Ozy Media founder Carlos Watson is guilty of fraud

Carlos Watson and the now-shuttered Ozy Media startup he cofounded were found guilty of fraud by a federal jury on Tuesday, as reported earlier by The New York Times. Over the course of a several-weeks-long trial, the jury heard the government’s claims that Ozy Media misled investors by falsifying financial records, inflating audience numbers, and even making up business deals.

Watson, the former CEO of Ozy Media, cofounded the company alongside Samir Rao in 2013. The company launched an online magazine, newsletter, and an annual conference in New York City, all while striking high-profile partnerships and receiving millions in investments.

But things came to a halt when a 2021 article from New York Times media columnist Ben Smith reported that Rao impersonated a YouTube executive during a call with a Goldman Sachs banker about a potential $40 million investment. Rao pleaded guilty to related charges last year and is awaiting sentencing.

Additionally, prosecutors alleged that Watson lied to a prospective investor by saying that Google offered $600 million to take over the media startup. According to testimony from Google CEO Sundar Pichai, the company only considered investing $25 million as part of a potential plan to hire Watson. During the trial, Watson’s lawyers blamed Rao and Ozy Media’s employees for the fraudulent activity, NYT reports.

“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,” Breon Peace, the US Attorney for the Eastern District of New York, said in a statement. “Watson invented phony financial figures and caused others to forge fake contracts and impersonate a media executive.”

Watson was charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and aggravated identity theft. He faces up to 37 years in prison.