Film financier Jason Cloth indicted in alleged $100M Ponzi scheme
Film producer Jason Cloth, who financed “Joker,” “Ghostbusters: Afterlife” and dozens of other movies, has been indicted by a federal grand jury on wire fraud charges in connection with what prosecutors say was a $100 million Ponzi scheme.
The indictment against Cloth, 60, was unsealed Tuesday in U.S. District Court in Chicago. Cloth was arrested the same day in Los Angeles, where he made his first court appearance, the U.S. Attorney's Office for the Northern District of Illinois said.
The indictment alleges Cloth solicited money from investors, telling them the funds would be used for a film or a video game platform. Instead, the indictment alleges, he used the money for other projects like a Canadian real estate development and to pay off earlier investors.
Court records do not reveal if Cloth has obtained an attorney in the criminal case. Several attorneys representing Cloth in lawsuits in Florida and California did not immediately respond to a request for comment.
The indictment says Cloth operated a Canada-based company called Creative Wealth Media Finance Corp., and that starting in 2019 he solicited money from several clients to invest in film and entertainment projects. The indictment says he got more than $100 million from one investment adviser in Illinois, the adviser's clients and others, and that he lied to the investors about the value of their investments.
He's charged with seven counts of wire fraud, each punishable by up to 20 years in prison. Cloth is also being asked to forfeit more than $12 million. The FBI asked that anyone who believes they might have been a victim contact the agency's Chicago office by filling out an online form.
It's not the first time the film financier has faced allegations of financial misdeeds. He's been named in several lawsuits from investors in recent years, including a class-action lawsuit alleging film-funding fraud in Chicago, a Florida lawsuit from an investor who says Cloth's company breached contracts for several entertainment loans, and a lawsuit from investors in New York that was later dismissed. Cloth has fought the claims in Chicago and Florida, and those cases are ongoing.
Last year the Ontario Securities Commission started an enforcement proceeding against Cloth and his company, bringing allegations that are similar to the Illinois indictment. The commission alleges Cloth and his company raised more than $500 million from investors for various film and television projects, and then diverted $70 million of the funds to other uses, like repaying earlier investors. That case is ongoing.
___ Boone reported from Boise, Idaho.
