Ozy Media founder Carlos Watson was found guilty Tuesday by a federal jury in Brooklyn of defrauding investors in the operation of the firm that he pitched as a next-generation media company.
Watson was found guilty of fraud and conspiracy charges in New York’s Eastern District circuit after an eight-week trial. He faces up to 37 years in prison.
Ozy Media shut its doors in early 2023 amid a scandal that erupted after the New York Times reported on a scheme arranged by Watson and Samir Rao, Ozy Media’s chief operating officer, to impersonate executives from YouTube and other firms to help the company land investment dollars.
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“The jury found that Watson was a con man who told lie upon lie upon lie to deceive investors into buying stock in his company. Watson invented phony financial figures and caused others to forge fake contracts and impersonate a media executive,” said Breon Peace, U.S. Attorney for the Eastern District. “Ozy Media ultimately collapsed under the weight of Watson’s dishonest schemes and with today’s verdict, Watson himself has been held accountable for his brazen crimes. My office is committed to ensuring integrity in the financial markets and protecting investors, small and large, from fast-talking fraudsters looking to betray their trust and separate them from their money.”
In a joint statement, Watson lawyers Ronald Sullivan and Janine Gilbert and Ozy Media lawyer Shannon Frison said they would appeal the verdict, which came after three days of jury deliberations.
“We are disappointed in the jury’s verdict and plan to appeal immediately,” the statement said.
Last year, Watson was initially charged with “aggravated identity theft” for his role in the impersonation of “multiple media company executives” in communications with Ozy’s lenders and prospective investors in furtherance of the fraud schemes. Federal prosecutors asserted that Watson and others engaged in a “years-long” scheme to mislead investors.
“Between approximately 2018 and 2021, Watson and his co-conspirators, including Rao and Han, orchestrated a scheme to defraud investors in and lenders to Ozy of tens of millions of dollars through fraudulent misrepresentations and omissions about key aspects of Ozy’s business, including Ozy’s financial results, debts, and audience size,” Eastern District prosecutors wrote in the indictment.
With Watson’s conviction, the FBI aims to send a strong message to other startup business leaders to stay above board.
“The conviction of Carlos Watson underscores the profound damage caused by corporate fraud schemes,” said Christie Curtis, FBI Acting Assistant Director in Charge. “Watson’s deceitful actions in defrauding investors of their funds and an attempt to defraud a financial institution of tens of millions of dollars illustrated the vulnerability of investors to false information. The FBI remains committed to bringing to justice those who engage in fraudulent activities, ensuring that the integrity of our financial markets is upheld and that market participants are protected from dishonest practices.”
Among Ozy Media’s financial backers were Emerson Collective, headed by Laurene Powell Jobs, and Milwaukee Bucks owner Marc Lasry.
Watson, an entrepreneur and former analyst with McKinsey & Co. and banker with Goldman Sachs, launched Ozy Media as a digital media, TV and podcast production banner in 2013. He pitched it in Hollywood and media circles as a platform for helping people “discover the new and the next” in everything from politics to pop culture. Ozy Media produced a handful of programs for PBS, OWN and A&E Network but never saw any of its series gain real traction on linear TV. It also produced the Ozy Fest daylong conference in New York’s Central Park that was envisioned as a model for a touring event.
What’s more, even before the executive impersonation scandal broke, Ozy Media raised eyebrows in TV circles by touting its programs, including a talk show hosted by Watson, as having been commissioned by such outlets as Amazon Prime Video and YouTube when in fact the programs were only distributed via Amazon and YouTube’s self-publishing channels.
