William Sadleir, the ousted chair of indie distributor Aviron Pictures, was arrested Friday and charged with federal crimes on both coasts, alleging that he swindled an investor out of $30 million and defrauded the Paycheck Protection Program.
Prosecutors in New York alleged that Sadleir transferred more than $25 million from the company, and used much of the money for personal expenses, including to buy a $14 million mansion in Beverly Hills.
Meanwhile, Los Angeles prosecutors accused Sadleir of taking $1.7 million in PPP loans under fraudulent pretenses. According to prosecutors, he used some of the money to pay his and his wife’s American Express bills, and to make a $40,000 car payment.
The FBI arrested him at 6 a.m. at his Beverly Hills home, without incident. He was taken to Metropolitan Detention Center in Los Angeles. At an initial court appearance on Friday afternoon, his bail was set at $100,000. He was expected to be released on home confinement.
The Securities and Exchange Commission filed a parallel civil complaint in New York, alleging that Sadleir defrauded Aviron’s primary investor, BlackRock Multi-Sector Income Trust, out of at least $13.8 million. According to the SEC complaint, BlackRock invested $75 million in the company.
In the criminal case in New York, Sadleir allegedly told the investor that Aviron had transferred the money to buy $27 million in prepaid media credits, in order to reserve advertising time for the company’s upcoming releases. In reality, according to prosecutors, Sadleir had transferred the money to a sham entity that he controlled.
Prosecutors allege that he went so far as to pose as “Amanda Stevens,” a female employee of the fake entity, in email communications assuring the investor that the media credits had been reserved.
The SEC alleges that in addition to buying the home in Beverly Hills, Sadlier used $3 million of the misappropriated funds to remodel Aviron’s offices. Another $350,000 went to pay himself and his wife, and $254,000 was used to settle a legal dispute, according to the SEC. Sadleir also bought a Tesla for $127,000 and used $109,000 to pay for home furnishings and remodeling, according to the SEC.
In December 2019, BlackRock filed suit in state court in New York, accusing Sadleir and Aviron of obtaining fraudulent lien releases, and seeking at least $3 million in damages.
The criminal charges in New York also cite the alleged fraudulent releases. According to the SEC, the forgeries allowed Sadleir to misappropriate collateral for BlackRock’s loans. When confronted about it by BlackRock in November 2019, he admitted that he “f—ed up,” according to the SEC complaint.
The Los Angeles charges allege that Sadleir obtained PPP loans in April through three Aviron entities, even though he had been removed from the company months earlier. According to prosecutors, Sadleir falsely claimed that each entity had 33 employees, and listed several employees by name who had been laid off in February. According to the government, all but a few Aviron employees have been let go since January.
Prosecutors allege that Sadleir quickly transferred much of the money to his personal account at JPMorgan Chase. About $67,000 was used to pay his and his wife’s American Express bills, according to prosecutors. Another $20,000 went to pay off a personal Bank of America Visa card, the government alleges, and $40,000 went to pay a car loan. JPMorgan reversed that charge, having frozen his account by that point, according to prosecutors.
Sadleir emailed the bank to complain about the frozen account, according to an affidavit, saying that the bank’s actions had made it difficult to restart production and distribution and “potentially damaged our business viability.”
Sadleir founded the independent distributor in 2017, releasing such films as “A Private War,” “Destination Wedding,” “Serenity,” and “After.” He was ousted in December.
In the New York case, he faces two counts of wire fraud and one count of aggravated identity theft. The Los Angeles charges allege that he committed wire fraud and bank fraud, made false statements to a financial institution, and lied to the Small Business Administration.