Carlos Watson, the founder of Ozy Media, and the company itself were found guilty of fraud by a Brooklyn federal jury on July 16. The conviction stems from accusations that Watson and Ozy misled investors regarding the startup’s finances and created false deals with prominent figures like Google and Oprah Winfrey.
Watson, a former cable news anchor and investment banker, was convicted of securities fraud conspiracy, wire fraud conspiracy, and identity theft. Both he and Ozy pleaded not guilty. Prosecutors allege that the defendants falsified financial information, inflated audience numbers, fabricated contracts, and exaggerated earnings projections to attract investors.
Ozy Media, launched in 2013, faced a swift downfall in 2021 after reports raised questions about its audience metrics. Additionally, a top executive impersonated a YouTube executive during a call with Goldman Sachs, claiming that the streaming service had agreed to pay for exclusive rights to an Ozy show. Following these revelations, Ozy’s credibility collapsed.
Watson now faces a potential prison sentence of 24 to 29 years, which includes a mandatory two-year term 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,” emphasizing the accountability brought by the verdict.
During the six-week trial, two former deputies of Watson, who pleaded guilty to fraud, testified against him. They disclosed that they collaborated with Watson to conceal Ozy’s crippling debt, low cash reserves, and stagnated growth. Despite Watson’s denial of involvement in the impersonation incident, prosecutors presented chat logs suggesting he coached the executive on how to deceive investors.
Testimonies from key figures like YouTube executive Alex Piper and Google CEO Sundar Pichai contradicted Watson’s claims, affirming they never engaged in any deals with Ozy. While Watson maintained that negative press coverage contributed to Ozy’s failure, his evasiveness during cross-examination regarding inconsistent revenue figures raised further doubts.
Watson spent several days on the witness stand, arguing that the prosecution’s interpretation of Ozy’s financial situation was overly simplistic and failed to capture the complexities of media industry negotiations. However, his assertions were met with skepticism as he refrained from providing a clear breakdown of the company’s annual cash revenue.
