© Reuters.
By Jack Queen
(Reuters) -Ozy Media and its CEO Carlos Watson have been criminally charged for scheming to defraud traders of tens of thousands and thousands {dollars} by misrepresenting the corporate’s money owed, monetary efficiency and viewers dimension, Brooklyn federal prosecutors mentioned Thursday.
Watson and Ozy Media are charged with securities fraud and wire fraud. Watson, who was arrested Thursday morning and is anticipated to make his first courtroom look Thursday afternoon, can be charged with id theft.
Watson’s lawyer, Lanny Breuer, mentioned in a press release he had engaged in “good religion” dialogue with the federal government and was “deeply disenchanted” together with his shopper’s “dramatic” arrest Thursday.
Legal professionals for Ozy mentioned in a press release that they’d been discussing methods to resolve the matter with out prices as just lately as Wednesday and had been “extraordinarily disenchanted” by the federal government’s choice.
Watson’s arrest comes two days after Samir Rao, a co-founder of his media firm, pleaded responsible to related prices in Brooklyn federal courtroom.
Rao’s lawyer, Ed Swanson, mentioned in a press release that his shopper has accepted full duty and is “deeply remorseful, apologetic to these affected, and dedicated to creating amends for his actions whereas at Ozy Media.”
Prosecutors say Watson and his co-conspirators courted a $45 million funding from an unnamed monetary establishment utilizing inflated numbers about its viewers dimension, income and backing from different traders.
Watson and his co-conspirators are additionally accused of forging a contract and impersonating a cable community govt to safe a financial institution mortgage in 2019.
“As alleged, Carlos Watson is a con man whose enterprise technique was based mostly on outright deceit and fraud – he ran Ozy as a felony group fairly than as a good media firm,” Brooklyn U.S. Lawyer Breon Peace mentioned in a press release.
The alleged scheme concerned a February 2021 ruse the place Rao used a voice modulator to impersonate an govt of a streaming service throughout a name with potential traders, in keeping with the indictment.
Courtroom paperwork don’t determine the lender or streaming service. The New York Occasions reported in September 2021 that Rao impersonated a YouTube govt throughout a fundraising name with Goldman Sachs (NYSE:).
Watson acknowledged the incident on Twitter on the time however denied wrongdoing and chalked Rao’s conduct as much as a psychological well being episode. Goldman didn’t finally make investments, Watson mentioned within the tweet.
Rao, who was initially charged below a pseudonym, pleaded responsible on Tuesday to securities fraud conspiracy, wire fraud conspiracy and id theft.
The U.S. Securities and Alternate Fee individually filed a civil case towards Ozy, Watson and Rao on Thursday.
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