CNN
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Carlos Watson, the founder and chief executive of the embattled Ozy Media, was arrested and charged with fraud this week, according to federal court records.

Watson was accused in a federal indictment of having “engaged in a scheme to defraud OZY’s investors, potential investors, potential acquirers, lenders and potential lenders.”

The charges said that Watson committed the fraud “through material misrepresentations and omissions” about Ozy Media, including the company’s finances, investors, business partners, contracts, and potential acquisitions.

A spokesperson for Ozy Media did not immediately respond to a request for comment Thursday morning.

Watson’s attorney, Lanny Breuer, confirmed Watson’s arrest in an emailed statement to CNN.

“I am deeply disappointed by the events of today,” the statement said. “We were engaged in a good faith and constructive dialogue with the Government. Given the Department’s claims of promoting such dialogue, I do not understand the dramatic decision to arrest Carlos today.”

The news was first reported by The Wall Street Journal.

“As alleged, Carlos Watson is a con man whose business strategy was based on outright deceit and fraud – he ran Ozy as a criminal organization rather than as a reputable media company,” stated Breon Peace, the United States Attorney for the Eastern District of New York.

The defendant was arrested by the FBI this morning at the Hotel NH Collection at 22 East 38th St. in Manhattan, a law enforcement source said. If convicted, Watson faces a mandato