On Thursday, Carlos Watson, the founder of Ozy Media, a digital start-up that faced financial difficulties, pleaded not guilty to federal fraud charges. According to the New York Post, the government alleges that Watson used a scheme to support his struggling company. Ozy Media incurred significant financial losses and eventually closed due to potentially fraudulent business tactics allegations.
Watson started in journalism, serving as a correspondent and host for numerous news organizations like CNN and MSNBC. Subsequently, he established Ozy Media, a digital media enterprise that creates news and amusement content for worldwide viewership.
Federal agents arrested Watson Thursday at a hotel in Manhattan, following the guilty pleas of two high-ranking company executives on fraud charges earlier this month. Watson’s indictment revealed charges, including securities fraud, wire fraud, and identity theft. The accusations against Watson involve a conspiracy to commit these offenses and participating in the impersonation of several media executives.
The Securities and Exchange Commission charged Watson and the company with defrauding investors of approximately $50 million by making false statements regarding the company’s fundamental financial state, business associations, and capital-raising endeavors.
Ozy presented itself as an advanced online platform catering to “the New and the Next,” but it collapsed due to overwhelming debt and doubts about its fundraising methods. As investigations intensified, revelations emerged that an Ozy representative had posed as a YouTube executive in a fruitless effort to secure investment from Goldman Sachs, further intensifying the company’s scrutiny. In the wake of these developments, Ozy announced its closure.
Lanny Breuer, the attorney representing Watson, expressed his disappointment at the arrest and believed that the ongoing discussions with the government were moving forward in good faith and with a progressive outlook. In case of a conviction, Watson is facing a minimum of two years in prison and a maximum of 37 years, according to the U.S. attorney’s office.
