By Lukas I. Alpert
Lights, camera, legal action.
A Hollywood indie film distributor has pleaded guilty to stealing more than $30 million from a fund run by investment giant BlackRock and using the money to buy a $14 million mansion in Beverly Hills.
William Sadleir, 67, co-founded Aviron Pictures in 2017, distributing thrillers like “Kidnap” starring Halle Berry, and “Serenity” featuring Matthew McConaughey and Anne Hathway.
Federal prosecutors say Sadleir got the company started with a $75 million investment from BlackRock’s Multi-Sector Income Trust fund. But instead of using that money for movies, prosecutors say he put more than $30 million into his own pockets.
According to court documents, Sadleir spent $14 million of the money to buy a lavish mansion in Beverly Hills, $3 million to remodel Aviron’s Hollywood offices, $250,000 to settle a legal dispute and $127,000 on a Tesla (NAS:TSLA) . He also paid himself and his wife $350,000.
To misappropriate the money, prosecutors say Sadleir created a sham company and even posed as a fictitious advertising executive in order to convince BlackRock that Aviron had used large portions of the cash to finance non-existent marketing deals. Sadleir also was accused of forging documents to lift BlackRock’s liens from certain intellectual property in order to take additional loans against them without the fund’s consent.
When approached by investigators in 2020, Sadleir allegedly admitted he had “f***ed up,” according to a civil complaint filed by the Securities and Exchange Commission.
In an email, Sadleir’s attorney said his client took full responsibility for his actions.
“While the decision to plead guilty is always difficult, it was important for Mr. Sadleir to take responsibility for his behavior. Mr. Sadleir apologizes to everyone who has been hurt by his actions,” attorney Matthew Schwartz wrote.
After discovering the money had disappeared, BlackRock filed a civil suit against Aviron and announced that it wrote off its entire $75 million investment. Blackrock later said it fired the manager of the fund for violating its conflict of interest rules because his actress daughter had appeared in a film Aviron had worked on.
A BlackRock spokesman declined to comment.
Fraud, the sequel
Sadleir is separately facing charges in California of fraudulently filing in 2020 for $1.7 million in payroll protection program loans for Aviron even though he had already been removed from the company. He allegedly used the money to make a $40,000 car payment and cover his American Express bills.
His attorney in that case declined to comment.
Prosecutors say Sadleir had initially covered up the theft by telling BlackRock by he had spent $25 million on pre-paid media credits with MediaCom Worldwide, a division of global advertising giant GroupM Worldwide. He then created a fake company, GroupM Media Services, LLC, to make it appear the money had gone where he said it had. He also posed as an imaginary GroupM executive, “Amanda Stevens” to convince BlackRock that the media deals were in place.
Sadleir faces up to 20 years in prison when he is sentenced in May.
“We called a wrap on Sadleir’s scheming, and he now faces significant time in federal prison,” said Damian Williams, the U.S. attorney for the southern district of New York.