Former employees at Ozy Media claim there is no proof that millions of dollars received by the company through the federal Covid relief program in order to protect their paychecks went towards saving jobs and increasing pay.

After numerous complaints about questionable business practices, Ozy was placed under investigation. He applied for two loans via a Paycheck Protection Program (or PPP). according to the Small Business Administration’s website

Ozy received her first loan for $3.75million in April 2020. This was a month ago. after the U.S. government passed A $2 trillion bill to relieve the coronavirus.A $2 million additional loan was granted to the company in February 2021.

The PPP funds were not used by Ozy. Carlos Watson, Ozy Media’s co-founder and CEO, didn’t respond to several emails asking about the use of the money by the company or the person who would decide how the money was used. He did not respond to a question regarding why Ozy had applied for the second loan. It was claimed by the company made $50 million in revenue in 2020It was. It fired several employees, and also reduced the salaries of some staff members earlier in that year.

Ozy said it had closed its doors after several reports challenged the company’s business practices. The New York Times detailed an event from February — the same month Ozy received its second PPP loan — where co-founder and chief operating officer Samir Rao impersonated a YouTube executive on a conference call with Goldman Sachs in hopes of securing a $40 million investment.

On Tuesday, she was interviewed on “The Breakfast Club”, a syndicated radio program. Watson said Tuesday he has asked Rao to step downEven though they claimed that the incident was caused by a “mental health issue“

However it wasn’t uncommonOzy specifically allocated its loan funds for payroll in order to allow media companies to take part in the PPP. Ozy employees working full-time said to CNBC that they didn’t know where the money was going and it didn’t go towards restoring their salary after taking pay cuts.

“No one, to my knowledge,” and I am referring to at most 10 people. A former Ozy employee said that no one was paid any salaries after receiving the PPP loans.

“I had to have followed up with Samir.” [Rao]Four to six times, said one other in regard to reinstating salary. It was disappointing. It was disheartening to see your hard work and sacrifice for this company be taken away. 

CNBC spoke with former Ozy workers who worked in different departments of the company. To avoid reprisal, they spoke under the pretext of anonymity in order to talk about private matters.

Watson told Axios in January 2021 — one month before taking the second PPP loan — that his company was profitable for the first time in 2020 after taking in $50 million in revenue. The New York Times first reported Ozy has inflated its traffic numbersIt has a long history of exaggerating its successes. Watson said earlier this week on CNBC that Ozy over-marketed its products about 20% of all the time.

“That’s mine, I have it.” Watson said Monday

Axios first reported that Ozy laidIn early 2020, the company will lay off approximately 20% of its employees. Ozy also announced that he had implemented pay cuts around 19%. CNBC learned that some employees received even greater cuts. According to two sources, one employee saw his salary cut by 35%.

Watson announced on Monday that Ozy was planning to keep its doors openJust days after he told employees the company would close. LifeLine Legacy Holdings also claimed Monday that it had invested $2 Million in Ozy Media. filed a lawsuit against the companyThe claimant claimed that “fraudulent deceptive, and illegal conduct” was the basis of his complaint.

Fortune reported WednesdayWatson reached out to Ozy employees to ask them to come back.

According to SBA’s website, Ozy has ongoing PPP loans that were originally distributed by Silicon Valley Bank. Each loan is “not fully repaid, or forgiven.” Ozy’s first loan was for “custom computer programming services.” according to the SBA site. Ozy’s second loan is described as “internet broadcasting, publishing, and search portals”.

Ozy said that the majority of loan money would go to payroll. According to Ozy, the money also helped keep 143 workers. February 2021 loan document. Watson claimed in Tuesday’s interview with “The Breakfast Club” that Ozy employed “75-plus” full-time workers before Friday’s closure.

Watson stated in the interview that he had not taken any salary since the outbreak of the pandemic to ensure his employees are more productive.

Representatives of Watson and Ozy declined to comment. Representatives from Silicon Valley Bank declined to answer further questions regarding the loans and referred them to Ozy. National Public Radio’s David Folkenflik tweetedAfter just four days, Watson’s new spokesperson Phil Singer resigned on Wednesday.

Watson has spoken to many media outlets since Ozy told his employees the company would shut down. He did not reply to multiple requests for comments on this article. CNBC also sent Watson an extensive list with questions. Watson did not reply to requests for comment prior publication.

SBA spokesperson did not speak out on Ozy’s loan, but provided details about how these loans are made.

Shannon Giles (a spokesperson for the SBA) told CNBC via email that the PPP was a delegated lending procedure, in which participating lenders serve as agents of the government to approve loans and disburse them. A participating lender submits the PPP loan application to the SBA, which it already approves, for federal guarantee. PPP loan disbursements are not disclosed by the SBA. It is a third party transaction between borrower and lender. Each PPP-participating lender is to implement the program to its borrowers within its Congressionally-granted rules and program guidelines.”

One year ago, Ozy Media hosted its annual Ozy Fest in New York City on Central Park’s Great Lawn. The 2020 loan was approved. However, it was ultimately cancelled. cancelled due to the heat that summer,According to the New York Times, top-selling tickets were sold for this event. at $400.John Legend will perform, Rachael Ray celebrity chef, and Trevor Noah, comedian, will host the festival.

CNBC’s Andrew Ross Sorkin directly asked Watson in 2019The amount the company had paid New York for the privilege.

Watson said, “You say you’re with Andrew Ross Sorkin. It works out.” Watson stated, “One of our greatest appreciations is how the city has embraced it.” In the same interview, Watson also stated that they expected 100,000 attendees to the 2019 event.

A person familiar with the matter said that Ozy had paid at least $2 million to use Central Park’s Great Lawn. A similar sum was spent on advertising the festival by the company. After the event was cancelled, it’s not clear what happened with that amount of money.

Alex Rodriguez, a former baseball star, appeared in an interview with Watson. Watson suggested that festival-goers might be privy at most to some form of “swag,” at the time. Watson answered a question about the “swag bag” for that year, saying it contained “unusual VR.” [virtual reality]Headsets

Rodriguez press reps haven’t responded to CNBC’s inquiries for comment.

Watson was also involved in a legal battle over Ozy Fest, which raised questions about Watson’s company’s business model even after the case was resolved. Ozzy Osbourne, a music legend, and Sharon Osbourne, sued Ozy Fest over its name. They said it was too closely related to Ozzfest. They eventually came to an agreement.

After a yearlong legal battle, Watson then claimed that Ozzy Osbourne and Sharon were his friends. Sharon Osbourne recently told CNBC they have never been friends with Watson or investors in Ozy Media. Watson stated Monday that they had reached an agreement where the Osbournes would receive around 50,000 Ozy shares in settlement. Sharon Osbourne called Watson also a “shyster”.

Watson also denied Monday that Sharon Osbourne was his friend.

“I did not say that she was my friend. What do you know? Now, go ahead and play the tape. Play the tape.  Watson stated Monday that you can now play the tape.

It was revealed that Watson actually described Osbournes friends in the 2019 interview. “Fun fact”: Sharon and Ozzy sued us briefly. After we settled, they decided to become friends. They are now investors in Ozy.

WATCH: Ozy Media CEO Carlos Watson calls the Osbournes “friends” during 2019 interview.