Jason Cloth, a Canadian financier with credits on dozens of films including “Babylon” and “Joker,” was hit with a $19.6 million verdict last week after failing to appear at a fraud trial in West Palm Beach, Fla.
A seven-member jury found that Cloth defrauded an investor on “The Pathway,” a TNT docuseries about the NBA draft, out of $6.6 million. The jury also awarded $13 million in punitive damages.
Cloth is also facing a class action suit in Chicago, where is accused of defrauding investors on “Ghostbusters: Afterlife,” “Monkey Man” and other films out of more than $80 million.
“He’s made a career of telling people whatever they want to hear in order to get what he wants,” said attorney David Jonelis, who represented the plaintiff in the Florida case.
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At the two-day trial, Jonelis presented evidence that Cloth had solicited the investment on “The Pathway” by claiming that it had been greenlit for five seasons. That was not the case, and in fact it ran only for a single season in 2022.
Cloth also told the investor, Robert Harris, that he was the only source of funding for the show, and therefore could expect to be first in line to be repaid. Through his company, Harris agreed to loan $6,573,024, with the expectation that he would be repaid with 15% interest. He did not receive any of the money back, according to his complaint.
Cloth informed the court last week that he would not attend the trial, as he did not have a defense lawyer.
“I am not in a position to defend myself at trial since I am not an attorney and I would not know how to represent myself at the trial,” he wrote.
In earlier communications, Cloth had indicated that the bankruptcy of his company, Creative Wealth Media Finance Corp., and its studio partner, Bron Studios, had left him in a “very difficult financial situation,” and he was not able to pay his lawyers.
He also sought a delay in the trial, noting that he would be at the Cannes Film Festival this week, where he is selling three films.
In an email to Variety on Friday, he said it was “a very trying time for me.”
In addition to the “Pathway” claim, Harris also alleges that he has not been repaid loans totaling $6 million for seven film projects, including “Monkey Man” and “Ghostbusters: Afterlife.” Cloth’s company, Creative Wealth, defaulted on that claim, and Harris’ attorneys are seeking $6.9 million including interest.
In the Chicago case, filed in March, Cloth is accused of working with two salesmen to solicit investments in a series of film projects. The suit accuses Cloth of operating a Ponzi scheme, using investor money to pay off other investors, and paying out “whatever he felt like whenever he felt like regardless of the success or failure of the project invested in.”
Alexander Loftus, the attorney who filed the case, said that Cloth had taken advantage of clients who are not “super sophisticated” about Hollywood.
“Cloth raises money from salesmen in Middle America who know rich people that don’t know anything about movies,” he said. “Cloth makes promises he can’t deliver on and takes the money.”
Cloth launched a new company, C2 Motion Picture Group, in 2022. On its website, the company says it has worked on “Mission: Impossible — Dead Reckoning Part One” and “Transformers: Rise of the Beasts,” among others.
Cloth’s former attorney, William Fried, withdrew from the case in February due to unpaid legal bills.
In a statement to Variety on Monday, he said he would appeal the verdict.
“While we have great respect for the Court and for Judge Rosenberg, we believe there were significant errors made by the Court — including refusing a continuance so that we could appear on behalf of Mr. Cloth at trial — which warrant a reversal,” Fried said. “We look forward to an opportunity to present an appeal to the 11th Circuit Court of Appeals.”
