A jury in federal court in Brooklyn today found Ozy Media founder and CEO Carlos Watson guilty of securities fraud, identify fraud and other charges that carry a penalty of up to 37 years in prison.
Sentencing is in November.
The verdict marks the end of a two-month trial for Watson, who founded the digital news and lifestyle startup in 2012. It seemed to be doing fairly well, a façade that exploded in 2021. An article in the New York Times revealed that Ozy co-founder and chief operating officer Samir Rao had misrepresented himself on a call with Goldman Sachs by pretending to be a YouTube executive, Alex Piper. The idea was to put Ozy in a positive light as it sought an investment from the bank.
The executives lied to Goldman Sachs, saying giant YouTube wanted to buy the rights to The Carlos Watson Show.
Watson was also charged with misrepresenting the company’s finances and audience numbers to backers and investors.
The revelations were followed by a criminal indictment and Watson’s arrest in February of 2023. The site, which had been up and down after the NYT story, shuttered after that.
“We decided that I would fake the reference call and pretend to be Alex,” Rao said on the stand, according to news reports today.
Rao and former chief of staff Suzee Han both pleaded guilty to charges last year and are cooperating with the government. They were named alongside Watson in a separate SEC lawsuit.
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