Jason Cloth, the Hollywood film producer behind the Oscar-winning hit Joker, has been arrested over allegations he masterminded a Ponzi scheme that defrauded clients of more than $100 million (£75 million).
Allegations and charges
Cloth, 60, is accused of using his Canadian company, Creative Wealth Media Finance Corp, to lure investors into backing film projects and a gaming platform with false promises about the value and performance of their investments. Federal prosecutors allege the scheme ran from 2019 until this year, with Cloth fraudulently obtaining more than $100 million from an Illinois-based investment adviser, the adviser's clients and other investors.
According to the US Attorney Office for the Northern District of Illinois, the operation worked as a Ponzi scheme, with money from newer investors allegedly being used to repay earlier ones. Prosecutors also alleged some of the cash was diverted towards other ventures, including a real estate development in Canada.
Arrest and court appearance
Cloth, of Beverly Hills, has been charged with seven counts of wire fraud in Chicago. Authorities said on Wednesday that he was arrested Tuesday and made his initial court appearance in Los Angeles. If convicted, he could face up to 20 years behind bars on each count. Prosecutors are also seeking the forfeiture of at least $12.25 million (£9.2 million).
Previous legal issues
The arrest comes two years after Cloth was ordered to pay $19.6 million in a separate civil fraud case in Florida, according to Variety. He failed to appear for the trial, where a jury found he had defrauded an investor in The Pathway - a TNT documentary series about the NDA draft - out of $6.6 million. The jury also awarded an extra $13 million in punitive damages.
Film career
Alongside Joker, starring Joaquin Phoenix, IMDb credits Cloth as a producer on several other major films, including Babylon, Longlegs, Ghostbusters: Afterlife and The Ministry of Ungentlemanly Warfare.
