Former Ozy Media CEO Carlos Watson received nearly 10 years behind bars for a multi-million dollar fraud scheme that involved his co-founder impersonating a YouTube executive, a Brooklyn judge ruled Monday.
Watson and Samir Rao founded Ozy in 2013, and the media company produced newsletters, TV shows, podcasts and a festival called Ozy Fest. But Watson committed fraud from 2018 to 2021 to trick investors into keeping the business afloat, a federal jury found in July.
Those investors included former Yankees star Alex Rodriguez, who put in $2.5 million along with radio host Charlemagne Tha God, comedian Hannibal Buress, and “Brooklyn Nine-Nine” actor Terry Crews, who each kicked in $25,000, according to court filings. The overall loss to investors topped $60 million.
Rao, who became a government cooperator, told jurors how he impersonated a YouTube executive during a business call with Goldman Sachs and fine-tuned the details of the ruse with Watson.
“On far too many occasions, Watson chose deceit over candor, grasping for the illusion of business success and personal acclaim at any cost,” U.S. Attorney Breon Peace said Monday.
Watson was convicted of conspiracy to commit securities fraud and wire fraud, along with aggravated identity theft after a contentious eight-week trial that often included flareups between his lawyers and Brooklyn Federal Court Judge Eric Komitee.
Watson and his attorneys have repeatedly contended that he was targeted for “selective prosecution” because he’s Black, and they’ve sought Komitee’s removal from the case over the millions he had invested in funds managed by Viking Global Investors, where he worked as general counsel before becoming a judge.
“I don’t see it as fair,” Watson said Monday. “For many of us, we consider this to be a modern-day lynching.”
Komitee sentenced Watson to nine years and eight months in prison, significantly less than the 17 years requested by prosecutors and the roughly 24 to 29 years recommended by federal sentencing guidelines
He called Watson’s conduct “brazen,” particularly the YouTube exec impersonation and other deceptions, including a “mocked-up” contract with the Oprah Winfrey Network.
“The quantum of dishonesty in this case is exceptional,” he said.
Even so, he said, Watson wasn’t running a completely bogus business so he could steal investors’ cash for himself.
“This was, I fully acknowledge, intended to be a real business,” Komitee said. “I do think that the fact that Mr. Wilson did not use the proceeds to finance his own lavish lifestyle is something significant.”
Watson must surrender to authorities by March 28.