Prosecutors allege Watson misled potential investors about everything from their revenue and business projections to the company’s audience numbers and the identities of its investors.
Carlos Watson, the chief executive officer of the embattled digital media company Ozy, was arrested on fraud charges Thursday, according to court documents obtained.
Prosecutors allege Watson misled potential investors about everything from their revenue and business projections to the company’s audience numbers and the identities of its investors, court documents show.
The news was first reported by the Wall Street Journal.
Watson could not immediately be reached. Two phone numbers listed for him had full voicemails and several other numbers were no longer in service.
Watson’s lawyer, Lanny Breuer, said he was “deeply disappointed by the events of today.”
“We were engaged in a good faith and constructive dialogue with the government,” Breuer said. “Given the department’s claims of promoting such dialogue, I do not understand the dramatic decision to arrest Carlos today.”
An Ozy spokesperson did not immediately respond to a request for comment.
Watson, a former MSNBC and CNN anchor, co-founded Ozy in 2013 with Samir Rao (MSNBC).
Like many other digital-first media companies of the time, Ozy was able to raise tens of millions of dollars in funding, positioning itself as an online magazine focused on “the New and the Next.” The company was primarily known for its Ozy Fest events that often drew politicians and celebrities.
The company had continued to look to raise funds when The New York Times published an article in September 2021 detailing a fundraising call with Goldman Sachs that would lead to Watson’s arrest. On the call, Rao, Ozy’s co-founder, allegedly impersonated a YouTube executive.
The company’s board of directors announced Ozy was shutting down in October 2021 — before Watson claimed the startup was “open for business” just days later.