Prosecutors say Sadleir, the former head of indie distributor Aviron Pictures, fraudulently filed bank loan applications seeking more than US$1.7 million from a federal scheme set up in the wake of the pandemic.
He allegedly did this after falsely telling JPMorgan Chase and the Small Business Administration the funds were meant for his former company Aviron Group, which had terminated him in December and where he has no current role.
Some of the money was used to make payments to American Express cards belonging to Sadleir and his wife, as well as to pay off a auto loan, according to the charge sheet.
To help pull off the scheme, Sadleir went as far as creating a fake identity named "Amanda Stevens" to send emails claiming Aviron had purchased $27 million in advertising credits, officials said.
Over the past decade, the 66-year-old Hollywood mogul has overseen the distribution of a number of independent films across the United States, including My All American (2015), Kidnap (2017), The Strangers: Prey at Night (2018), A Private War (2018), Destination Wedding (2018), Serenity (2019), and After (2019). In a separate case, the Securities and Exchange Commission also accuses Sadleir of violating antifraud provisions of securities laws. Two years later, the film studio released the romantic drama, After, starring the fund manager's actress daughter, Rebecca Lee Robertson.
Sadleir, 66, is accused of misappropriating millions in funds from his film company.
At the time of the loan, BlackRock Multi-Sector Income Trust had $750 million in assets, so it appeared "an unusually aggressive bet" to funnel 10 percent of that sum into Aviron, a "small, privately held movie company".
'I can't tell you that he made the decision purely because his daughter was in the movie, but I can tell you BlackRock approved that financing after turning down the opportunity to finance several earlier movies, ' Sadleir said.
Sadleir faces two counts of wire fraud and one count of aggravated identity theft in NY, as well as wire fraud, bank fraud, false statements to a financial institution and lying to the Small Business Administration in Los Angeles.
"Immediately upon receiving the funds, a significant amount was diverted to Sadleir's personal accounts and used for personal expenses", the California complaint said.
However, within days of receiving the emergency funding, prosecutors said Sadleir redirected almost $1 million to his personal bank account, used it to pay down debt on his and his wife's American Express cards and attempted to make a $40,000 payment on a auto loan, which his bank ultimately blocked.
Sadleir is charged with wire fraud, bank fraud, making false statements to a financial institution, and making false statements to the Small Business Administration.
If convicted, each count of wire fraud could carry as long as 20 years in prison, and the identity theft charge comes with a mandatory two-year sentence.
A BlackRock spokesman said the company, which has filed its own lawsuit against Sadleir, is "pleased that the government has moved swiftly to investigate and bring Mr. Sadleir to justice".