US prosecutors have charged the chief executive of Mozaic Payments, a Nashville-based technology startup, with orchestrating a scheme that allegedly defrauded a private equity firm out of $20m, according to a report by Reuters.
Marcus Cobb, Mozaic’s former CEO, was charged in a federal indictment unsealed in Boston with conspiring to commit wire fraud. The indictment did not identify the investor involved. Mozaic reportedly announced in 2023 that it had raised $20m from Boston-based Volition Capital.
Prosecutors said Mozaic marketed itself as a provider of an application designed to process revenue-sharing transactions for the entertainment and music sectors. The software was promoted as a tool that could split royalties from streaming platforms among artists, labels and distributors. According to the charges, the platform did not function and generated no revenue.
The indictment alleges Cobb and a co-founder misrepresented the company’s financial performance using falsified documents and fabricated customer testimonials during fundraising discussions. The private equity firm invested $20m in September 2023, securing board seats and equity stakes.
Prosecutors said Cobb continued to supply fabricated quarterly results to conceal the company’s deteriorating finances, while investor capital was diverted to fund luxury travel and entertainment.
