Defendant William Sadleir's Sentencing Memorandum (Document 95)
Summary
Defendant William Sadleir's Sentencing Memorandum in United States v. William Sadleir, No. 2:20-CR-299-DMG, filed September 21, 2022 as Document 95 by the Federal Public Defender. It says he made false statements about payroll in loan applications under the CARES Act, has pleaded guilty, and was already sentenced to 72 months in the Southern District of New York, where Judge Paul A. Engelmayer took the PPP fraud into account. It asks for 33 months concurrent with that sentence; Probation recommended 30 months, and the memorandum says the guideline range is 51–63 months at offense level 23 and criminal history category II. The filing includes letters in support.
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“Defendant William Sadleir's Sentencing Memorandum (Document 95).”
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Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 1 of 35 Page ID #:379
1 CUAUHTEMOC ORTEGA (Bar No. 257443)
Federal Public Defender
2 ADAM OLIN (Bar No. 298380)
(E-Mail: Adam_Olin@fd.org)
3 Deputy Federal Public Defender
321 East 2nd Street
4 Los Angeles, California 90012-4202
Telephone: (213) 894-1462
5 Facsimile: (213) 894-0081
6 Attorneys for Defendant
WILLIAM SADLEIR
7
UNITED STATES DISTRICT COURT
8
CENTRAL DISTRICT OF CALIFORNIA
9
WESTERN DIVISION
10
11 UNITED STATES OF AMERICA, Case No. 2:20-CR-299-DMG
12 Plaintiff, DEFENDANT WILLIAM
SADLEIR’S SENTENCING
13 v. MEMORANDUM
14 WILLIAM SADLEIR,
15 Defendant.
16
17 Defendant William Sadleir, through counsel, hereby submits this sentencing
18 memorandum for the Court’s consideration prior to sentencing.
19
20 Respectfully submitted,
21 CUAUHTEMOC ORTEGA
Federal Public Defender
22
23
DATED: September 21, 2022 By: /s/ Adam Olin
24 Adam Olin
25 Deputy Federal Public Defender
Attorney for William Sadleir
26
27
28
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 2 of 35 Page ID #:380
1 I. INTRODUCTION
2 For more than sixty years, William Sadleir led a life of service that could, by all
3 accounts, be described as a success. The child of a middle class Mormon family, Mr.
4 Sadleir became an Eagle Scout, attended Brigham Young University, and served a
5 mission in France with the man who would become his best friend. Mr. Sadleir joined
6 the Peace Corps after BYU, spending his time in the Dominican Republic and
7 Washington, D.C. He entered government service after the Peace Corps, rising to
8 become Special Assistant to President Ronald Reagan, serving as the director of
9 presidential appointments and scheduling, before serving in the State Department as
10 Deputy Assistant Secretary of State. Following his decision to leave the Mormon faith
11 in the early 2000s, and the consequent dissolution of his marriage from that choice, Mr.
12 Sadleir became an entrepreneur in the entertainment industry in Los Angeles, where he
13 met his current wife with whom he shares two young children. Mr. Sadleir founded
14 Aviron Pictures and its predecessor company, through which he distributed films
15 starring some of the industry’s most famous names.
16 But that positive, successful life came to an end in the past years, as quickly
17 became evident in May 2020. Mr. Sadleir was removed from Aviron in late 2019
18 following the discovery of a fraud involving an institutional investor of Aviron’s, for
19 which he has pleaded guilty and been sentenced to 72 months in the Southern District
20 of New York (the “SDNY matter”). Aviron’s employees were largely terminated over
21 the following months, and Mr. Sadleir desperately sought ways to relaunch Aviron,
22 whether in that form or under a different name. And so when he learned of funds
23 designed for keeping people in work under the CARES Act, Mr. Sadleir sought a loan
24 to do it. It was, indisputably, fraudulent: Mr. Sadleir’s applications contained false
25 statements about existing payroll. Mr. Sadleir has pleaded guilty for those submissions.
26 Mr. Sadleir’s conduct, in each case, was serious, meriting a significant sanction.
27 And the sentence imposed in the SDNY matter—72 months—appropriately punishes
28 Mr. Sadleir globally for his conduct. In light of the U.S. Attorney’s Office for the
2
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 3 of 35 Page ID #:381
1 Central District of California’s agreement to recommend a concurrent sentence in this
2 matter, the presiding judge in the SDNY matter, the Honorable Paul A. Engelmayer,
3 expressly sought to fashion a sentence which would adequately punish Mr. Sadleir for
4 both cases. Given that, the appropriate sentence here is one in line with Probation’s
5 recommended sentence of 30 months, concurrent to the SDNY matter. Additional,
6 consecutive time does little to advance the purposes of § 3553(a) for a man who will be
7 released from custody in his early seventies following his only incarceration, with no
8 serious risk of recidivism.
9 For these reasons, Mr. Sadleir respectfully requests that the Court sentence him
10 to a term of 33 months, concurrent to his sentence in the SDNY matter.
11 II. THE PRESENTENCE REPORT
12 The Probation Office calculates a total offense level of 23 and criminal history
13 category I. PSR at 4. The parties agree the offense level is correct. However, in light of
14 Mr. Sadleir’s recent sentencing in the SDNY matter, which occurred after the issuance
15 of the PSR, he agrees with the government that his criminal history category is II. The
16 resulting range is 51–63 months. Probation has recommended a 30 month sentence,
17 concurrent to the SDNY matter, which represents a four-level variance from the
18 guideline range as initially calculated in the PSR. ECF No. 88 at 2. A similar variance
19 under the updated criminal history category would result in a recommendation of 33
20 months.1
21
22
23
24
25
26 1
Mr. Sadleir does request one modification to the PSR. While at the time of the
27 presentence interview his permanent address remained in the Los Angeles area, his
family is planning on relocating to the Tallahassee area. In order to protect the family’s
28 privacy, counsel will independently inform Probation of the new address.
3
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 4 of 35 Page ID #:382
1 III. THE APPROPRIATE SENTENCE
2 A. A Concurrent Sentence, As Recommended by the Government and
3 Probation, Is Appropriate
4 The Court should follow the recommendation of the parties and probation
5 and impose a sentence concurrent to the 72-month sentence imposed in the SDNY
6 matter.
7 1. The SDNY Sentence Already Accounted for the PPP Fraud
8 First, there is no need to impose a period of consecutive time here in an attempt
9 to provide independent punishment for the PPP fraud because the SDNY court
10 specifically fashioned a sentence to address both offenses.
11 The plea agreement in this case—and the Central District USAO’s agreement to
12 recommend concurrent time—had already been filed when Mr. Sadleir appeared for
13 sentencing in the SDNY matter on September 9, 2022. See ECF No. 84 (plea agreement
14 filed on March 10, 2022). In light of that agreement, the Southern District of New York
15 USAO’s urged Judge Engelmayer to “consider the PPP fraud as an aggravating 3553(a)
16 factor in imposing sentence in [the SDNY] case.” Ex. A (SDNY Sentencing
17 Memorandum) at 8. And Judge Engelmayer in fact did so. At sentencing, Judge
18 Engelmayer indicated that he would “need to factor in the PPP fraud in my assessment
19 of the 3553(a) factors. Otherwise, and it’s a matter in practice, unless the Court in
20 California was to disregard that recommendation, it goes unaccounted for.” Ex. B
21 (SDNY Sentencing Transcript) at 9:15–18; see also id. at 9:23–24 (stating that the
22 government was “effectively asking me to sentence Mr. Sadleir in toto considering the
23 California as well as New York charges”). And throughout the hearing, Judge
24 Engelmayer made clear his sentence would account for the PPP fraud because of the
25 concurrent recommendation. For example, he stated that he “just want[ed] to make sure
26 that all agree that the recommendation in California will be for a concurrent sentence
27 with whatever I impose here, and therefore, it’s appropriate for me to consider the PPP
28 fraud, in effect, as part of, if not literally the offense conduct, under 3553(a).” Id. at
4
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 5 of 35 Page ID #:383
1 19:5–9. 2 Put another way, Judge Engelmayer viewed his mandate as “consider[ing] the
2 California conduct but that the price of that is that in the California case the
3 government will bind itself to a recommendation that the sentence there be concurrent,
4 i.e., nothing incremental there.” Id. at 36:5–8; see also id. at 65:11–13 (stating it was
5 “essential that the sentence here at least take into account the fact of the PPP fraud, lest
6 it effectively go unpunished”).
7 Given that the SDNY sentence explicitly addressed the conduct underlying this
8 matter, Mr. Sadleir respectfully submits that the Court need not impose a period of
9 consecutive custody here.
10 2. Seventy-Two Months Is Sufficient to Adequately Punish Mr. Sadleir
11 A total 72 month sentence achieves the purposes of § 3553(a) for Mr. Sadleir’s
12 full range of conduct. Certainly six years in custody is a significant punishment on its
13 own. But for a person in Mr. Sadleir’s position, his fall from grace was precipitous,
14 irrevocably ostracizing him from the entertainment industry community in which he
15 has spent the past decades working. The coverage of his conduct has been constant,
16 since his arrest in May 2020 and through the present, ranging from influential trade
17 publications like Variety and the Hollywood Reporter, to national sources like the Los
18 Angeles Times, Bloomberg, and Reuters. For the rest of his remaining life, Mr. Sadleir
19 will be known for the conduct in these two cases. He will never again work in
20 entertainment, or, likely, a position of prominence or trust in business.
21 The sense of shame and anguish Mr. Sadleir feels over what he did is reflected
22 not only in his own letter to the Court, but also in those of his family and friends. See
23 Exs. F–H. He has destroyed the business that he created from the ground up, and he
24
25 2
It also does not appear that the guidelines would have been different had either
case been transferred under Rule 20, given the significant gulf between the loss
26 amounts in the respective cases. See Ex. B at 19:11–14 (“THE COURT: Had the PPP
fraud been charged here, would it have changed the overall guideline calculation?
27 [SDNY AUSA]: Judge, I don’t—let me just confirm, I don’t believe that’s the case.”).
But because neither U.S. Attorney’s Office would consent to a Rule 20 transfer, the
28 matters were resolved separately.
5
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 6 of 35 Page ID #:384
1 bears the burden of knowing that more than three dozen Aviron employees abruptly
2 lost their jobs as a result of his conduct. Because Aviron’s collapse occurred in January
3 2020, just weeks before the start of the pandemic that largely shut down the movie
4 business and caused the collapse of many other independent theatrical distribution
5 companies, most of those former Aviron workers remain unemployed and without
6 benefits.
7 3. Seventy-Two Months Is Enough to Protect the Public
8 Nor will Mr. Sadleir pose a serious risk of recidivism. Mr. Sadleir is nearly
9 seventy years old, with no criminal history prior to the conduct underlying the SDNY
10 matter and this case. 3 He has never been in custody before. And he has the type of
11 health issues common in men of his age. See PSR ¶¶ 67–68 (reflecting, among other
12 things, multiple stints in his heart and medication for hypertension and cholesterol).
13 Those health issues will only be further compounded by institutional confinement. See
14 Mirko Bagaric et al., A Principled Approach to Separating the Fusion Between Nursing
15 Homes and Prisons, 44 PEPP. L. REV. 957, 968 (2017) (explaining that “the
16 physiological age of an incarcerated individual is approximately ten to fifteen years
17 older than a nonincarcerated person of the same age”). Mr. Sadleir will be in his early
18 seventies when he is released from custody, having spent years away from his two
19 young sons. He will not jeopardize his remaining time with them by reoffending.
20 B. The Offense, While Serious, Is Mitigated By Mr. Sadleir’s Intent to
21 Obtain a Single Loan and His Good-Faith Efforts to Relaunch His
22 Company
23 1. Mr. Sadleir Sought to Relaunch a Film Distribution Company
24 Mr. Sadleir’s conduct was undoubtedly and admittedly criminal. As set forth in
25 the PSR and the plea agreement, he intentionally submitted false statements to the SBA
26
27 3
There is one anomalous petty theft arrest that led to a dismissal, for which there
28 do not appear to be any details. See PSR ¶ 56.
6
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 7 of 35 Page ID #:385
1 that each of the three Aviron entities 4 who applied for a PPP loan had payroll expenses.
2 In reality, those payroll figures largely reflected the employees of Aviron Pictures, the
3 operating Aviron entity whose employees were mostly terminated by February 2020,
4 viewed through the lens of Mr. Sadleir’s aspirations for a relaunched film distribution
5 company. Mr. Sadleir freely admits that neither of those three Aviron entities in fact
6 employed those individuals at the time of the applications. That renders his conduct
7 criminal.
8 But as the Court considers the appropriate sentence under § 3553(a), Mr. Sadleir
9 asks it to consider the context of the offense. Aviron Pictures, which Mr. Sadleir
10 founded and led as the chief executive, was functionally shuttered by February 2022.5
11 The dozens of employees who had worked for him struggled to find new employment
12 in the entertainment industry, particularly as the pandemic raged in its early days. And
13 so upon the announcement of the CARES Act and the PPP funds, Mr. Sadleir took
14 steps in good faith to restart a film distribution company with individuals from Aviron.
15 Around March 2020, Mr. Sadleir began contacting various former Aviron Pictures
16 employees, citing the availability of PPP loans. See, e.g., Ex. C (Gillman 302). These
17 discussions proceeded over the next months, capped off by a Zoom meeting conducted
18 between Mr. Sadleir and other key figures from Aviron Pictures in May 2022. Ex. D
19 (Relaunch Email). While the participants intended on continuing to explore the
20 opportunity, Mr. Sadleir was ultimately arrested a week later. ECF No. 7 (reflecting
21 May 22, 2020 arrest).
22 Hence, in comparison to many PPP fraud prosecutions, Mr. Sadleir intended on
23 deploying PPP funds for legitimate ends. That does not, of course, absolve Mr. Sadleir
24
25
26 4
These entities are Aviron Group, Aviron Releasing, and Aviron Licensing. See
ECF No. 84 at 12 (plea agreement).
27 5
Mr. Sadleir recognizes Blackrock took control following the discovery of his
28 conduct underlying the SDNY matter.
7
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 8 of 35 Page ID #:386
1 of criminal liability. But it bears upon the appropriate sentence, and suggests that the
2 existing 72 month term is sufficient for his conduct.
3 2. Mr. Sadleir Intended to Obtain One Loan and Returned the Funds for
4 the Additional Two
5 The plea agreement and the PSR accurately reflect that Mr. Sadleir applied for
6 three separate PPP loans through JPMorgan Chase (“JPMC”) for a total of
7 approximately $1.7 million. However, it was his intention to obtain a single loan of
8 approximately $560,000. Mr. Sadleir made an initial application for Aviron Group on
9 April 7, 2020. PSR ¶ 23. At that time, Mr. Sadleir consulted with his private banker at
10 JPMC who recommended he re-submit an application under a different entity’s name
11 given ongoing issues with the PPP program. And so Mr. Sadleir thereafter applied on
12 April 9, 2020, for a loan for Aviron Releasing. Id. ¶ 24. Two more weeks passed
13 without results, leading Mr. Sadleir to consult further with his JPMC banker. He then
14 submitted a third application for Aviron Licensing on April 24, 2020. Id. ¶ 25. Then,
15 without warning, all three loans were approved and funded on the same day in a total
16 amount of approximately $1.7 million. Id. ¶ 26. Mr. Sadleir ultimately directed JPMC
17 to return the PPP loans disbursed to Aviron Licensing and Aviron Releasing, leaving
18 the initially requested loan for Aviron Group. Ex. E.; see also PSR ¶ 29 (confirming
19 return of approximately $1.12 million).
20 Thus, Mr. Sadleir’s overall purpose was to obtain the single loan. While all three
21 loans are properly counted under § 2B1.1(b)(1), that he returned the majority of the
22 funds bears consideration under § 3553(a).
23 C. Designation Request
24 Finally, Mr. Sadleir respectfully requests that the Court recommend that he be
25 designated to FPC Pensacola. His family intends on relocating to the Tallahassee area,
26 near which his wife’s family and support system live, as well as his eldest son.
27
28
8
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 9 of 35 Page ID #:387
1 IV. CONCLUSION
2 For the foregoing reasons, Mr. Sadleir respectfully requests that the Court
3 sentence him to a term of 33 months in custody, concurrent to his sentence in the
4 SDNY matter.
5 Respectfully submitted,
6 CUAUHTEMOC ORTEGA
Federal Public Defender
7
8 DATED: September 21, 2022 By: /s/ Adam Olin
Adam Olin
9 Deputy Federal Public Defender
10 Attorney for William Sadleir
11
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14
15
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Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 10 of 35 Page ID #:388
1 DECLARATION OF ADAM OLIN
2 I, Adam Olin, hereby state and declare as follows:
3 1. I am a Deputy Federal Public Defender in the Central District of California
4 assigned to represent William Sadleir in the above-titled action.
5 2. Attached as Exhibit A are true and correct excerpts from the government’s
6 sentencing memorandum in United States v. Sadleir, 20-CR-320-PAE, ECF No. 81
7 (S.D.N.Y. June 7, 2022) (the “SDNY matter”).
8 3. Attached as Exhibit B are true and correct excerpts from the transcript of
9 Mr. Sadleir’s sentencing in the SDNY matter.
10 4. Attached as Exhibit C is a true and correct copy of a March 1, 2022, 302
11 produced in discovery.
12 5. Attached as Exhibit D is a true and correct copy of a May 14, 2020, email
13 between Mr. Sadleir and Aviron-related individuals discussing the relaunching of
14 Aviron.
15 6. Attached as Exhibit E is a true and correct copy of a May 13, 2020, email
16 from Mr. Sadleir to JPMC.
17 7. Attached as Exhibit F is a true and correct copy of a letter from Mr.
18 Sadleir to the Court.
19 8. Attached as Exhibit G is a true and correct copy of a letter from Hannah
20 Sadleir to the Court.
21 9. Attached as Exhibit H is a true and correct copy of a letter from Jonathan
22 Neville to the Court.
23
24 I declare under penalty of perjury that the foregoing is true and correct to the best
25 of my knowledge.
26
27 DATED: September 21, 2022 By: /s/ Adam Olin
28 Adam Olin
Deputy Federal Public Defender
10
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 11 of 35 Page ID #:389
EXHIBIT A
Case Case 1:20-cr-00320-PAE
2:20-cr-00299-DMG Document
Document 95 Filed8109/21/22
Filed 06/07/22 Page
Page 12 of 35 1 of 10 ID #:390
Page
U.S. Department of Justice
United States Attorney
Southern District of New York
The Silvio J. Mollo Building
One Saint Andrew’s Plaza
New York, New York 10007
June 7, 2022
BY CM/ECF
Honorable Paul A. Engelmayer
United States District Judge
Thurgood Marshall United States Courthouse
40 Foley Square
New York, New York 10007
Re: United States v. William Sadleir, 20 Cr. 320 (PAE)
Dear Judge Engelmayer:
The Government respectfully submits this letter in connection with the sentencing of the
defendant, William Sadleir, which is scheduled for June 14, 2022 at 10:00 a.m., and in response
to the defendant’s sentencing submission dated June 1, 2022 (“Def. Sub.”). The parties agree
that the United States Sentencing Guidelines (the “Guidelines” or “U.S.S.G.”) range applicable
to the defendant is 108 to 135 months’ imprisonment, and the Probation Department agrees with
that calculation, as set forth in the Presentence Report (“PSR”). For the reasons set forth below,
the Government respectfully submits that a sentence of approximately 108 months’
imprisonment, at the bottom of the Guidelines range, is appropriate in this case.
The Offense Conduct
William Sadleir was the chairman and chief executive officer of Aviron Pictures, LLC, a
film production and distribution company based in Los Angeles, California. Sadleir participated
in two fraudulent schemes (together, the “Schemes”) relating to an approximately $75 million
investment made by the BlackRock Multi-Sector Income Trust (“BIT”) in Aviron Pictures, LLC
and its associated entities (“Aviron”).
In one scheme, the “Advertising Scheme,” Sadleir misappropriated millions of dollars in
funds that BIT had invested in Aviron. Sadleir represented to BIT that Aviron had in turn
invested this money in pre-paid media credits1 with the media and advertising planning and
1
Pre-paid media credits, also sometimes referred to as “up fronts,” are advance commitments by
large clients for media advertising over a given period, which a media buyer then purchases in
bulk from media outlets, aggregating clients’ commitments and usually obtaining a discount
based on its market power from such aggregation. Sadleir represented, however, that such
Case Case 1:20-cr-00320-PAE
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Filed 06/07/22 Page
Page 13 of 35 8 of 10 ID #:391
Page
Page 8 of 10
COVID-19 pandemic. Prosecutors in the Central District of California have agreed to
recommend that whatever sentence is imposed in the PPP Fraud case run concurrently with the
sentence imposed by the Court in this case. Accordingly, this Court should consider the PPP
fraud as an aggravating 3553(a) factor in imposing sentence in this case.
Additionally, as discussed in the Government’s motions in limine, Dkt. 56, Sadleir
defrauded Cairn Capital (“Cairn”), a London-based alternative credit asset manager. Sadleir
defrauded Cairn by providing false performance data to Cairn regarding the performance of the
movie Serenity and thereby triggering a contractual right to a three-million-dollar payment to
which Sadleir was not entitled (the “Cairn Fraud”). The Government uncovered the Cairn Fraud
in the course of investigating the UCC Fraud, and the facts of the two frauds are intertwined.
Cairn had provided approximately $20 million in principal lending to Aviron, which proceeds
were to be applied toward a movie Aviron was to distribute, Serenity.5 The release of the loan’s
three-million-dollar final advance was conditioned upon Serenity achieving certain agreed-upon
performance metrics. Sadleir provided Cairn with performance reporting documents from a third
party, National Reporting Group, that fabricated the metric that Serenity had achieved
(suggesting it had satisfied the contractual requirement), in order to induce Cairn to release the
final advance. That email from Sadleir and its attachment is appended as Exhibit 1607. Cairn
later received the reporting directly from National Reporting Group; that reporting had a
significantly lower rating than the agreed-upon metric. An email from National Reporting
Group with legitimate data (prior to its being doctored by Sadleir) is attached hereto as Exhibit
1702. After investigating the matter, Cairn circulated a draft complaint to Aviron and demanded
repayment of the final advance as fraudulently obtained. Ultimately, in May and June 2019, the
parties reached a settlement, in which Aviron agreed to repay Cairn the three million dollars of
the final advance (the “Settlement Payment”), in return for Cairn’s agreement not to file suit.
Purely Capital Alpha Limited (“Purely Capital”) made the Settlement Payment to Cairn. Purely
Capital was the recipient of Sadleir’s illicit and fraudulent sale in July 2019 of certain assets
worth an estimated three million dollars that secured BIT’s loans to Aviron – the conduct at issue
in the UCC Scheme. In other words, Sadleir engaged in the UCC Scheme in order to generate
the money he owed for having defrauded Cairn.
The Government respectfully submits that the Court should consider the Cairn Fraud as
relevant under the Section 3553(a) factors, and specifically in response to Sadleir’s emphasis in
his sentencing submission on his lack of criminal history and the claimed absence of a need for
specific deterrence. The Cairn Fraud provides another data point evidencing Sadleir’s
willingness to lie and cheat when it serves his ends, and undermines the defense claim that “the
conduct at the heart of these cases is deeply out of character” for Sadleir. Def. Sub. at 1.
5. Sadleir’s Personal History and Position of Privilege
Sadleir has led an extraordinarily privileged life. He is by all accounts intelligent and
charismatic, and possesses a resume that includes a degree from Harvard Business School. He
served as a special assistant and director of presidential appointments and scheduling to a sitting
5
The loan was secured by, among other things, the Beverly Hills Residence.
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 14 of 35 Page ID #:392
EXHIBIT B
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 15 of 35 Page ID #:3931
M99WsadS
1 UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
2 ------------------------------x
3 UNITED STATES OF AMERICA,
4 v. 20 Cr. 320 (PAE)
5 WILLIAM SADLEIR,
6 Defendant.
Sentence
7 ------------------------------x
8 New York, N.Y.
September 9, 2022
9 11:00 a.m.
10 Before:
11
HON. PAUL A. ENGELMAYER,
12
District Judge
13
APPEARANCES
14
DAMIAN WILLIAMS
15 United States Attorney for the
Southern District of New York
16 BY: JARED P. LENOW
ELIZABETH A. HANFT
17 Assistant United States Attorneys
18 BOIES SCHILLER FLEXNER LLP
Attorneys for Defendant
19 BY: VALECIA BATTLE
MATTHEW L. SCHWARTZ
20
21 Also Present: Special Agent Daniel Mardakhayev, FBI
22
23
24
25
SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 16 of 35 Page ID #:3949
M99WsadS
1 our factual submission here is very detailed and addresses the
2 nature of the conduct and what occurred with respect to
3 BlackRock. So I could only speculate, but I do hope the Court
4 believes it has a full set of facts before it, though.
5 THE COURT: Oh, I didn't feel like anything was
6 lacking from my perspective, but victims often want to be
7 heard, and I was curious why they didn't. And it may well be
8 that they feel that the government's recapitulation captures
9 everything.
10 A curiosity of the case is that there is a separate
11 prosecution in Los Angeles in connection with the so-called PPP
12 fraud. I understand the parties have agreed that the
13 government will recommend that whatever sentence I impose here,
14 the Central District of California sentence run concurrent to
15 it. Therefore, it seems to me that I need to factor in the PPP
16 fraud in my assessment of the 3553(a) factors. Otherwise, and
17 it's a matter in practice, unless the Court in California was
18 to disregard that recommendation, it goes unaccounted for.
19 Are there any victims of the PPP fraud who have
20 indicated they wish to be heard?
21 I recognize they don't have a formal right to be heard
22 in this proceeding, but as a practical matter, given that
23 you're effectively asking me to sentence Mr. Sadleir in toto
24 considering the California as well as New York charges, I'm
25 eager to know whether any of them expressed an interest in
SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 17 of 35 Page ID #:39519
M99WsadS
1 quite a bit of thought. And in light of the factors I've
2 articulated, we do think 108 months would be an appropriate
3 sentence.
4 THE COURT: Apropos of that, let's just discuss the
5 PPP fraud. I just want to make sure that all agree that the
6 recommendation in California will be for a concurrent sentence
7 with whatever I impose here, and therefore, it's appropriate
8 for me to consider the PPP fraud, in effect, as part of, if not
9 literally the offense conduct, under 3553(a).
10 MR. LENOW: We think that's correct, Judge.
11 THE COURT: Had the PPP fraud been charged here, would
12 it have changed the overall guideline calculation?
13 MR. LENOW: Judge, I don't -- let me just confirm, I
14 don't believe that's the case.
15 THE COURT: I think it keeps you in the same band of
16 loss, for whatever value that has; it increases the loss amount
17 but it keeps you, from a strictly guidelines perspective, in
18 the same place, I think.
19 MR. LENOW: Yes, Judge. If I could just have a second
20 to confer with my colleague?
21 THE COURT: By all means.
22 Specifically, the cutoff under 2B1.1 is between 25 and
23 $65 million.
24 MR. LENOW: Right.
25 THE COURT: So from a loss perspective, you'd have to
SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300
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M99WsadS
1 here first.
2 MR. SCHWARTZ: Right.
3 THE COURT: It's going forward today, and my
4 understanding is that the parties here are in agreement that I
5 should consider the California conduct but that the price of
6 that is that in the California case the government will bind
7 itself to a recommendation that the sentence there be
8 concurrent, i.e., nothing incremental there.
9 MR. SCHWARTZ: I mean I --
10 THE COURT: We can't have a situation where you get to
11 say don't really consider the PPP in full here, but government,
12 bind yourself to concurrency there. That's obviously not
13 workable.
14 MR. SCHWARTZ: Well --
15 THE COURT: You've got a guilty smile on your face.
16 MR. SCHWARTZ: This is what, for a very long time, we
17 tried to do -- one agreement that encompassed all of this, and
18 that ended up being unworkable for various reasons of
19 governmental administration. And so we're in the position of
20 being a little bit whipsawed.
21 I don't disagree that it's appropriate for your Honor
22 to consider any facts that you find to be relevant and that are
23 statutorily relevant to sentencing, and I don't disagree with
24 you that it's significant that there's going to be a
25 recommendation of concurrence. At the same time, I think we
SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300
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1 Aviron. You did that by forging the signature of a BlackRock
2 portfolio manager, Randy Robertson, a real live human being, to
3 make it appear that he had authorized the release of UCC liens
4 on those assets, which he most certainly did not. You then
5 sold those assets.
6 And third, there was the PPP fraud. Although your
7 guilty plea to that offense was in a California federal court,
8 the parties have agreed to recommend that the sentence there be
9 concurrent to the sentence I impose here. As a result,
10 assuming that the judge in your California case will heed that
11 recommendation, it's essential that the sentence here at least
12 take into account the fact of the PPP fraud, lest it
13 effectively go unpunished or underpunished. That fraud began
14 after the pandemic started in 2020, and it began after your
15 frauds on BlackRock had been detected, after a criminal
16 investigation into those frauds was underway and known to you,
17 and after BlackRock, in fact, had taken civil action against
18 you.
19 Rather than learning a lesson from all of that, soon
20 after the Paycheck Protection Program had begun to help
21 businesses continue to pay employees during the pandemic, you
22 exploited it, and although there was some equivocation from the
23 back table, I am relying today on the account of that offense
24 that is contained in the plea agreement that you entered into
25 in federal court in California that is attached to the
SOUTHERN DISTRICT REPORTERS, P.C.
(212) 805-0300
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EXHIBIT C
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 21 of 35 Page ID #:399
- 1 of 2 - OFFICIAL RECORD
FD-302 (Rev. 5-8-10) Daa.Jment partldpants have dlgltally signed.
All signatures have been verified by a
c:enllled FBI lnfannatlDn system.
FEDERAL BUREAU OF INVESTIGATION
Date of entry 03/01/2022
KEELY A GILLMAN (GILLMAN), date of birth (DOB) , phone
number - , email address , home address
, , was interviewed by
telephone by Special Agent Nathan Cherney. After being advised of the
identity of the interviewing Agent and the nature of the interview, GILLMAN
provided the following information:
GILLMAN started working at CLARIUS since it was formed around 2014.
Eventually CLARIUS turned into AVIRON PICTURES. GILLMAN worked for AVIRON
PICTURES. There was no one else at AVIRON with the last name "Gillman." At
AVIRON PICTURES, GILLMAN was the Vice President of Research, and later
became the Senior Vice President of Research. GILLMAN's salary was
approximately . GILLMAN was terminated from AVIRON PICTURES around
January 2020 as part of the layoffs.
AVIRON GROUP, AVIRON RELEASING, and AVIRON LICENSING were AVIRON-related
entities. GILLMAN thought of AVIRON GROUP, AVIRON RELEASING, and AVIRON
LICENSING as other divisions of AVIRON PICTURES that dealt more with
funding. GILLMAN was only ever employed by AVIRON PICTURES, not AVIRON
GROUP, AVIRON RELEASING, or AVIRON LICENSING.
GILLMAN was never offered a job from or received payroll from AVIRON
PICTURES, AVIRON GROUP, AVIRON RELEASING, or AVIRON LICENSING after being
terminated in January 2020. GILLMAN started working for
around mid-February 2020.
Around March 2020, WILLIAM SADLEIR (SADLEIR) mentioned potentially
starting a new company and getting funding. SADLEIR did not offer GILLMAN a
job after GILLMAN was terminated from AVIRON PICTURES in January 2020.
SADLEIR mentioned if he started a new company SADLEIR could get Paycheck
Protection Program (PPP) loans for funding to keep the new company afloat.
SADLEIR told GILLMAN the Government was giving money to companies to keep
them afloat. SADLEIR told GILLMAN the PPP loans were an option to get the
new company off the ground.
Investigationon 02/25/2022 at Los Angeles, California, United States (Phone)
File# 29O-LA-3267808 Datedrafted 02/28/2022
by CHERNEY NATHAN ALEXANDER
This document contains neither recommendations nor conclusions of the FBI. It is the property of the FBI and is loaned to your agency; it and its contents are not
to be distributed outside your agency.
USAO_00005103
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 22 of 35 Page ID #:400
FD-302a (Rev. 5-8-10)
29O-LA-3267808
(U) Interview of Keely A Gillman
ContinuationofFD-302 of
---------------------- , On 02 /25 /2 022
(2.25.2022) , Page 2 of 2
SADLEIR lost control of AVIRON PICTURES around December 2019. SADLEIR was
not allowed in AVIRON PICTURES' office. SADLEIR was not in control of AVIRON
PICTURES in any way in April and May 2020.
GILLMAN would accept service of a trial subpoena by email.
USAO_00005104
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EXHIBIT D
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Adam Olin
From: Claire Heath
Sent: Thursday, May 14, 2020 3:38 PM
To: William Sadleir
Cc: Greg Forston; jeffelefterion Keely gillman; yarra26 kentpreston
Subject: Re: Business Relaunch Meeting
Hi, there ‐
Look forward to “seeing” you all tomorrow at 3:30p!
Zoom meeting link below:
https://us02web.zoom.us/j/86800906031
Thanks!
On May 14, 2020, at 3:33 PM, William Sadleir wrote:
Hi All:
I have not yet heard back from Jeff, but the general consensus is to have the meeting via Zoom, which
Claire has offered to set up for 3:30pm tomorrow.
I'm looking forward to a productive discussion.
Warmest regards,
Will
On Thu, May 14, 2020 at 10:55 AM Greg Forston wrote:
I can meet at 3:30 tomorrow. I certainly can meet by video, but go back and forth on my
willingness to meet in person tomorrow.
From: William Sadleir
Sent: Thursday, May 14, 2020 9:58 AM
To: Greg Forston ;
Claire Noble ; Keely gillman
Subject: Business Relaunch Meeting
Hi Claire, Keeley, Jeff, Hannah, Preston, and Greg:
I trust you are all well. I'd like to convene a senior summit tomorrow afternoon to discuss relaunching a
production and distribution company.
1
Case 2:20-cr-00299-DMG Document 95 Filed 09/21/22 Page 25 of 35 Page ID #:403
I'm happy to host a covid‐controlled meeting tomorrow afternoon at my house, or if it's more
convenient and attractive to you, host a video conference call around 3:30pm.
Please let me know if you're available tomorrow to meet or connect, and your preference of venue.
In the meantime, please review the two articles that will provide some guidance to our discussion.
Following a successful meeting tomorrow, with a general agreement on direction, I'd like to convene an
expanded meeting with additional prospective team members later next week.
With warmest regards,
Will
2
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EXHIBIT E
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Adam Olin
From: William Sadleir
Sent: Wednesday, May 13, 2020 12:15 PM
To: Esposito, Donna Marie
Cc: Hannah Kadadu
Subject: Bank Transfer Instructions & Authorization
Dear Donna:
To further the objectives discussed in my PPP resolution email, can you please arrange the following bank
transfers:
1. From Personal Account , please transfer to Aviron Group account
$490,000.00.
2. From Personal Account , please transfer to Aviron Group account $
98,109.97.
3. From Personal Account , please transfer to Aviron Group account
$180,000.00
4. Then, from Aviron Group account , please transfer to Aviron Licensing
$561,045.00
5. Then, from Aviron Group account , please transfer to Aviron Releasing
$561,045.00
As discussed, please return the PPP loans from Aviron Licensing and Aviron Releasing, both in the
amounts of $561,045.00, by the deadline tomorrow.
With this completed, I would expect that all of our personal accounts and the Aviron accounts will be un-
frozen. We will use the balance of ~$308K in Aviron Group, along with a subsequent contribution by our
investors of ~$282K, to deploy the $590,624 funds as set forth in the PPP program for retaining/rehiring
the Aviron employees. We will then follow the procedures for SBA loan forgiveness consideration at the 8
week from disbursement period. Any balance not forgiven will be repaid by Aviron Group.
Please let me know when Chase has completed the transfers and PPP refunds, as instructed and
authorized above.
Thank you,
Will
William Sadleir
Founder & Owner
Aviron Group, LLC
To help protect y our priv acy , Microsoft Office prev ented automatic download of this picture from the Internet.
Logo
Beverly Hills, CA, 90210
| Mobile
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EXHIBIT F
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Honorable Dolly M. Gee
United States District Judge
Southern District of California
United States Courthouse
Courtroom 8C, 8th Floor
350 West 1st Street, Los Angeles, CA, 90012
Re: Sentencing of William Sadleir
Dear Judge Gee:
The remorse that I feel for the many people and institutions that were harmed by my actions is profound.
I am ashamed that I betrayed the foundations of honesty that I’ve been taught throughout my life. I chose to
rationalize my actions by convincing myself that the ultimate ends—to put my friends and colleagues back to
work—justified the compromises with truth that I deployed. In the more than two years since my arrest and the
ensuing public humiliation, I’ve reflected almost daily on the innocent victims of my crimes. Not only will my
conviction and prison term be a lifelong source of embarrassment for my two little boys, who have looked up to
me and trusted me to be a reliable example of honesty, but, my darling wife and loving companion, Hannah, now
has the lonely burden of raising two little boys without the presence of their dad. My actions were immensely
selfish and thoughtless, and Hannah is going to pay a far greater price for my crimes.
I am going to have a significant period of time in custody, and it’s up to me to make that time as
productive and purposeful as possible. I have a clear plan how to make an honest living, to care for my family, to
be a positive force for social change, and to eventually make restitution, upon my release. I commit myself during
my period of incarceration to contributing my time, education, and talent to helping other inmates who have more
challenges and who have had less opportunities.
I accept full responsibility for my crimes. I am truly sorry for the pain I’ve caused to so many innocent
victims, including the Small Business Administration. What I did was wrong, and there is no justification. I can
only hope that taking responsibility for my actions will be the first step in the next chapter of my life, and that my
subsequent conduct will be a source of pride for my children and my wife. Thank you for your consideration.
Sincerely,
William K. Sadleir
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EXHIBIT G
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EXHIBIT H
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Jonathan E. Neville, Esq.
Honorable Dolly M. Gee
United States District Judge
Southern District of California
United States Courthouse
Courtroom 8C, 8th Floor
350 West 1st Street, Los Angeles, CA, 90012
Re: Sentencing of William Sadleir
Dear Judge Gee:
My name is Jonathan Neville. I’ve known the defendant, William Sadleir, for almost fifty years. We
served together as volunteer missionaries in France when we were both 19 years old. We then became college
roommates for a time, where I knew him as Bill. I was his Best Man at his wedding. We’ve successfully
worked together in several business ventures.
Ever since I’ve known Bill, I’ve observed his determination and perseverance in the face of immense
challenges. More than anyone I’ve known, Bill reminds me of the famous description by Theodore Roosevelt:
“It is not the critic who counts. Not the man who points out how the strong man stumbled or where the
doer of deeds could have done better. The credit belongs to the man who is actually in the arena,
whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes up
short again and again; who knows the great enthusiasms, the great devotions; who spends himself in a
worthy cause.”
One example of this was memorialized in a 1988 story in Inc. Magazine, which covered Bill’s success in
navigating a challenging period with his first business venture:
“Most reasonable people in his situation would have read the handwriting on the wall and accepted
the consequences. But not Sadleir. Against overwhelming odds, he scrambled like nobody I have ever
seen. Sadleir's steadfast refusal to surrender makes me wonder. Was he crazy, or do most people give
up too soon?”
I’ve read the indictment and I understand what it says Bill has done. Knowing Bill, I’m not surprised he is
acknowledging his mistakes and is taking responsibility for his actions.
He told me that he is not going to let this mistake define his personal legacy, but rather use it as a profound
catalyst for reinvention. He plans to use his incarceration to contribute to society in a variety of ways, such as
by writing episodic documentary features to bring national awareness and meaningful change to important
social issues.
Despite whatever Bill’s mistakes regarding the PPP, I hope you will tailor a sentence that, while not
minimizing or ignoring those mistakes, will allow Bill to continue to lead a productive life of which his
children, family, and friends will be proud.
Sincerely,
/s/ Jonathan E. Neville
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