Film Financier Behind 'Joker' Indicted in Alleged $100 Million Ponzi Scheme
Jason Cloth, who financed numerous films, faces federal wire fraud charges in connection with an alleged scheme that defrauded investors.
Film producer Jason Cloth, known for financing movies such as "Joker" and "Ghostbusters: Afterlife," has been indicted by a federal grand jury on wire fraud charges. Prosecutors allege he operated a $100 million Ponzi scheme.
The indictment, unsealed Tuesday in U.S. District Court in Chicago, charges Cloth, 60, with seven counts of wire fraud. He was arrested the same day in Los Angeles and made his initial court appearance there, according to the U.S. Attorney's Office for the Northern District of Illinois.
Prosecutors allege that Cloth solicited money from investors, claiming the funds would be used for film or video game projects. However, the indictment states that he instead diverted the money to other ventures, including a real estate development in Canada, and to repay earlier investors.
Cloth operated a Canada-based company called Creative Wealth Media Finance Corp. Beginning in 2019, the indictment claims, he solicited funds from clients to invest in film and entertainment projects. He is accused of receiving over $100 million from an Illinois-based investment adviser, the adviser's clients, and others, while misrepresenting the value of their investments.
Each wire fraud count carries a maximum penalty of 20 years in prison. Federal authorities are also seeking forfeiture of more than $12 million from Cloth. The FBI has established an online form for individuals who believe they may have been victims to provide information to its Chicago office.
This is not the first time Cloth has faced allegations of financial misconduct. He has been named in several lawsuits from investors in recent years, including a class-action suit in Chicago alleging film-funding fraud, a Florida lawsuit claiming breach of contract for entertainment loans, and a New York lawsuit that was subsequently dismissed. Cloth is contesting the claims in the ongoing Chicago and Florida cases.
Last year, the Ontario Securities Commission initiated an enforcement proceeding against Cloth and his company, alleging actions similar to those in the Illinois indictment. The commission claims Cloth and his company raised more than $500 million from investors for film and television projects, then diverted $70 million of those funds for other purposes, such as repaying earlier investors. That case is still active.