Former Ozy Media CEO Carlos Watson Sentenced to Over 9 Years for Multimillion-Dollar Fraud Scheme

Carlos Watson, the co-founder and former CEO of Ozy Media, has been sentenced to 116 months in prison for his central role in a fraud scheme designed to mislead investors. The sentencing, which took place in Brooklyn federal court, was the result of Watson's conviction this past July on charges including securities fraud conspiracy and aggravated identity theft. According to a statement obtained by the U.S. Attorney's Office, Ozy Media itself received one year of probation.

In no uncertain terms, U.S. Attorney Breon Peace and FBI Assistant Director James E. Dennehy described Watson's actions, spanning from 2018 to 2021, which included fabricating revenue numbers and business relationships as a means to secure investor trust and money. "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," Peace said. His methods were not only brazen but criminal, as he opted to deceive stakeholders eagerly rather than uphold transparency in business practice, as per the U.S. Attorney's Office.

The scheme involved lying about various crucial aspects of Ozy's business operations, such as existing contracts and celebrity partnerships, misleading potential investors about financing rounds, and even impersonation of media company executives to maintain the deceptive veneer of success. This was no small operation; its crumple has caused over $60 million in investor losses. In fact, the level of artifice reached a point where Watson directed employees to forge documents to pass off in due diligence procedures, according to evidence presented in court.

Watson's sentencing also reflects the broader efforts of the Department of Justice to root out and prosecute white-collar crime. Breon Peace's involvement as Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee underscores a committed stance against such financial crimes. “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.  On far too many occasions, Watson chose deceit over candor, grasping for the illusion of business success and personal acclaim at any cost. Today’s sentence should serve as a warning to those who would engage in fraud that justice will be swift and certain,” explained Peace, as noted by the same press release.

The prosecution team, consisting of Assistant United States Attorneys Jonathan Siegel, Gillian Kassner, Dylan A. Stern, and Asset Recovery Section’s Laura Mantell, conducted the government's case.