A Toronto-based film producer in the midst of enforcement proceedings brought by the Ontario Securities Commission (OSC) is now also facing criminal charges in the U.S., alleging that he defrauded U.S. investors.
A federal grand jury in Chicago returned an indictment charging Jason Cloth with seven counts of wire fraud in connection with investments in film and other entertainment projects.
Last year, the OSC launched enforcement proceedings against Cloth and his company, Creative Wealth Media Finance Corp., alleging that, between 2013 and 2022, they raised more than $500 million from investors to finance various ventures, but that they diverted at least $70 million of that money for other uses, including loans to a real estate developer, to finance other projects, and to repay earlier investors.
Those allegations have not been proven. Final arguments in that proceeding are scheduled to take place before the Capital Markets Tribunal next week.
Now, according to the indictment, U.S. authorities are alleging that Cloth “fraudulently solicited and obtained over US$100 million from [a U.S. investment advisor], [the advisor’s] clients, and other investors as investments made through Creative Wealth Media Finance Corp., based on false representations about the performance and value of the investments.”
Those allegations have not been proven either, and Cloth is presumed to be innocent of the criminal charges.
Cloth was arrested in Los Angeles, and made his first appearance in U.S. district court.