BEVERLY HILLS— On Friday, May 22, the founder of Aviron Pictures, William Sadleir, was arrested and charged with allegedly filing bank loan applications that fraudulently seeked $1.7 million in forgivable Paycheck Protection Program (PPP) loans.

PPP loans are guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Sadleir, a Beverly Hills resident, was charged “in a federal criminal complaint filed in the Central District of California with wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA,” according to the official announcement.

Authorities have connected Sadleir to three PPP loan applications made through JPMorgan Chase on behalf of three Aviron entities. All applications claimed that each company had 33 employees and over $200,000 worth of monthly payroll expenses. 

JPMorgan Chase approved the applications on April 30, 2020, and the money was wired to “nearly empty JPMorgan Chase bank accounts associated with the three entities” on May 1. Within a few days, close to $1 million of the loan money was allegedly transferred to Sadleir’s own account at the same bank. Sadleir apparently used some of the money for personal expenses, like payments to his and his wife’s American Express cards.

“This defendant allegedly used Paycheck Protection Program loans to pay off his personal credit card debts and other personal expenses, rather than using the funds for legitimate business needs,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “As the department has made clear, those who defraud the PPP to line their own pockets at the expense of the American people will be brought to justice.”

A $40,000 payment that Sadleir made on his car loan – allegedly using the PPP loan money – was reversed, and JPMorgan Chase froze the bank accounts associated with the scheme.

 “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 FDIC OIG Special Agent in Charge Wade V. Walters. “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.”

Sadleir faces a collective penalty of up to 82 years in federal prison for all four charges. He was ousted as chair of Aviron Pictures several months ago.

The case prosecutors are Assistant United States Attorney Alex Wyman of the Major Frauds Section and Justice Department Trial Attorney Amanda R. Vaughn of the Criminal Division’s Fraud Section. The FBI, SBA’s Office of Inspector General, and Federal Deposit Insurance Corporation Office of Inspector General are investigating the case against Sadleir.

Sadleir’s arrest was also due to a separate criminal complaint filed in New York by federal prosecutors, which charged him with engaging in numerous fraudulent schemes relating to investments in Aviron Pictures and its affiliated entities.