Ozy Media and CEO Carlos Watson convicted of fraud after staged calls with Goldman Sachs

In a stunning conclusion to a high-profile case, Ozy Media and its CEO, Carlos Watson, have been found guilty of defrauding investors about the financial health of his once-promising premium and digital media startup. The charges included allegations that Watson had coached his co-founder to impersonate a YouTube executive to secure backing from Goldman Sachs.

Ozy Media was founded in 2013 by Carlos Watson, a former MSNBC news anchor and journalist, The startup later carved out a niche in the premium media and entertainment space. The Silicon Valley startup produced a digital magazine, daily newsletter, podcasts, television series, and events.

The guilty verdict arrives three years after Ozy Media ceased operations, despite having received $5.7 million in PPP loans intended to pay employees—a promise that ex-staffers claim was never fulfilled.

According to a report from the Wall Street Journal, Watson was found guilty of all three charges he faced, including fraud conspiracies and aggravated identity theft. The jury also convicted Ozy Media on two counts of conspiracy to commit securities fraud and wire fraud.

“A New York federal jury found Watson, Ozy’s co-founder, guilty of all three counts he faced, including for fraud conspiracies and aggravated identity theft. Jurors also found the company guilty of two counts of conspiring to commit securities fraud and wire fraud,” the Wall Street Journal reported.

Following a six-week trial in Brooklyn federal court, the jury delivered its verdict on Tuesday. Watson, 54, was immediately taken into custody after the judge revoked his bail. Watson and Ozy Media were convicted of conspiracy to commit wire fraud and securities fraud, while Watson alone was found guilty of aggravated identity theft. He faces up to 37 years in prison, although experts believe his sentence will likely be shorter. Sentencing is set for November 18.

Prosecutors accused Watson of further misconduct, including obstruction of justice and perjury, during the trial. They also alleged he produced a documentary advertised in the New York area that could have influenced the jury. Watson’s attorneys expressed disappointment with the verdict and announced plans to appeal immediately, Bloomberg noted.

Ozy Media has been under scrutiny for years. At its peak, the company won an Emmy for a 2019 television show on the Oprah Winfrey Network and an Imagen Award for Best Informational Program. The black-founded startup was notable for its diverse workforce, with over half of its employees being minorities and its leadership team predominantly female.

In its early days, Ozy raised a $5.3 million seed round in December 2013, with backing from Laurene Powell Jobs, who inherited significant stock from her late husband, Apple co-founder Steve Jobs. Other early investors included Louise Rogers and Ron Conway.