Jason Cloth, the financier behind executive producer credits on "Joker," "Babylon" and "Ghostbusters: Afterlife," was arrested Tuesday in Los Angeles and indicted in Chicago on seven counts of wire fraud. Prosecutors allege he ran a $100 million Ponzi scheme that siphoned money meant for film and gaming projects to cover losses in a Canadian condominium development. Each count carries a theoretical maximum of 20 years. The indictment seeks $12.25 million in reimbursement, and the FBI's Chicago field office is asking additional victims to come forward.
The pitch was always the same hit
The core of Cloth's sales pitch, according to Chicago attorney Alexander Loftus, was his stake in "Joker", a genuine blockbuster that he allegedly oversubscribed, leaving early investors unpaid. Loftus, who represents a class of 137 investors claiming $80 million in losses on films including "Ghostbusters: Afterlife" and "Monkey Man," describes a cycle: new money pays off the last deal, and the next deal pays off the new money. The plaintiffs settled last year with Sanford Schmidt, the adviser who recommended the investments, but are still chasing roughly $60 million from Schmidt's insurance carrier.
Canadian bankruptcy revealed the scale
Cloth's company, Creative Wealth Media Finance, filed for bankruptcy in Canada in 2023. The Ontario Securities Commission alleged that over the preceding decade Cloth had raised about $500 million from 500 investors across the United States and Canada, collecting more capital than the productions required and diverting the surplus. The OSC said the firm made $50 million in unsecured loans to a developer building condos in Kingston, Ontario, money that had not been repaid when the bankruptcy hit.
A civil trail that didn't slow him down
A Florida jury ordered Cloth to pay $19.6 million to an investor in a TV project after a two-day trial in West Palm Beach last year. Cloth did not attend, telling the judge he planned to be at the Cannes Film Festival instead. He appealed; the appellate court upheld the verdict. The criminal indictment now raises the stakes from civil liability to federal prison time, but the pattern, new premieres, old debts, and a festival circuit alibi, has been on the record for years.