Ozy Media co-founder Carlos Watson found guilty of trying to defraud investors and lenders

Ozy Media co-founder and CEO Carlos Watson was convicted of attempting to defraud investors of “tens of millions” of dollars to keep his business afloat.

Watson, a 54-year-old former TV host, was found guilty on Tuesday in a New York federal court of all three counts he faced: conspiracy to commit securities fraud , conspiracy to commit wire fraud , and aggravated identity theft . He had pleaded not guilty.

He co-founded the media company in 2012.

Watson was arrested in February 2023. Federal prosecutors accused him of falsely inflating his now-defunct company’s success.

Authorities accused Watson — and two other top executives who have pleaded guilty — of orchestrating a scheme to defraud investors and lenders “through material misrepresentations and omissions about” Ozy’s financial success, debts, audience numbers, identities of the company’s investors, among other false claims, the indictment states.

Watson and his associates “assumed the identities of and impersonated actual media company executives to cover up their prior fraudulent misrepresentations,” prosecutors said .

The verdict came after a six-week trial that included testimony from the two executives — Ozy co-founder and COO Samir Rao, and chief of staff Suzee Han — who had pleaded guilty. Watson’s legal team tried to distance the defendant from his deputies.

“This case is about a crooked co-founder Samir Rao who lied, undermined and betrayed Mr Watson,” his lawyer said during closing arguments, according to Bloomberg Law .

Rao told the court that he impersonated a YouTube executive in order to convince Goldman Sachs to go through with their $35m proposed investment. Rao told jurors that Watson had coached him throughout the call.

US Assistant Attorney Gillian Kassner told the court: “Watson knew the company was failing, but he was determined to turn Ozy and himself into the next big thing, and he wasn’t going to let the truth stand in his way.”

Watson faces a minimum sentence of two years behind bars and a maximum of 37, prosecutors said at the time of his indictment.

“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. Watson invented phony financial figures and caused others to forge fake contracts and impersonate a media executive,” stated United States Attorney Breon Peace said after the verdict on Tuesday.

Peace added: “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.”