Ozy Media founder Carlos Watson arrested on fraud charges

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Carlos Watson, the founder of the troubled digital start-up Ozy Media, was arrested Thursday on federal fraud charges as part of what prosecutors say was a scheme to prop up the financially struggling company.

Federal agents arrested Watson at a Manhattan hotel after two of the company's top executives pleaded guilty this month to fraud charges, including Ozy's then-chief operating officer, Samir Rao, who allegedly impersonated a YouTube executive during a pitch to Goldman Sachs, a potential investor. "being ahead of the curve" and"never [telling] a story that another national or international publication has already covered.

For instance, Watson and others"routinely and purposely presented prospective investors with false financial information that grossly inflated Ozy Media's annual revenue by at least 100%," the SEC said.The SEC said Rao and Ozy's former chief of staff, Suzee Han, have"agreed to resolve the charges against them," as they did separately with U.S. prosecutors.

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.

The SEC's civil complaint, also filed in the U.S. District Court in Brooklyn, accuses Watson and the company of violating anti-fraud provisions of federal securities laws.

 

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