Aviron Pictures founder William Sadleir was charged Friday with allegedly misappropriating funds meant for businesses impacted by the novel coronavirus pandemic.
Sadleir was ousted from the indie distributor in January.
The 66-year-old producer was also charged separately by the U.S. Securities and Exchange Commission on Friday for allegedly defrauding a publicly traded fund of at least $13.8 million.
According to the Department of Justice, Sadleir secured more than $1.7 million from the forgivable Paycheck Protection Program, which he said would be used for payroll via three film production and distribution companies. Instead, he allegedly used the money for personal expenses.
Sadleir was arrested Friday and subsequently charged with wire fraud, bank fraud, false statements to a financial institution and false statements to the Small Business Administration, according to federal authorities. The recently passed PPP program is meant to assist employees and small businesses battered by the coronavirus pandemic.
“This film producer allegedly made a series of misrepresentations to a bank and the Small Business Administration to illegally secure taxpayer money that he then used to fund his nearly empty personal bank account,” U.S. Attorney Nick Hanna of the Central District of California said in a statement. “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.”
Also on Friday, the SEC charged Sadleir in Manhattan court with violating the antifraud provisions of the federal securities laws, the producer having allegedly misappropriated millions from investors.
The SEC alleges BlackRock Multi-Sector Income Trust, a registered closed-end management investment company, invested approximately $75 million in Aviron.
Sadleir, according to the SEC complaint, represented that the investments would be used to support the company’s distribution of films. However, he allegedly used millions to pay personal expenses, including the purchase, furnishing and renovation of a Beverly Hills mansion.
“When private companies and individuals solicit or accept investments, including from investment companies, they must comply with the federal securities laws,” Adam S. Aderton, co-chief of the SEC’s enforcement division’s asset management unit said in a statement. “We allege that Sadleir raided millions from BIT and its investors, and rather than using those funds for investment purposes he spent them lavishly on himself.”
