The U.S. government has charged Canadian film financier Jason Cloth with seven counts of wire fraud over accusations that he defrauded clients of over $100 million by persuading them to invest in undelivered film and entertainment projects.

In a statement on Wednesday, the U.S. Department of Justice announced that Mr Cloth was arrested in Los Angeles on Tuesday, on the same day the indictment against him was filed in the U.S. District Court in Chicago.

“Jason Cloth , 60, of Beverly Hills, California, was charged with seven counts of wire fraud in an indictment unsealed Tuesday in the U.S. District Court in Chicago.  Cloth was arrested on Tuesday in Los Angeles, California. He made his initial court appearance on Tuesday in the U.S. District Court in Los Angeles,” the statement read. 

According to the attorney’s office, between 2016 and 2026, Mr Cloth, using Toronto-based Creative Wealth Media Finance Corp, persuaded several investors to invest in purported film and entertainment projects or to fund a gaming entertainment investment platform.

The defendant allegedly obtained more than $100 million from investors who believed they were funding entertainment projects but unaware that Mr Cloth was diverting the money to personal ventures, including the development of a real estate project in Canada. 

“Cloth knew at the time of the investments that he would use the money for other purposes, including the development of a real estate project in Canada,” the attorney’s office said. 

Additionally, the prosecutors accused Mr Cloth of engaging in a Ponzi scheme by using some investor funds to repay prior investors, with the indictment subsequently seeking forfeiture of at least $12.5 million from the defendant. 

The attorney’s office also disclosed that each count of wire fraud is punishable by up to 20 years in federal prison.

“The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  

“If convicted, the court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines,” the office added.