Jason Cloth, a film producer with dozens of credits including Joker, Longlegs and Babylon, is facing numerous federal fraud charges and decades in prison in connection with a Ponzi scheme that bilked investors of more than $100 million.
Prosecutors say that Cloth, 60, of Beverly Hills, and his Toronto-based Creative Wealth Media Finance Corp. solicited various clients to invest in purported film and entertainment projects or to fund a gaming entertainment investment platform. He was arrested Tuesday and made his initial court appearance in Los Angeles later that day.
In the 12-page indictment filed Tuesday in U.S. District Court in Chicago (read it here), prosecutors allege that Cloth fraudulently obtained more than $100 million from an Illinois investment adviser, the adviser’s clients and other investors based on false representations about the performance and value of their investments. According to the U.S. Attorney’s Office for the Northern District of Illinois, Cloth knew at the time of the investments that he would use the money for other purposes, including the development of a real estate project in Canada.
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The indictment also alleges that Cloth engaged in a Ponzi scheme by using some investor funds to repay prior investors. Prosecutors seek forfeiture of at least $12.25 million for the projects.
Cloth faces seven counts of wire fraud tied to his involvement in the scheme, and each count is punishable by up to 20 years in federal prison, prosecutors said.
Cloth has scores of producing credits during the past dozen years. Along with the billion-dollar-grossing Joker and the Nicolas Cage horror hit Longlegs, he worked on such films as Babylon, The Birth of a Nation, The Duel, The Addams Family and its 2022 sequel, Judas and the Black Messiah, Ghostbusters: Afterlife, Americana, Goodrich and the TV series Kin.
Cloth and his Toronto-based Creative Wealth Media was the main financier of now defunct producer Bron Studios, which filed for bankruptcy and shut its doors in 2023. Both had previously been the target of investor lawsuits.
In 2021, Cloth, Creative Wealth Media and Bron were named as defendants in a suit by investor Hudson Private for misappropriation of funds and failing to repay millions due on film loans between 2017 and 2020. Hudson said Bron owed it at least $14.3 million plus interest for its outlay on film including Bombshell, Capone, The Survivor and Greyhound. The suit, filed in U.S, District Court in the Southern District of New York, saidCloth made “various knowingly false representations” to Hudson to secure the investments, including that the funds would be entirely used for production and delivery of the films and that Bron could backstop the loans and guarantee repayment.
As the latest suit unfolds in Chicago, Cloth is currently facing a separate proceeding in Canada.
Last year, the Ontario Securities Commission launched enforcement proceedings against Cloth and his company alleging that, between 2013 and 2022, they raised more than $500 million from over 500 investors in Canada and the U.S. to finance various ventures but diverted at least $70 million of that for other uses including loans to a real estate developer, to finance other projects, and to repay earlier investors.
The complaint says Cloth and Creative Wealth also received tens of millions of dollars in fees collected for facilitating the loans.
Final arguments in that proceeding are scheduled to take place before the Capital Markets Tribunal on Aug. 4.
Jill Goldsmith contributed to this post
