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Carlos Watson, the founder of the now-defunct digital media company Ozy Media, has been sentenced to 10 years in prison for defrauding investors about the financial health of his company. The sentence, which totals 116 months, was handed down on Monday by a federal court in Brooklyn, New York.
According to a press release from the U.S. Attorney’s Office for the Eastern District of New York, Watson was convicted on charges of conspiracy to commit securities fraud, conspiracy to commit wire fraud, and aggravated identity theft.
Prosecutors revealed that between 2018 and 2021, Watson and his co-conspirators orchestrated a "scheme to defraud investors out of tens of millions of dollars" by making false statements and omitting key details about Ozy Media's financial performance.
These fraudulent representations misled investors and lenders, convincing them to pump substantial funds into the media startup.
“Carlos Watson orchestrated a years-long, audacious scheme to defraud investors and lenders to his company, Ozy Media, out of tens of millions of dollars,” stated U.S. Attorney Breon Peace in the press release. “His incessant and deliberate lies demonstrated not only a brazen disregard for the rule of law, but also a contempt for the values of honesty and fairness that should underlie American entrepreneurship.”
Watson’s legal troubles began to escalate in early 2023 when he was arrested on charges of wire fraud following the guilty plea of a former Ozy Media executive on similar charges.
While the executive’s cooperation with authorities significantly bolstered the prosecution’s case, Watson maintained his innocence throughout the process. He publicly denied any wrongdoing and pushed back on accusations that he was a "con man."
On the social media platform X (formerly Twitter), Watson expressed his frustration with the charges and defended his work at Ozy Media. “I have worked around the clock for 10 years to build this company and devoted my life savings to help get us through rough patches,” he said. “This has been a life’s work, and I am proud of what I, my family, and my team have been able to accomplish.”
Watson acknowledged that mistakes had been made, but he questioned why he was being singled out for punishment. “I’m not saying I haven’t made mistakes – I have,” he admitted. “But it’s fair to ask, why I’ve been singled out? OZY is a real and valuable company that was built through an enormous amount of hard work and sacrifice.”
The scandal surrounding Ozy Media sent shockwaves through the media and tech industries, with many questioning how such a high-profile media brand with well-known investors could collapse so spectacularly.
Ozy Media, founded in 2013, was known for producing videos, TV shows, and podcasts that aimed to offer fresh perspectives on news and culture. The company enjoyed partnerships with major media brands and influential investors.
The exposure of Watson’s fraudulent activity revealed that Ozy had overstated its financial stability and misrepresented its viewership numbers to secure more funding. The company allegedly exaggerated its revenue figures and even went as far as impersonating a YouTube executive during a pitch to raise funds from potential investors.
The case serves as a cautionary tale about the potential dangers of unchecked ambition and dishonesty in the world of startups. While Watson argued that he built Ozy Media from the ground up with hard work and sacrifice, the court ruled that his actions violated the law and deceived investors.
His 10-year sentence underscores the broader consequences for founders and executives who cross the line in their pursuit of business growth and investment.
