(Part 3 of an ongoing series)
Fraud begins with individuals, not companies. As a business ethics keynote speaker, business ethics consultant and author, I have learned that companies caught in scandals were driven there by employees who felt to be above the law.
Ethical Dilemmas: How scandals damage companies
William Sadleir, who has just turned 68, felt himself to be above the law. He was the former mogul and CEO of Aviron pictures in Hollywood. The company was founded in 2017 and produced a number of decent movies, mainly lower budget offerings.
In 2020, as the reality of the pandemic swept the nation, the movie company fired CEO and board member Sadleir after one of the primary investors in the company discovered that Sadleir was an embezzler. The indulgence would ultimately kill the company.
Sadleir then discovered the newly-created world of PPP funds. He applied for relief to the tune of $1.7 million. One might think the money would have been somehow used to save the company he destroyed.
After all, the least he could do to save a bit of self-respect would have been to pay the salaries of the 33 employees who were facing unemployment. According to the Department of Justice:
“Sadleir obtained the loans for three Aviron entities by falsely representing that the funds would be used to support payroll expenses for 33 employees at each company, when in fact the entities were no longer operational. Within days of the loans being funded on May 1, 2020, Sadleir transferred nearly $1 million to his personal checking account.”
He was no more connected to his employees than he had been to the truth. It was determined he spent most of the money on utility bills, mortgage expenses, and legal fees. I suppose in his Hollywood world, keeping up appearances was infinitely more important than helping those he had wronged. Any remaining reputation he might have cultivated was destroyed.
The government seized his accounts and grabbed all but around $300,000. He has pled guilty to wire fraud and other charges. This was in addition to the charges already against him for embezzling funds from the company. He could go away for five years for his greed equalling his scandals.
The logical question some might ask was “How could someone be so unethical in committing double-fraud?”
As a business ethics keynote speaker, business ethics consultant and ethics book author, I have seen these scandals repeat themselves hundreds of times where seemingly intelligent and engaging executives literally destroy companies.
It’s all about ethics
When there are no ethical expectations and where there are no training programs or reinforcement, arrogance, posturing and “appearance” take the place of good choices. Other than this scandal, I have no history of William Sadleir, but you would have to go a long way in convincing me that these were his only brushes with poor choices.
He moved to a point in his work life where he had eliminated most of those who might have challenged him through oversite and behavioral expectations. His need for power and money overruled common sense. As an ethics speaker, I do find it interesting that he spent a good portion of the diverted funds on legal fees, almost as though trying to insulate his situation with a lawyer ahead of time.
“Hollywood” may be a strange construct however; it would be wrong to characterize everyone who works in the film industry as unethical. I do agree, that inflated egos make it difficult for people to cope with the simple truth that every choice has a consequence.
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