Federal agents arrested the “recently ousted” head of a Hollywood movie production company Friday in connection with allegations he fraudulently obtained $1.7 million in Paycheck Protection Program loans last month, but then began using the funds to pay off credit card debt, a car loan and other personal expenses, prosecutors said.
William Sadleir, 66, of Beverly Hills, headed Aviron Pictures prior to being terminated in late 2019, according to the U.S. Department of Justice. A criminal complaint filed Thursday and unsealed Friday following his arrest charges him with bank fraud, wire fraud, making false statements to a financial institution and making false statements to the federal Small Business Administration.
Although he no longer had any connection to the business he claimed to represent, Sadleir applied for the loans from JPMorgan Chase, which were guaranteed by the SBA under the Coronavirus Aid, Relief and Economic Security Act, enacted March 29, according to DOJ spokesman Thom Mrozek. He falsely claimed the money would be used for payroll expenses to keep dozens of workers employed during the pandemic, prosecutors allege.
“The bank approved the loans, and Sadleir received more than $1.7 million,” Mrozek said in a written statement. But according to the complaint, “[I]mmediately upon receiving the funds a significant amount was diverted to Sadleir’s personal accounts and used for personal expenses.”
Officials said $1 million of the money was transferred to Sadleir’s personal bank accounts within a day of it being received.
“Sadleir was terminated from Aviron Pictures in late 2019, and people associated with the film production company told investigators that Sadleir currently had no role in Aviron Pictures or the related entities,” Mrozek said, adding that the company is not currently engaged in any operations at all.
U.S. Attorney Nick Hanna said prosecutors will “act swiftly against those who abuse the program for their own personal gain.”
“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,” he said.
Assistant Director in Charge of the FBI’s Los Angeles Field Office Paul Delacourt issued a similar warning.
“These funds were designed to be a lifeline to businesses struggling to stay afloat during the current crisis,” he said. “The FBI is committed to maintaining the integrity of the PPP and will hold accountable those who cheat the system at the expense of American taxpayers.”
Sadleir’s initial court appearance was scheduled for Friday in federal court in Los Angeles. The outcome was not available Friday afternoon.
If convicted as charged, he faces a maximum sentence of 82 years in federal prison.