Disgraced Ozy Media founder Carlos Watson allegedly tried to trick a potential investor by claiming to have received a $600 million takeover offer for his struggling company, the feds alleged in court documents this week.
The shocking allegation was one of many levied against Watson, who was arrested on Thursday and slapped with an array of fraud charges. Prosecutors allege that Watson conspired to bilk Ozy Media’s investors out of millions of dollars as part of a long-running scheme.
The feds said Watson pretended to have the nine-figure offer in hand from a tech company while attempting to convince an unspecified investor to pour $22.5 million into Ozy Media.
Watson allegedly instructed Ozy’s former chief operating officer, Samir Rao, to send the unnamed investor an April 2021 presentation deck showing the tech company had committed to a $30 million investment in the media firm. Prosecutors say Watson later contacted the investor himself to tout the fake $600 million buyout.
Watson purportedly detailed his conversation with the investor in texts to Rao, Bloomberg reported.
“Told him I would sleep on it,” Watson allegedly said. “I think we go back and say we are going to say no to [Technology Company 1] (at least for now), so a smaller Series D so we avoid rampant dilution. Take in $40M including their $20M — and maybe some debt. Let’s talk when you can.”
Both Rao and Ozy’s former chief of staff, Suzee Han, have already pleaded guilty to fraud charges. They are expected to face sentencing later this year.
“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,” Brooklyn US Attorney Breon Peace said.
Michael J. Driscoll, the assistant director-in-charge of the FBI’s New York field office, said Watson “repeatedly attempted to entice both investors and lenders through a series of deliberate deceptions and fabrications.”
Watson has pleaded not guilty to the charges and is out on $1 million bond. He faces up to 37 years in prison if found guilty on all charges.
Watson’s attorney, Lanny Breuer, said he was “deeply disappointed” in how federal authorities handled the situation.
“We were engaged in a good faith and constructive dialogue with the government,” Breuer said, according to Bloomberg. “Given the department’s claims of promoting such dialogue, I do not understand the dramatic decision to arrest Carlos today.”
The arrest marked the culmination of a stunning downfall for Watson, a former CNN anchor and MSNBC contributor whose effort to build a hip media brand attracted a number of investors.
Ozy Media imploded after a New York Times report revealed that Rao had impersonated a YouTube executive during a phone call while pitching Goldman Sachs on a potential investment. Watson’s company eventually shut down after the report prompted a exodus of advertisers and investors.
With Post wires
[Written in collaboration with other media outlets with information from the following sources]
