Carlos Watson, the CEO of digital media company Ozy Media, was arrested Thursday after a former executive at his company pleaded guilty to wire fraud charges.
Watson is charged with conspiring to commit securities fraud and conspiring to commit wire fraud, the Wall Street Journal reported, citing a law enforcement official.
His arrest comes after Samir Rao, another top executive at the company, pleaded guilty earlier this week in Brooklyn federal court to fraud and identity theft charges, under a court-approved John Doe pseudonym, the Journal reported.
Charging documents alleged Watson “engaged in a scheme to defraud OZY’s investors, potential investors, potential acquirors, lenders and potential lenders through material
misrepresentations and omissions.”
Ozy Media and Watson have been under investigation by federal authorities and have faced lawsuits after a bombshell New York Times report published in 2021 outlining how Rao, a co-founder and chief operating officer had impersonated a top YouTube official on a conference call with potential Goldman Sachs investors, talking up Ozy’s success on the platform.
The scandal led several top executives and media personalities at Ozy to leave the company.
Watson has previously denied any knowledge of a scheme to defraud potential investors, chalking up the episode with Rao to a “mental health crisis” he said Rao was going through.