Carlos Watson, founder and CEO of Ozy Media, was convicted of securities fraud and wire fraud conspiracy by a New York federal jury on Tuesday.
Watson is a former investment banker and news anchor. He was also found guilty of aggravated identity theft.
According to WSJin a statement after the verdict, Brooklyn US Attorney Breon Peace said: “The jury found that Watson was a fraud who told lies upon lies upon lies to trick investors into buying stock in his company.”
The investigation began after a bomb in 2021 New York Times article that claimed an Ozy co-founder pretended to be a YouTube executive in a call to Goldman Sachs to secure funding.
Original story from February 23, 2023, below:
Scandal-ridden Ozy Media has been in and out of the headlines over the past year after allegations that the company was involved in a series of fraudulent schemes led to an investigative probe by the US Department of Justice and the Securities and Exchange Commission.
The investigation took a turn when Ozy co-founder Samir Rao pleaded guilty to fraud charges earlier this week, leading to co-founder and CEO Carlos Watson's arrest Thursday afternoon at a New York City hotel.
Court documents state that Watson “engaged in a scheme to defraud Ozy's investors, potential investors, potential buyers, lenders and prospective lenders” by lying about Ozy's financial condition, earnings and potential acquisitions.
Connected: 'Ignore your schedule': The bad advice Ozy Media's Carlos Watson gave entrepreneurs
According to Wall Street Journal, Watson was trying to lock in “tens of millions of dollars” from investors to pay off the company's debt. He was formally charged with conspiracy to commit securities fraud and wire fraud and faces a maximum sentence of 37 years in prison.
The investigation into Rao and Watson began after a bomb New York Times article was published in 2021 that claimed Rao pretended to be a YouTube executive while on a call with Goldman Sachs in an attempt to secure funding. Watson later blamed Rao's behavior on a “very personal mental health issue” in a letter to employees and called Times article a “hitjob”.
Heartbroken by the ridiculous work of the NYTimes. But we are strong and undaunted. Building something new, fresh and worthy is not for the faint of heart. Here's what I sent to our team. pic.twitter.com/qcH4m9zqM2
– Carlos Watson (@carloswatson) September 27, 2021
“I am deeply disappointed by today's events,” Watson's attorney, Lanny Breuer, wrote in a statement. for CNN. “We were engaged in a good 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.”
Just earlier this month, Watson established investors on the rebirth of the media company at the MAGNA Equity Upfronts in Manhattan.
The pending investigation and past claims were not mentioned during the 30-minute presentation.
Ozy launched in September 2013 under the ownership and guise of Watson and Rao. Ozy produced a series of in-house TV shows, newspapers and podcasts in partnership with major networks such as The History Channel and the BBC.
It officially stopped producing new content in October 2021 after the NYT report.