The boss of Ozy Media was arrested in New York after its co-founder pleaded guilty to impersonating a YouTube manager on a fundraising call.

CEO Carlos Watson, 53, Mountain View, Californiawas arrested by Art FBI on Thursday morning at the NH Collection Hotel on 38th Street in Manhattan, a law enforcement source told DailyMail.com.

The Justice Department said the executive planned to “defraud Ozzie’s investors and creditors by making material misrepresentations about Ozzie’s financial and business assets.”

He is expected to be arraigned today in Brooklyn on charges of conspiracy to commit securities fraud and conspiracy to commit wire fraud.

If convicted, Watson faces a “mandatory minimum sentence of two years in prison and a maximum sentence of 37 years in prison.”

He was arrested at the NH Collection Hotel on 38th Street in Manhattan, a law enforcement source told DailyMail.com.

“Carlos Watson is alleged to be a con man whose business strategy was based on outright deception and fraud — he ran Ozy as a criminal organization rather than a reputable media company,” US Attorney Breon Peace said in a statement.

“As alleged in today’s indictment, Watson repeatedly attempted to induce both investors and lenders through a series of deliberate deceptions and fabrications.

“Investment fraud undermines confidence in our country’s markets and investors and makes it difficult for honest businesses to compete.”

Its co-founder Samir Rao pleaded guilty Tuesday in Brooklyn to fraud and identity theft charges after he admitted to using alias between February 2020 and February 2021. Additionally, between 2018 and 2021, Rao made misleading statements to investors to inflate the company’s financial health.

The New York Times revealed that Rao pretended to be Alex Piper, YouTube’s head of unscripted programming, to vouch for Ozzy during a February 2021 call with Goldman Sachs.

Ozzy set up a Zoom meeting with representatives from Goldman Sachs and informed them that Piper would be there to provide statistics on Ozzy’s YouTube success. However, on the day of the meeting, Piper explained by email that he was running late and asked that the meeting be moved by conference call, according to four sources briefed on the meeting, the Times reported.

During one call, Rao – as Piper – bragged that Ozzy had a huge subscriber base, made a lot of money from advertising and was run by an incredible leader, CEO Carlos Watson.

Its co-founder, Sameer Rao, pleaded guilty Tuesday in Brooklyn to fraud and identity theft after he admitted to using an alias between February 2020 and February 2021.

Watson, who claimed that Rao had a mental breakdown when he tried to defraud Goldman Sachs, was found on the phone with him and texting him about what to say

But the voice didn’t sound natural to Goldman Sachs officials during the call, who described it as almost “digitally altered,” the Times reported.

After the call, a Goldman Sachs representative sent a distraught Piper an email separate from the one that came with the meeting, and the YouTube executive explained that he never called.

YouTube launched its own investigation after discovering someone was impersonating one of their executives, which quickly led them to Rao.

Watson was also present during the conversation, according to the DOJ, and texted Rao about what to say, according to an arrest warrant obtained by DailyMail.com.

Watson reached out to Goldman Sachs and also confirmed that Rao was the one who called apologizing for his actions. Watson attributed Rao’s actions to a “mental health crisis” but would not elaborate, the Times reported.

He added that Rao took leave after the incident but returned soon.

Their former chief of staff, Susie Hahn, also pleaded guilty to charges related to the scheme. Khan worked at the company from June 2019 to October 2021.

“The three orchestrated a scheme to defraud Ozzy’s investors and creditors of tens of millions of dollars by falsely misrepresenting and omitting key aspects of Ozzy’s business, including financial results, debts and the size of Ozzy’s audience,” the Justice Department said.

The Justice Department said Watson and his associates “lied” to investors about who was investing in the media company and ordered employees to “create fake contracts with forged signatures to verify due diligence.”

Ozzy tried to scam several investors out of millions of dollars and used a fake email address to do so, in addition to increasing Ozzy’s success

The Justice Department asked a judge not to release Watson after he is arraigned today because he has “the means to escape if he chooses to do so.”

In addition to trying to con a Goldman Sachs executive, the company tried to trick a bank into lending them money for the second season of Ozy’s TV show in December 2019.

To get the bank to close the deal faster, Watson ordered the then-CFO to send a forged contract with a forged signature between the company and the cable network.

The CFO resigned the same day, telling the co-founders: “This is… illegal. This is a scam. It is forging someone’s signature with the intention of getting an advance from a public bank. To be crystal clear, what you consider a reasonable risk, I consider a criminal offence.’

Despite her resignation, the co-founders continued to pressure the bank for months to lend them “a few million”. During the negotiations, the bank asked to speak with a member of the cable network company. Rao, with Watson’s approval, created a fake email account in the name of the real executive and used it to communicate with the bank.

From November 2020 to February 2021, Ozzie tried to get Goldman Sachs to invest up to $45 million by misrepresenting the company’s historical and projected financial results.

“Had the entire $45 million investment gone as planned, $6 million of the $45 million would have been paid to Watson personally,” the Justice Department said.

The Justice Department alleged that Watson was regularly emailed information about Ozzy’s financial situation, which they failed to disclose when subpoenaed, along with the CFO’s resignation letter.

In addition, Watson deleted the text messages that accused him.

The Justice Department is asking that Watson not be released because he has “the means to escape if he chooses to do so.”