopher Cox, then Republican chairman of the U.S. House of Representatives' Homeland Security Committee.

Over the past two years, Bush, Cox and other officials who had at most passing contact with Medawar's program wound up lending unintended credibility to a television project that federal prosecutors now call a multimillion-dollar scam.

Trading on Hollywood glamour and Washington power, Medawar, a Los Angeles-based producer of a half-dozen low-budget feature films, collected $5.5 million since 2003 from investors in ``DHS: The Series,'' prosecutors say. Television viewers have never seen a single episode.

``He said he had met with the president and Dick Cheney and had their graces,'' says James Brakke, an insurance broker from San Juan Capistrano, California, who invested $90,000 in Medawar's production company. ``They were passing around names of all kinds of impressive-sounding people they were working with.''

Jaguar and Mercedes

Vice President Cheney, Defense Secretary Donald Rumsfeld, former Homeland Security Secretary Tom Ridge, members of Congress and prominent Christian broadcasters were among those Medawar cited as supporters of his program, according to interviews and court records in a Los Angeles federal case.

The producer also used the official DHS logo in promoting the show.

Medawar, 44, was indicted in October on 23 counts of fraud, money laundering and other crimes. Prosecutors say he cheated investors by fabricating claims of White House backing for his TV show and touting nonexistent plans for an initial public offering that could boost his company's shares from a private-placement price of $1 to as much as $50 apiece.

Instead of financing the ``DHS'' series, most of the investors' money went for a Jaguar sedan, a Mercedes CLK320 coupe, jewelry, health spa dues, designer apparel and other accouterments of the Hollywood high life, the indictment charges.

Beverly Hills Mansion

Medawar spent $1,310 on a meal at Mastro's Steakhouse in Beverly Hills, California, according to court documents, and paid $40,000 a month to rent a 7,000-square-foot (650-square-meter) mansion in Beverly Hills for Heruth-Waterbury, who hasn't been charged with wrongdoing.

The actress, whose ``DHS'' bio lists just one movie credit, a 2001 Croatian film called ``Posljednja Volja'' (The Last Will), couldn't be reached for comment.

Medawar, who is free on $1 million bail awaiting trial, faces as much as 370 years in prison if convicted of all charges. His Los Angeles-based lawyer, Jeffrey Rutherford, declined repeated requests for comment.

Jeffrey Rosenberg, 57, former chief financial officer of Medawar's company, Steeple Entertainment Ltd., made a deal with prosecutors to plead guilty to one charge of concealing felony fraud in exchange for his cooperation.

Medawar, who's known as JoJo, offered investors a chance to serve God and country as well as to make money, according to court filings in his case.

`The Right People'

Los Angeles-based Steeple, whose logo resembles a church tower, raised much of its funding from churchgoers drawn to Medawar's promise that the ``DHS'' program's story lines would reinforce Christian values, prosecutors say.

Television evangelist Benny Hinn invited Medawar to promote ``DHS'' during Hinn's program on the Trinity Broadcasting Network, a religious cable channel. Medawar also enlisted the cooperation of Gener8Xion Entertainment Inc., a Hollywood-based producer of Bible-themed movies headed by Matthew Crouch, the son of Trinity Broadcasting's founders, Paul and Jan Crouch.

``He was hanging out with the right people,'' says James Barden, a Virginia-based evangelist and Christian filmmaker, who was paid in now-worthless Steeple stock to work on the ``DHS'' project.

``When he said President Bush was involved and he had his OK, and he's got all these men of God involved in it, there's nothing in me that would let me think of this man as a con man,'' Barden says.

Charm and Moxie

Among those who heard Medawar's pitch for the program was Michel Shane, an executive producer of ``Catch Me If You Can,'' Steven Spielberg's 2002 movie biography of Frank Abagnale, a Hall of Fame-caliber con man who kited $2.5 million of bad checks while posing as an airline pilot or doctor.

``I know Frank Abagnale,'' says Shane, 50, whose company is in Malibu, California. ``And this guy could get Frank Abagnale to invest.''

Medawar was promoting the ``DHS'' series while conservative Christians were voicing support for Homeland Security efforts to fight terrorism and defending the war in Iraq.

Interviews, FBI affidavits and other filings in Medawar's case show how charm, moxie, determined networking and a scattering of political and charitable contributions opened doors for Medawar in Washington and Hollywood.

A camera operator followed Medawar and Heruth-Waterbury into government offices and film industry functions, capturing credibility-enhancing footage displayed on the ``DHS'' program's Web site for backers to see.

Attended Same Church

The Internet video in which Cox, 53, appears, titled ``Washington D.C. Trip 2004,'' records a meeting between Heruth-Waterbury, Cox and two other Republican congressmen, California's Dana Rohrabacher and Michigan's Mike Rogers.

Rohrabacher, who says he went to the church that relatives of Medawar attended, arranged Heruth-Waterbury's meeting with Cox and Rogers, a former Federal Bureau of Investigation agent, after the producer sought assistance in making his show more authentic.

``Helping someone get an accurate picture of how government works is something I'd do for anybody,'' Rohrabacher says.

Cox, who left Congress to become chairman of the Securities and Exchange Commission last August, says he didn't know the videotaped session would be used to promote Medawar's project and has demanded that the clip be removed from the ``DHS'' program's Web site. As of Jan. 4, the footage was still available on the site.

Campaign Contribution

Cox says aides on his former committee forwarded an inquiry from Medawar's program for permission to use the Homeland Security Department's seal -- and that the agency rejected the request. The SEC chairman declined to comment further, saying Medawar is the subject of a continuing federal investigation.

Medawar contributed $2,000 to Rohrabacher's re-election committee in 2003, campaign records show. That same year, the nine-term California congressman also received $23,000 from Medawar for a two-year option on the right to film an action-movie screenplay called ``Baja'' that Rohrabacher wrote in the 1970s.

Rohrabacher, 58, says Medawar seemed sincere about promoting moral values. ``That was one of the comfort factors he provided, some guy talking about his religious faith and how I went to church with his family,'' Rohrabacher says.

``He was flamboyant, he exaggerated, he had flash and glitter,'' Rohrabacher says. ``He fit into my image of what Hollywood was all about. None of that translated to me that he couldn't do the project.''

Lead Actor Quit

Out of public view, there were signs the show wasn't going anywhere by the time Heruth-Waterbury hobnobbed with members of Congress. Gener8Xion Entertainment, listed by Medawar as a co- producer of ``DHS'' in a September 2003 private-stock prospectus, ordered Steeple off its lot after bills weren't paid, says Gener8Xion Vice President Marcos De Mattos.

The show's male lead, Timothy Cavanaugh, quit, later telling the FBI he was embarrassed that Medawar kept sending actors out to publicize ``DHS'' without devoting much apparent effort to actually shooting an episode, according to an affidavit from an FBI agent who interviewed the actor.

Medawar had some film industry bona fides. From 1986 to 1992, he got producer's credits on a boxing documentary and six R-rated feature films with titles such as ``Slaughterhouse Rock'' and ``Hardbodies 2.''

`Pure Trash'

Medawar's biggest film was his last, 1992's ``Sleepwalkers,'' from a screenplay by Stephen King. A Washington Post review called the movie ``a King-sized dog.'' The Los Angeles Times labeled it ``pure trash.''

Medawar's work on films rated as unsuitable for children didn't tarnish his religion-heavy pitch for ``DHS'' in Barden's eyes. ``It was my understanding that Joseph had accepted the Lord and changed and wanted to do something for God,'' he says.

Medawar leveraged born-again connections, appearing on Hinn's ``This Is Your Day'' program and promoting the ``DHS'' series at a conference for donors to Hinn's ministry -- some of whom invested hundreds of thousands of dollars, court documents show.

``Pastor Benny regards himself as a victim in this case,'' Hinn spokesman Ronn Torrossian says.

Medawar's bio on Steeple's website says he worked on various, mostly unspecified merger, entertainment-financing and real estate deals since his last film release.

`Hug From JoJo'

One deal ran afoul of authorities in California. The state's Department of Corporations alleges that Medawar broke state law in November 2001 by participating, without a license, in sales of stock and notes in Team Communications Group Inc., a publicly traded Los Angeles-based TV programmer that filed for Chapter 7 bankruptcy liquidation in April 2002.

The department issued an order on May 9, 2005, while Medawar was promoting ``DHS,'' barring him from soliciting stock purchases without a license.

Medawar was charming. ``We couldn't even go into a restaurant,'' Barden says, ``without the busboys and the owner wanting a hug from JoJo.''

Medawar used more than his charm. After a casual conversation about ``DHS'' when he bumped into Medawar at a Beverly Hills restaurant, Raymond Caldiero, a former Marriott Corp. executive vice president, says he learned one way the producer managed to claim so many prominent connections.

``When I got back home, Medawar sent me a box of business cards saying I was on his board -- and he spelled my name wrong,'' Caldiero says.

Legal Action Threatened

``He gets people's names on things because he puts their names on things without asking permission,'' says Caldiero, a Connecticut-based consultant and one of the Republican Party's six-figure campaign fund-raisers, who are called Pioneers.

Though Medawar told investors that ``DHS'' had Ridge's endorsement and was submitting scripts for vetting by Homeland Security officials, the agency in fact threatened legal action to make the producer stop using the real DHS's name and insignia, according to an FBI search warrant application filed in court.

``The Department of Homeland Security did not provide any assistance or endorsement for this series,'' spokeswoman Valerie Smith says.

Still, Medawar got a photo of himself and Heruth-Waterbury with then Homeland Security Undersecretary Asa Hutchinson by taking a camera operator to a February 2004 law enforcement charity banquet in Beverly Hills. The shot is part of a video shown on the ``DHS'' program's Web site.

FBI Questions

The promotional site also has an audio clip of an anti-terrorist statement by Bush, whom Medawar met at a $2,000-a-plate Los Angeles fund-raiser in March 2004, and a photo of the president at prayer. White House spokeswoman Dana Perino declined to comment because there's a continuing investigation.

Medawar stuck to claims of high-level connections as investigators began circling. Questioned by an FBI agent in March 2005, Medawar insisted the FBI was collaborating on his project, according to the search warrant application.

Medawar also said Steeple planned to go public within two months, using investment bankers who had worked on Google Inc.'s IPO. Neither claim was true, prosecutors say.

When investors and associates were questioned by the FBI, Medawar said the probe was part of the public offering process. ``He told me he had instigated that investigation to show that he had a clean bill of health before the IPO,'' Barden says.

Rohrabacher, who says he will seek another producer for his ``Baja'' screenplay, says Medawar made connections partly because of his legitimate Hollywood credentials and because stories about anti-terrorism agents could make for compelling TV drama.

`Jury Will Decide'

In the end, he says, the government's prosecution will determine whether Medawar set out to defraud investors or got into a project too big for him to handle.

``The jury will decide if this guy's a con man or an incompetent,'' Rohrabacher says.

On the ``DHS'' program's site, the video clip of Heruth-Waterbury's Washington visit closes with a shot of the actress outside the capital's Watergate complex, where she begins to run toward the horizon as if rushing to head off a terrorist attack.

Background music swells with strains of ``The Air Force Song,'' known by its lyric ``Off we go into the wild blue yonder.'' That, prosecutors say, is where money from Medawar's investors wound up.

©2006 Bloomberg L.P.