Head of troubled start-up Ozy Media arrested at New York hotel on fraud charges
The chief executive of troubled digital media company Ozy Media was arrested at a New York hotel and charged with fraud, according to court documents.
Carlos Watson was accused in a federal indictment of having “engaged in a scheme to defraud Ozy’s investors, potential investors, potential acquirers, lenders and potential lenders”, reported CNN.
Prosecutors claim that Mr Watson allegedly misled investors about everything from the company’s revenue, business projections, and audience numbers to the identities of other investors.
The complaint states that Mr Watson and other Ozy Media executives started to mislead investors in 2018, claiming that the company had doubled its revenue from 2016 to 2017.
Prosecutors say that in fact, the revenue had barely changed from $6m in 2016 to the following year.
Court papers state that Mr Watson and other executives told investors that the company would be able to reach $22m in revenue in 2018, “even after it became clear that Ozy could not achieve that result.”
“As alleged, Carlos Watson is a con man whose business strategy was based on outright deceit and fraud – he ran Ozy as a criminal organization rather than as a reputable media company,” stated Breon Peace, the United States Attorney for the Eastern District of New York.
Mr Watson, a former host and commentator on channels such as CNBC, CNN and MSNBC, was arrested by FBI agents at Manhattan’s Hotel NH Collection on Thursday morning, sources told CNN.
If convicted he faces a minimum of two years in prison and a maximum sentence of 37 years behind bars.
Mr Watson’s lawyer, Lenny Breuer, told NBC News that he was “deeply disappointed by the events of today.”
“We were engaged in a good faith and constructive dialogue with the government,” Mr Breuer said.
“Given the department’s claims of promoting such dialogue, I do not understand the dramatic decision to arrest Carlos today.”