Carlos Watson, the founder and CEO of the beleaguered Ozy Media, was arrested and charged with fraud this week, according to federal court records.
Watson was indicted on charges of “engaging in a scheme to defraud OZY’s investors, potential investors, potential acquirers, lenders, and potential lenders.”
The indictment alleges that Watson committed fraud “through material misrepresentations and omissions” concerning Ozy Media’s finances, investors, business partners, contracts, and potential acquisitions.
An Ozy Media spokesperson did not immediately respond to a request for comment on Thursday morning. A Department of Justice spokesperson indicated that Watson was released on a $1 million bond and is scheduled to return to court on March 8.
Watson’s attorney, Lanny Breuer, confirmed the arrest, expressing disappointment: “I am deeply disappointed by the events of today. We were engaged in a good faith and constructive dialogue with the Government.
Given the Department’s claims of promoting such dialogue, I do not understand the dramatic decision to arrest Carlos today.”
“As alleged, Carlos Watson is a con man whose business strategy was based on outright deceit and fraud – he ran Ozy as a criminal organization rather than as a reputable media company,” stated Breon Peace, the United States Attorney for the Eastern District of New York.
A law enforcement source reported that Watson was arrested by the FBI at the Hotel NH Collection at 22 East 38th St. in Manhattan.
If convicted, Watson faces a mandatory minimum sentence of two years and a maximum of 37 years in prison.
Ozy’s former chief operating officer Samir Rao and chief of staff Suzee Han have already pleaded guilty to charges related to their roles in the scheme, according to the US attorney’s office.
The charges follow a 2021 exposé which revealed some of Ozy Media’s alleged deceptive practices.
This article led to increased scrutiny from other news organizations, resulting in a series of stories that ultimately jeopardized the digital media startup.
Semafor reported earlier this month that Ozy Media was attempting a comeback, with Watson pitching potential advertisers and investors to support the company.
