The founder and CEO of disgraced, leftist media company Ozy has now been arrested after he and other senior executives allegedly defrauded investors of millions of dollars over several years.
On Thursday, the Department of Justice announced that it had indicted Ozy Media and its founder, Carlos Watson, 53, for allegedly engaging in "a years-long multi-million dollar fraud scheme." According to the report, Watson, former Ozy COO Samir Rao, and former Ozy Chief of Staff Suzee Han lied to investors, forged documents, and even impersonated executives of other companies in order to secure millions of dollars to keep their otherwise insolvent media company afloat.
Ozy was first launched in 2013, and as recently as two weeks ago, was pitched as a "hip" media company which offered a digital magazine, television programs, and several podcasts to primarily "nonwhite audiences," Semafor reported. For several years, Ozy also offered an arts and entertainment event in New York City known as Ozy Fest, attracting big-name artists such as Wyclef Jean and Rose McGowen, as well as well-known media and political figures like Katie Couric and Hillary Clinton.
However, despite enthusiastic claims that Ozy had amassed a significant following, by 2018, the company was apparently in poor financial shape. In fact, Ozy was so strapped for investment money that in December 2019, Watson supposedly drew up a fake contract, forged the signature of his company's then-CFO on it, and then submitted it to a bank to secure a loan.
When the CFO learned of the alleged forgery, she immediately resigned, railing in an email that "this . . . is illegal. This is fraud. This is forging someone’s signature with the intent of getting an advance from a publicly traded bank." She later added that "what you see as a measured risk — I see as a felony."
Despite the CFO's scathing email, Watson and Rao continued their allegedly fraudulent behavior. In fact, their tactics seemed only to escalate. In January 2021, Rao began to impersonate a YouTube executive, creating a false email address and using a voice modulating application on his cell phone to convince representatives of Goldman Sachs to invest up to $45 million in Ozy.
Though Watson was allegedly in the room with Rao during the incidents and feeding him lines to control his conversations, Watson later allegedly told Goldman Sachs that Rao had acted of his own accord following a "mental breakdown," the DOJ said. On Tuesday, Rao pled guilty under a pseudonym to fraud and identity theft, partly in connection to the impersonation incident.
The New York Times eventually got wind of Rao's impersonation of the YouTube executive and reported the story in September 2021. Within a few weeks, Ozy appeared to be on the brink of collapse, though Ozy has managed to plod along, thanks in large part to Watson's appearance on the "Today" show just a few days after the NYT report.
Watson even ran afoul of music icons Ozzy and Sharon Osbourne after he claimed that the couple had invested in Ozy. Not only had the Osbournes never invested in Ozy, they had actually sued the company over the name Ozy Fest, which was canceled in 2019 because of "extreme heat" and never held in person again.
"This guy is the biggest shyster I have ever seen in my life," Sharon Osbourne said in 2019. "He’s insane."
U.S. Attorney Breon Peace seems to agree. "As alleged, Carlos Watson is a con man whose business strategy was based on outright deceit and fraud," Peace stated, "he ran Ozy as a criminal organization rather than as a reputable media company."
Watson has been arrested and charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and aggravated identity theft. He faces up to 37 years in federal prison, if convicted.
OZY Media Inc., based in Mountain View, California, has also been indicted for conspiracy to commit securities fraud and conspiracy to commit wire fraud. Its current status and future prospects as a company remain unknown.
Former Ozy Chief of Staff Suzee Han pled guilty to an unknown charge as well, likely on February 14.
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