(CNN) Carlos Watson, the founder and CEO of the controversial Ozy Media, was arrested this week and charged with fraud, according to federal court records.
Watson was charged in a federal indictment with “involvement in a scheme to defraud OZY’s investors, potential investors, potential buyers, lenders, and would-be lenders.”
According to the indictment, Watson committed the fraud “through material misrepresentations and omissions” about Ozy Media, including the company’s finances, investors, business partners, contracts and potential acquisitions.
An Ozy Media spokesperson did not immediately respond to a request for comment on Thursday morning.
Watson’s attorney, Lanny Breuer, confirmed Watson’s arrest in an emailed statement to CNN.
“I am deeply disappointed by today’s events,” the statement said. “We engaged in good faith and constructive dialogue with the government. Given the ministry’s claims to promote such dialogue, I do not understand the dramatic decision to arrest Carlos today.”
The news was first reported by The Wall Street Journal.
“It is alleged that Carlos Watson is a con artist whose business strategy was based on outright deceit and fraud – he ran Ozy as a criminal organization rather than a reputable media company,” said Breon Peace, the United States Attorney for the Eastern District. . from New York.
The defendant was arrested this morning by the FBI at the Hotel NH Collection at 22 East 38th St. in Manhattan, a police source said. If convicted, Watson faces a mandatory minimum sentence of two years in prison and a maximum sentence of 37 years in prison.
Ozy’s former chief operating officer Samir Rao and chief of staff Suzee Han previously pleaded guilty to charges related to their role in the scheme, the US law firm said.
The allegations come after The New York Times published an exposé in 2021 that pulled back the curtain on some of the alleged deceptive practices Ozy Media engaged in.
The Times article led to additional attention from other news organizations, and the cascade of stories ultimately jeopardized the fledgling digital media outlet.
Semafor reported earlier this month that Ozy Media was trying to make a comeback. Semfaor reported that Watson, who previously worked as a host and commentator at CNBC, CNN and MSNBC, was pitching potential advertisers and investors to support the company.
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