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Carlos Watson, Ozy Media Founder, Convicted in Fraud Trial The probe began after a bombshell 2021 New York Times article alleged an Ozy cofounder pretended to be a YouTube executive on a call with Goldman Sachs to secure funds.

By Emily Rella Edited by Melissa Malamut

Key Takeaways

  • Carlos Watson and the company he founded, Ozy Media, were convicted of fraud on Tuesday.
  • Brooklyn U.S. Attorney Breon Peace said Watson is a "con man who told lie upon lie upon lie to deceive investors."
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Carlos Watson, the founder and chief executive of Ozy Media, was convicted of securities fraud and wire fraud conspiracy on Tuesday by a New York federal jury.

Watson is a former investment banker and broadcast news anchor. He was also found guilty of aggravated identity theft.

Per the WSJ, in a statement after the verdict, Brooklyn U.S. Attorney Breon Peace said: "The jury found that Watson was a con man who told lie upon lie upon lie to deceive investors into buying stock in his company."

The probe began after a bombshell 2021 New York Times article that alleged an Ozy cofounder pretended to be a YouTube executive on a call with Goldman Sachs to secure funds.

Original story from February 23, 2023, below:

Scandal-ridden Ozy Media has been in and out of headlines over the past year after allegations the company was involved in a series of fraudulent schemes led to a probing investigation by the U.S. Department of Justice and the Securities and Exchange Commission.

The investigation took a turn when Ozy co-founder Samir Rao pleaded guilty to fraud charges earlier this week, leading to the arrest of co-founder and chief executive Carlos Watson on Thursday afternoon at a hotel in New York City.

Court documents state that Watson "engaged in a scheme to defraud Ozy's investors, potential investors, potential acquirers, lenders, and potential lenders" by lying about Ozy's financial standings, potential earnings and acquisitions.

Related: 'Ignore Your Schedule': The Bad Advice that Ozy Media's Carlos Watson Gave to Entrepreneur

According to the Wall Street Journal, Watson was attempting to lock down "tens of millions of dollars" from investors to pay off the company's debt. He was officially charged with conspiring to commit securities fraud and wire fraud and faces a maximum sentence of 37 years in prison.

The probe into Rao and Watson began after a bombshell New York Times article was released in 2021, which alleged that Rao pretended to be a YouTube executive while on a call with Goldman Sachs in an attempt to secure funds. Watson later blamed Rao's behavior on a "very personal mental health issue" in a letter to employees and called the Times article a "hitjob."

"I am deeply disappointed by the events of today," Watson's attorney, Lanny Breuer, wrote in a statement to CNN. "We were engaged in a good faith and constructive dialogue with the Government. Given the Department's claims of promoting such dialogue, I do not understand the dramatic decision to arrest Carlos today."

Just earlier this month, Watson pitched investors on the rebirth of the media company at the MAGNA Equity Upfronts in Manhattan.

The pending investigation and past allegations were not mentioned during the 30-minute presentation.

Ozy launched in September 2013 under the ownership and guise of Watson and Rao. Ozy produced a series of in-house TV shows, newsletters, and podcasts in partnership with major networks like The History Channel and BBC.

It officially stopped producing new content in October 2021 following the NYT report.

Emily Rella

Entrepreneur Staff

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

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