Hollywood executive and former White House staffer sentenced to six years in prison for defrauding New York investment fund of more than $30 million

Hollywood executive and former White House staffer sentenced to six years in prison for defrauding New York investment fund of more than $30 million

Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIAM SADLEIR was sentenced today by U.S. District Judge Paul A. Engelmayer to six years in prison for his participation in two fraudulent schemes related to investments made by a New York investment fund (the “Fund”) in Aviron Pictures, LLC and its affiliated entities (collectively, “Aviron”). Sadleir previously pleaded guilty to two counts of wire fraud, one related to each of the schemes.

US attorney Damian Williams said: “William Sadleir presented himself as a successful Hollywood mogul, but behind the scenes he engaged in brazen and calculated schemes to defraud a New York investment fund. York over $30 million using a fake company, fake documents, and even a fake identity Sadleir went so far as to impersonate an advertising executive on maternity leave as part of an effort to cover up his crimes. Today’s sentencing holds Sadleir accountable for his crimes and sends the message that there will be no happy endings for executives who defraud their investors.

According to the complaint, indictment and other documents filed in court:

The Fund is a listed closed-end investment fund. The shares of the Fund are traded on the New York Stock Exchange. On or about December 2019, the Fund had approximately $649.1 million in assets.

WILLIAM SADLEIR was the Chairman and Chief Executive Officer of Aviron and oversaw its operations from or around 2015 until or around December 2019. Aviron has been involved in the distribution of a number of films in the United States, including my all american (2015), Kidnap (2017), Strangers: prey of the night (2018), A private war (2018), destination wedding (2018), Serenity (2019), and After (2019).

SADLEIR engaged in two fraudulent schemes related to an investment of approximately $75 million made by the Fund in Aviron.

In one of the schemes (the “Advertising Scheme”), SADLEIR misappropriated millions of dollars that the Fund had invested in Aviron. SADLEIR told the Fund that Aviron invested the money in prepaid media credits with advertising placement company MediaCom Worldwide (“MediaCom”), which is a subsidiary of advertising and media agency GroupM Worldwide. Instead, using the bank account of a fake entity he created, SADLEIR illegally transferred over $25 million of those funds out of Aviron. Specifically, SADLEIR created a fictitious New York-based company called GroupM Media Services, LLC (the “Sham GroupM LLC”) designed to appear as the legitimate entity, GroupM Worldwide, and a corresponding bank account in the name of this fictitious entity. . SADLEIR then used a significant portion of these illegally transferred funds for his personal benefit, including to purchase a private residence in Beverly Hills for approximately $14 million. SADLEIR then falsely told the Fund that Aviron had purchased a balance of approximately $27 million in prepaid media credits from MediaCom that were available to promote future Aviron films, and pledged a portion of those credits to the Fund. as collateral for additional loans. But the claimed credits did not exist. As part of its misrepresentations, SADLEIR also created a false identity of an alleged New York-based employee of Sham GroupM LLC named “Amanda Stevens”, who corresponded with a representative of the Fund, assuring the Fund that Aviron had approximately $27 million balance in prepaid media credits with Sham GroupM LLC. But SADLEIR himself posed as Amanda Stevens when he engaged in email exchanges with a representative of the Fund and, in that role, sought to dodge questions about his fraudulent conduct by claiming, among others, that “Amanda Stevens” (Sadleir) was on maternity leave. .

In the other scheme (the “UCC Scheme”), SADLEIR arranged the illicit and fraudulent sale and refinancing of assets worth over $3 million which secured the Fund’s loans to Aviron. The Fund had secured its investment in Aviron, among other means, by obtaining UCC liens in 2017 and 2018 on certain intellectual properties and other assets related to Aviron’s films. In 2019, SADLEIR used the forged signature of one of the Fund’s portfolio managers on the releases to remove the Fund’s UCC liens on some of these secured assets. SADLEIR did so in order to sell or refinance the assets without the Fund’s consent, thereby depriving the Fund of its security on outstanding loans. Aviron eventually defaulted on these loans.

Prior to being President and CEO of Aviron, SADLEIR held senior positions in various companies and, early in his career, served as Special Assistant and Director of Presidential Appointments and Planning to a President practicing American.

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SADLEIR, 68, of Beverly Hills, Calif., pleaded guilty to two counts of wire fraud before Judge Engelmayer on Jan. 20, 2022.

In addition to the prison sentence, Judge Engelmayer sentenced SADLEIR to three years of probation and ordered SADLEIR to pay $31,597,000 in forfeiture and restitution.

Mr. Williams praised the work of the Federal Bureau of Investigation. He also thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation.

This matter is being handled by the Bureau’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jared Lenow and Elizabeth Hanft are in charge of the prosecution.

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