Former Ozy Media founder Carlos Watson was sentenced to nearly 10 years in prison on Dec. 16, following his conviction in a federal financial conspiracy case that exposed the deceptive practices of his once-promising startup, AP reports.
Watson, 55, was found guilty of wire fraud conspiracy after orchestrating a scheme to mislead investors and lenders by inflating Ozy’s revenue figures and fabricating business deals. The case marked the dramatic fall of Ozy Media, a media company that once attracted significant attention and investment.
During the trial, Watson’s co-founder Samir Rao and former Ozy chief of staff Suzee Han both pled guilty and testified against him. One of the most egregious examples of deception occurred when Rao, with Watson’s guidance, impersonated a YouTube executive to mislead potential investors, an incident that was central to the case.
In his defense, Watson portrayed himself as a passionate entrepreneur who made mistakes but did not intentionally deceive investors. He expressed remorse for the harm caused but argued that his prosecution was unfair, labeling it as “selective prosecution” and likening the case to “a modern lynching” of a Black entrepreneur in Silicon Valley. He also contended that Black executives face disproportionate scrutiny and that his prosecution was part of a broader pattern of discrimination, NPR reports.
“I made mistakes. I’m very, very sorry that people are hurt, myself included,” he said, but “I don’t think it’s fair.”
Watson, who took a modest salary of $51,000 in the final years of Ozy, faces a sentence that could range from a minimum of two years to a maximum of 37 years in prison.The judge ruled for a sentence closer to the upper end of the scale, noting the “exceptional quantum of dishonesty” demonstrated throughout the case. U.S. District Judge Eric Komitee emphasized that Watson’s actions reflected a disregard for both the law and the ethical values that underpin entrepreneurship in the U.S.
“Your internal apparatus for separating truth from fiction became badly miscalibrated,” he told Watson in sentencing him.
Watson still maintains his innocence and said he plans to appeal the conviction. He currently remains free on a $3 million bond and is expected to surrender to prison on March 28, 2025. The court will determine any restitution at a hearing scheduled for February.
The fall of Ozy Media has been a cautionary tale of the dangers of “fake-it-til-you-make-it” startup culture, where inflated claims and creative misrepresentation are sometimes seen as part of the high-stakes game of attracting investors and gaining traction. Founded in 2012, Ozy Media aimed to be a cutting-edge media company catering to millennials, with ambitious projects like TV shows, podcasts, and a music-and-ideas festival. But behind the flashy facade, the company struggled financially, facing late payrolls, mounting debt, and a series of false representations.
While Watson’s legal team placed the blame on others, including Rao and Han, for the fraudulent activities, the prosecution described Watson’s actions as deliberate and malicious. “His incessant and deliberate lies demonstrated not only a brazen disregard for the rule of law, but also a contempt for the values of honesty and fairness that should underlie American entrepreneurship,” said Brooklyn-based U.S. Attorney Breon Peace.
