Carlos Watson, the founder of digital entertainment company Ozy Media, was arrested on Thursday (Feb. 23) and charged with securities fraud. The arrest comes after other members of Ozy Media’s executive team were charged with defrauding investors out of large sums of cash.
As seen in the New York Times, Carlos Watson, 53, was arrested Thursday morning in midtown Manhattan by FBI officials and later appeared in federal court in Brooklyn by the afternoon. Beyond fraud charges, Watson also faces identity theft charges and has pleaded not guilty to all counts and is now free on a $1 million bond.
According to the court filing, Watson, “engaged in a scheme to defraud Ozy’s potential investors, potential acquirers, lenders and potential lenders,” and baked the numbers on Ozy Media’s various holdings and results Eastern District of New York prosecutors wrote.
Along with Watson, Samir Rao, former Ozy Media CEO, and Suzee Han, Ozy Media’s former chief of staff, both pleaded guilty to fraud charges. The Securities and Exchange Commission then brought charges that the trio defrauded investors out of $50 million.
Much of the fall of Ozy Media can be traced to the fall of 2021 after the Times reported that an Ozy Media staffer pretended to be an executive from YouTube during a business call with Goldman Sachs involving a potential investment venture. The staffer sold a tall tale of YouTube being a strong business ally of Ozy Media and that content produced by Ozy performed well on YouTube’s channels.
According to Watson’s legal team, the arrest came as a shock to their side as Watson was reportedly working with authorities on the matter as recently as this week. If convicted, Carlos Watson could face a range of time of a mandatory minimum sentence of two years to a maximum of 37 years.
Photo: Matthew Eisman / Getty
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