The founder of the troubled digital start-up Ozy Media was arrested Thursday on federal fraud charges as part of what prosecutors say was a scheme to prop up...
NEW YORK — The founder of the troubled digital start-up Ozy Media was arrested Thursday on federal fraud charges as part of what prosecutors say was a scheme to prop up the financially struggling company, which hemorrhaged millions of dollars before it shut down amid revelations of possibly deceptive business practices.
The indictment unsealed Thursday in U.S. District Court in Brooklyn accuses Watson of conspiring to commit securities fraud and wire fraud, as well as identity theft for his role in the impersonation of several media executives.
Rao pleaded guilty in federal court this week, while Han did so last week. The guilty pleas and arrest were first reported by The Wall Street Journal. Michael J. Driscoll, the assistant director-in-charge of the FBI’s New York field office said Watson “repeatedly attempted to entice both investors and lenders through a series of deliberate deceptions and fabrications.”
If convicted, Watson faces at least two years in prison, with a maximum of 37 years, the U.S. attorney’s office said. The agency, whose regulatory responsibilities include protecting investors, accused Ozy officials of “routinely and purposely” presenting potential investors with dubious financial information, including falsely claiming that the company’s revenues were at least twice what they actually were.
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