Ozy Media founder Carlos Watson on Monday was sentenced to nearly 10 years in prison for attempting to defraud investors by lying about the financial health of his now-defunct company.
Breon Peace, United States Attorney for the Eastern District of New York, called Watson’s plan an “audacious scheme” to rip off tens of millions of dollars from his investors.
“His incessant and deliberate lies demonstrated not only a brazen disregard for the rule of law, but also a contempt for the values of honesty and fairness that should underlie American entrepreneurship,” Peace said in a statement on Monday.
He added: “On far too many occasions, Watson chose deceit over candor, grasping for the illusion of business success and personal acclaim at any cost. Today’s sentence should serve as a warning to those who would engage in fraud that justice will be swift and certain.”
Ozy Media collapsed spectacularly in 2021 after the New York Times published an expose that accused the company of inflating its online traffic and video viewership and revealed that COO Samir Rao had impersonated a Google executive on a fundraising call with Goldman Sachs — sparking an FBI investigation.
Rao pleaded guilty last year to fraud charges as did former Ozy chief of staff Suzee Han. They both testified against Watson.
Both Watson, who is a former MSNBC anchor, and his lawyers claimed that any fraudulent activity was the fault of other Ozy employees. Watson testified that he did not intentionally pad the revenue estimates, but presented a typical financial profile for a “scrappy young company.”
Prosecution witnesses, however, said otherwise, and cited Watson’s misleading claims of commitments from major players such as Oprah Winfrey and Live Nation Entertainment.
Watson, the Justice Department reiterated on Monday, went as far “as to direct Ozy employees to create fake contracts” that gave the impression to potential investors that the outlet had more backers than it did.
“On multiple occasions, when faced with questions from lenders or potential investors, Watson and his co-conspirators assumed the identities of and impersonated actual media company executives to cover up their prior fraudulent misrepresentations,” the Justice Department added.
Watson faced up to 37 years in prison. He will spend 116 months in prison for conspiracy to commit securities fraud, conspiracy to commit wire fraud and aggravated identity theft. Further penalties of forfeiture and restitution will be imposed at a later date, Justice Department officials said.
Adam Chitwood contributed to this report.
