After meeting his future wife, Krista Kotlarz, in 1991, Watson's relationship with John Straayer deteriorated. It bottomed out in 1992 when Straayer discovered Watson was keeping two sets of books. By his estimate, Watson had embezzled over $300,000 from company accounts for personal use. He sued Watson, and subsequently found out that Watson had hidden his 1987 fraud case. Watson responded with a countersuit, saying that Straayer had been the one embezzling funds. Finally. in 1993, Watson and Straayer agreed to dissolve the partnership in a settlement. However, Watson kept the CyberNET name and relaunched it as a reseller.