Disgraced Ozy Media CEO Carlos Watson Faked $600M Takeover Offer to Lure Investor: Feds

Disgraced Ozy Media founder Carlos Watson was allegedly trying to swindle a potential investor by claiming he had received a $600 million takeover bid for his company, the feds allege in court documents this week.

The shocking accusation was one of many brought against Watson, who was arrested on Thursday and charged with fraud. Prosecutors allege that Watson conspired to swindle millions of dollars from Ozy Media investors in a longstanding scheme.

The feds said Watson pretended to receive a nine-figure offer from a technology company in an attempt to convince an unnamed investor to invest $22.5 million in Ozy Media.

Watson allegedly instructed Ozi’s former COO Sameer Rao to send an unnamed investor an April 2021 presentation showing the tech company has committed to investing $30 million in the media firm. Prosecutors say Watson later contacted the investor himself to advertise a fake $600 million ransom.

Watson allegedly detailed his conversation with the investor in Rao’s messages, according to Bloomberg.

“Told him I would sleep on him,” Watson allegedly said. “I think we’ll come back and say we’re going to say no [Technology Company 1] (at least for now) so the D series is smaller to avoid runaway dilution. Take $40 million, including their $20 million, and maybe some debt. Let’s talk when you can.”

Both Rao and Ozi’s former chief of staff Suzi Khan have already pleaded guilty to fraud. They are expected to be sentenced at the end of this year.

“Carlos Watson is a fraudster whose business strategy was based on outright deceit and fraud – he ran Ozy as a criminal organization, not as a reputable media company,” Brooklyn U.S. Attorney Breon Peace said.

Michael J. Driscoll, deputy director of the FBI’s New York office, said that Watson “repeatedly attempted to seduce both investors and creditors through a series of deliberate deceptions and fabrications.”

Watson pleaded not guilty to the charges and was released from $1 million bail. He faces up to 37 years in prison if his guilt is proven on all counts.

Watson’s lawyer, Lanny Breyer, said he was “deeply disappointed” with the way the federal authorities handled the situation.

“We have had a good-faith and constructive dialogue with the government,” Breyer said, according to Bloomberg. “Given the department’s statements to encourage such dialogue, I do not understand the dramatic decision to arrest Carlos today.”

The arrest was the culmination of a stunning downfall for Watson, a former CNN anchor and MSNBC contributor whose efforts to build a fashion media brand have attracted a number of investors.

Ozy Media exploded after a New York Times report revealed that Rao had posed as a YouTube executive during a phone call offering Goldman Sachs a potential investment. Watson’s company eventually closed after the report caused a massive exodus of advertisers and investors.

With mail wires