A prominent figure in the Hollywood film industry responsible for the acclaimed movie Joker is facing allegations of orchestrating a Ponzi scheme that deceived investors out of more than $100 million (£75 million).
Jason Cloth, aged 60, is accused of utilizing his Canadian company, Creative Wealth Media Finance Corp, to entice investors into supporting film projects and a gaming platform by making false assurances about the profitability of their investments.
According to federal prosecutors, the fraudulent scheme operated from 2019 to the present year, during which Cloth allegedly obtained over $100 million from an investment adviser based in Illinois, the adviser’s clients, and other investors.
The prosecution asserts that the operation functioned as a Ponzi scheme, with funds from new investors purportedly being used to repay earlier ones, as per the US Attorney Office for the Northern District of Illinois.
Prosecutors also claim that some of the funds were diverted to other ventures, including a real estate development in Canada.
Cloth, residing in Beverly Hills, has been charged with seven counts of wire fraud in Chicago, as announced by authorities on Wednesday. Following his arrest on Tuesday, he appeared in court for the first time in Los Angeles.
If found guilty, he could potentially face up to 20 years in prison for each count. Prosecutors are additionally seeking the forfeiture of at least $12.25 million (£9.2 million).
This arrest follows a previous legal issue where Cloth was ordered to pay $19.6 million in a separate civil fraud case in Florida. He failed to attend the trial, and a jury determined that he had defrauded an investor in The Pathway, a TNT documentary series, out of $6.6 million, resulting in an additional $13 million in punitive damages.
Apart from his involvement in Joker, featuring Joaquin Phoenix, Cloth has produced various other notable films including Babylon, Longlegs, Ghostbusters: Afterlife, and The Ministry of Ungentlemanly Warfare.
In addition to his contributions to Joker, Cloth has also played roles in the production of films such as Longlegs, Babylon, and Ghostbusters: Afterlife.