Film producer William Sadleir has been arrested by federal authorities on charges that he attempted to defraud the Paycheck Protection Program out of about $1.7 million.
Sadleir, who founded Los Angeles-based Aviron Pictures, was taken into custody without incident on Friday, according to KNBC.
Prosecutors allege that he applied for loans from the Small Business Administration as part of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
“A series of misrepresentations”
Although Sadleir sought the funds under the pretext that he would use the money to cover his company’s payroll commitments, he is accused of using the money for his own personal expenses.
He faces four charges: wire fraud, bank fraud, making false statements to a financial institution, and making false statements to the Small Business Administration. If convicted, he could face a prison sentence of as much as 82 years.
“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,” said U.S. Attorney Nick Hanna.
Hanna’s statement did not indicate why Sadleir was in such financial straits, but he emphasized his office’s intention to vigilantly pursue such allegations of fraud.
“We will act swiftly”
“The Paycheck Protection Program was implemented to help small businesses stay afloat during the financial crisis, and we will act swiftly against those who abuse the program for their own personal gain,” he said.
Sadleir’s arrest is not the only legal trouble he is facing. He is also named in a New York lawsuit that claims he defrauded an investment fund of approximately $14 million, which he then used to purchase and renovate a mansion in Beverly Hills, California.
In December, he was reportedly ousted from his place as chairman and CEO of Aviron after nearly five years in charge of the production company.
A number of companies have returned PPP loans amid increased scrutiny that they were circumventing the program’s intended purpose.
As millions of Americans remain unemployed and small businesses struggle through a continued economic slowdown, taxpayers are sure to appreciate the fact that authorities are holding to account those who might try to take advantage of the situation.