Risk & Compliance

Aviron Pictures Founder Accused of $25M Fraud

The SEC says William Sadleir defrauded a BlackRock fund by using money it had invested in Aviron for personal expenses including a Beverly Hills ma...
Matthew HellerMay 26, 2020

The founder and former CEO of movie distributor Aviron Pictures has been charged with a $25 million fraud for illegally transferring money from a BlackRock investment fund to a sham company and using some of it to support his lavish lifestyle.

The U.S. Securities and Exchange Commission said William Sadleir, who was forced out of Aviron in January, misappropriated funding from the BlackRock Multi-Sector Income Trust (BIT) that was supposed to be used for purposes related to the distribution of films.

William Sadleir

“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,” Adam Aderton, co-chief of the SEC Enforcement Division’s asset management unit, said in a news release.

The filing of the SEC’s civil complaint came on the same day Sadleir was arrested in a separate criminal case alleging he scammed the federal government’s coronavirus-relief Paycheck Protection Program out of $1.7 million in forgivable loans.

Even though he was no longer employed by Aviron, he allegedly obtained the loans from JPMorgan Chase by falsely representing that the funds would be used for Aviron payroll expenses when, in fact, he used a significant portion of them for personal expenses.

Sadleir is also facing criminal charges related to the alleged BlackRock fraud.

BlackRock initially invested $12 million in Aviron in 2015, increasing its investment to up to $75 million by July 2017. According to the SEC, Sadleir had by no later than October 2016 begun “a scheme to defraud BIT by fraudulently diverting and misappropriating a portion of its investment.”

The scheme allegedly involved creating a sham company called GroupM Media Services to receive funds that were supposed to be used by Aviron to purchase pre-paid media credits from advertising placement company GroupM Worldwide Inc.

In email exchanges with BlackRock, prosecutors said, Sadleir even masqueraded as a female employee of the fake company.

Of the $25 million in BlackRock funds that were deposited in GroupM Media’s bank account, he allegedly used around $10 million to buy a Beverly Hills mansion for $14 million.

Todd Williamson/Getty Images