Film producer charged with paying credit cards with coronavirus funds, defrauding investors

Federal authorities on Friday arrested a Beverly Hills film producer on fraud charges after he allegedly paid off his personal credit cards using federal loans intended to help small businesses weather the coronavirus pandemic.

William Sadleir, 66, who was ousted as head of Aviron Pictures late last year, also faces separate criminal fraud charges and a lawsuit from the U.S. Securities and Exchange Commission in New York, where he is accused of swindling investors in his company of tens of millions of dollars in order to support his lavish lifestyle.

Sadleir, arrested by federal agents Friday morning, could not be reached for comment and did not have an attorney listed in court documents.

In the California case, prosecutors allege Sadleir applied for more than $1.7 million in Paycheck Protection Program loans backed by the Coronavirus Aid, Relief, and Economic Security Act, claiming the funding would allow Aviron subsidiaries to keep dozens of employees on the payroll.

However, within days of receiving the emergency funding, prosecutors said, Sadleir redirected nearly $1 million to his personal bank account, used it to pay down debt on his and his wife’s American Express cards and attempted to make a $40,000 payment on a car loan, which his bank ultimately blocked.

An affidavit in the case notes that Aviron Group, Aviron Licensing and Aviron Releasing, the companies for which Sadleir sought the loans, are “not engaged in any ongoing operations,� prosecutors said.

Officials from multiple federal agencies involved in the investigation condemned what they said was Sadleir’s misuse of a program intended to help people, at a time when many employees in the film and other industries are in need of assistance.

“The Paycheck Protection Program was implemented to help small businesses stay afloat during the financial crisis, and we will act swiftly against those who abuse the program for their own personal gain,� said U.S. Atty. Nick Hanna.

The California complaint — which charges Sadleir with wire and bank fraud and with making false statements to a financial institution and to the Small Business Administration — was filed Thursday and unsealed Friday after Sadleir’s arrest.

He faces more than 80 years in prison on the four counts.

Separately, Sadleir is charged with two counts of wire fraud and with aggravated identity theft in New York, where U.S. Atty. Geoffrey Berman said he “orchestrated a massive fraud� involving tens of millions of dollars of investor funds in Aviron entities.

Prosecutors allege Sadleir embezzled about $14 million to pay for a Beverly Hills estate and illegally transferred more than $25 million in other funds to a sham marketing company he created.

Aviron helped distribute several films in the U.S. in recent years, including “My All American,� “Kidnap,� “The Strangers: Prey at Night,� “A Private War,� “Destination Wedding,� “Serenity� and “After.�

To keep up the ruse, FBI Assistant Director William F. Sweeney Jr. said, Sadleir “allegedly even went so far as to pose as a female employee of the sham New York-based company he created to further his illegal activity.�

For the New York charges, Sadleir faces more than 40 years in prison.

He also faces a related civil case filed by the Securities and Exchange Commission, which seeks financial penalties against Sadleir.

In that lawsuit, commission attorneys allege that of about $75 million invested in Aviron by BlackRock Multi-Sector Income Trust, Sadleir inappropriately diverted $25 million to his sham company, misappropriated $13.8 million for a Beverly Hills mansion and forged investor signatures to release an additional $3 million in collateral funding.

He then “used the misappropriated money to support his lavish lifestyle, including cash withdrawals and the purchases of a luxury car and a mansion in Beverly Hills,� the lawsuit said.

A BlackRock spokesman said the company, which has filed its own lawsuit against Sadleir, is “pleased that the government has moved swiftly to investigate and bring Mr. Sadleir to justice.�