Watson, who was scheduled to be arraigned Thursday, was arrested at a Manhattan resort. He may resist 37 years in jail if convicted on the fees, in line with a Justice Division announcement. Watson, Ozy Media and fellow executives have additionally been charged with fraud — involving roughly $50 million in funding funds — by the Securities and Alternate Fee.
Watson based Ozy Media in 2012, however the firm didn’t obtain widespread public consideration till the New York Times published a September 2021 report revealing that Samir Rao, the agency’s co-founder and chief working officer, had allegedly impersonated a tech firm govt to assist land a big funding. Watson downplayed the incident as a “very private psychological well being situation” that had since been resolved, however the firm shortly imploded, regardless of Watson’s declare that it was going to be relaunched. In November 2021, it was introduced that each the Justice Division and the Securities and Alternate Fee have been investigating Ozy Media.
Rao and Suzee Han, who served as Ozy Media’s chief of workers from 2019 to 2021, have each pleaded responsible to the fees in opposition to them.
“As alleged, Carlos Watson is a con man whose enterprise technique was based mostly on outright deceit and fraud — he ran Ozy as a prison group slightly than as a good media firm,” U.S. Legal professional Breon Peace stated in a press release.
The indictment in opposition to Watson and his firm traces the story of Ozy’s rise and fall, noting that the corporate’s assets “started to expire in 2017” because it tried to pivot to costly tv productions and stay occasions.
As the corporate took on rising debt, Watson, together with Rao, Han and others, then allegedly “engaged in a scheme” to defraud lenders and traders by misrepresenting, amongst different issues, “Ozy’s historic and projected monetary outcomes, Ozy’s money owed, Ozy’s viewers numbers, the identities of Ozy’s traders and the sizes of their investments, the existence and timing of funding rounds, the identities of Ozy’s enterprise companions, the existence and phrases of key contracts and purported provides to buy Ozy by high-profile firms,” in line with the indictment.
Specifically, Watson and others allegedly claimed that Ozy had doubled its income to about $12 million between 2016 and 2017, when it truly totaled lower than $7 million. Executives then claimed they’d double income once more, “even after it turned clear that Ozy couldn’t obtain that outcome,” in line with the indictment. At one other level, Watson allegedly claimed that Ozy had earned $50 million in income in 2020 when the corporate truly introduced in solely $11 million.
Ozy Media executives are accused of deceptive funding funds in South Korea and the Center East, of taking investments for funding rounds that had not but been formalized, and of utilizing a cast signature to acquire a mortgage. At one level, Watson and Rao are accused of making a pretend e mail deal with to impersonate a cable tv firm govt in talks with a possible lender.
Watson, Rao, Han and others are additionally alleged to have offered falsified monetary outcomes to a New York-based digital media firm that was contemplating buying Ozy Media in 2019. The sale, which may have netted Ozy some $225 million in worth, didn’t occur.
In response to the indictment, Rao used a “voice alteration app” to impersonate a video firm govt in a 2021 name with a monetary establishment. Through the name, Watson allegedly despatched textual content messages to Rao telling him what to say.
Lanny A. Breuer, an legal professional representing Watson, issued a press release responding to his consumer’s arrest and indictment. “I’m deeply disenchanted,” he stated in an e mail to The Washington Publish. “We have been engaged in a great religion and constructive dialogue with the Authorities. Given the Division’s claims of selling such dialogue, I don’t perceive the dramatic determination to arrest Carlos immediately.”
The Wall Avenue Journal first reported Watson’s arrest.
Aaron Schaffer contributed to this report.
