Conviction Details
Ozy Media and its founder, Carlos Watson, were convicted of fraud by a Brooklyn federal jury on Tuesday. The case accused them of deceiving investors about the now-defunct startup’s finances and fabricating deals with Google and Oprah Winfrey. Watson, a former cable news anchor and investment banker, and Ozy were found guilty of securities fraud conspiracy and wire fraud conspiracy. Watson was also convicted of identity theft. Both had pleaded not guilty.
Prosecution’s Case
Federal prosecutors alleged that Watson and his California-based news and entertainment company falsified information regarding Ozy’s finances and audience size. They fabricated contracts and inflated earnings projections to lure investors. Founded in 2013, Ozy collapsed in 2021 following reports that questioned its audience numbers and exposed a top executive impersonating a YouTube executive during a call with Goldman Sachs bankers, claiming the streaming site agreed to pay for exclusive rights to an Ozy show.
Sentencing and Statements
Watson faces approximately 24 to 29 years in prison under recommended federal sentencing guidelines, including a mandatory two years for identity theft. His sentencing is scheduled for November 18. Brooklyn U.S. Attorney Breon Peace stated, “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.”
Defense Arguments
Watson’s lawyer argued that Watson was betrayed by deputies who acted independently and kept him uninformed about their wrongdoing. The six-week trial featured testimony from two former deputies who pleaded guilty to fraud. They testified that they conspired with Watson to conceal Ozy’s crippling debt, minimal cash reserves, and slow growth.
Testimonies and Financial Misrepresentations
YouTube executive Alex Piper and Google CEO Sundar Pichai testified for the government, denying any deals with Ozy or consideration of purchasing it, contrary to Watson’s claims to investors. Prosecutors revealed that Watson falsely assured investors of Ozy’s prosperity even as its cash reserves dwindled to $19,000 in 2018, struggling to cover rent, wages, and basic expenses.
Watson’s Defense Testimony
Watson testified for several days in his defense, arguing that prosecutors misunderstood Ozy’s finances and the nuances of media industry dealmaking. He blamed negative press coverage for Ozy’s collapse. During cross-examination, Watson was evasive about inconsistent revenue figures provided to investors and declined to break down Ozy’s annual revenue in cash terms rather than future potential earnings, stating, “That’s not the way I’ve thought about it before and that’s not the way our investors thought about it.”
