Aviron Pictures founder and former chairman Williams Sadleir was arrested on Friday on charges that he was involved in a more than $30 million fraud scheme, according to the Department of Justice.
He has since been released on a $100,000 bond and will be under home confinement.
Sadleir is being accused of misappropriating millions of dollars in funds from Aviron that had been invested in Aviron by a New York-based investment fund.
“He 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,” FBI Assistant Director William F. Sweeney Jr. said in a statement. “Today’s arrest serves as a reminder of the FBI’s dedication to holding people accountable for egregious financial crimes of this nature.”
Sadleir was charged with two counts of wire fraud and one count of aggravated identity theft. The wire fraud charges each carry a maximum prison term of 20 years. The aggravated identify theft charge carries a mandatory sentence of two years in prison.
He has also been accused of filing bank loan applications fraudulently, seeking more than $1.7 million dollars in forgivable Paycheck Protection Program loans guaranteed by the Small Business Administration under the CARES Act, according to the Department of Justice
The Paycheck Protection Program for small businesses is part of the CARES Act that was passed on March 29. It was intended to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. It authorized up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April, Congress authorized over $300 billion in additional PPP funding.
Sadleir, who was ousted from the indie production company in January, is being accused of obtaining the more than $1.7 million in forgivable loans with the intent of using a significant portion for personal and non-business-related expenses, including personal credit cards and a car loan.
“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.”
Sadleir used three entities he controlled to obtain the more than $1.7 million in loans under the COVID-19 relief program for small businesses. According to the DOJ, the applications he submitted to the lenders said that the funds would be used for payroll expenses and other specific business-related expenses, such as utilities or rent payments.
According to the federal criminal complaint filed in the Central District of California, however, these certifications were false. The Justice Department said in a news release on Friday that as soon as Sadleir obtained the funds, he transferred over half the money to a personal bank account and began using and attempting to use the funds to pay off personal credit card debts totaling more than $80,000 and a car loan totaling approximately $40,000, among other personal expenses.
“Today’s charges hold the defendant responsible for his alleged actions to swindle money out of a federal program intended to help those in need during a pandemic crisis,” said Special Agent in Charge Wade Walters of the Federal Deposit Insurance Corporation Office of Inspector General in a statement. “When an individual cheats the Paycheck Protection Program out of money, it deprives hard-working Americans and deserving small businesses. The FDIC OIG is committed to working with our law enforcement partners to investigate financial crimes in order to preserve the integrity of the nation’s banking sector.”
Pamela Chelin contributed to this report