NEW YORK– Former talk show host Carlos Watson was sentenced to nearly 10 years in prison in federal court on Monday financial conspiracy case who portrayed his once-popular Ozy Media as the extreme of “fake-it-til-you-make-it” startup culture.
So extreme that another Ozy executive posed as a YouTube executive to hype Ozy to investment bankers — while Watson coached him, prosecutors said.
Watson, 55, and the now-defunct company were found guilty last summer of charges including wire fraud conspiracy. He has denied the allegations and plans to appeal.
“I loved what we built with Ozy,” he said in court Monday, initially addressing supporters in the audience before the judge suggested he turn around. Watson told the judge that he was the target of “selective prosecution” as a black entrepreneur in Silicon Valley, where African-American executives have been disproportionately fewand called the case “a modern-day lynching.”
“I’ve made mistakes. “I’m very sorry that people got hurt, including myself,” he said, but “I don’t think it’s fair.”
Watson, who faced a mandatory minimum sentence of two years in prison and possibly up to 37 years, remains free on a $3 million bond. He must surrender to prison in the coming months.
Prosecutors accused the former cable news commentator and host of playing a leading role in a scheme to defraud Ozy investors and lenders by inflating revenue figures, touting deals and offers that did not exist or had not yet been completed, and other false showing indications of Ozy’s success.
Watson even listened in and texted talking points as his co-founder posed as a YouTube executive to praise Ozy during a phone call with potential investors, prosecutors said.
U.S. District Judge Eric Komitee said Monday that the “amount of dishonesty in this case is extraordinary.”
“Your internal apparatus for separating truth from fiction is seriously miscalibrated,” he told Watson as he sentenced him.
During the trial, the defense blamed others, particularly co-founder Samir Rao and former Ozy chief of staff Suzee Han. She and Rao have pleaded guilty, are awaiting sentencing and have testified against Watson.
Watson portrayed himself as a founder who put everything he had into his company, saying that in recent years he received an average salary of about $51,000 from Ozy, had taken out a triple mortgage on his house and owned a car for 15 years. old drove.
Founded in 2012, Ozy was designed as a hub of news and culture for millennials with a global outlook.
Watson had an impressive resume: degrees from Harvard University and Stanford Law School, a stint on Wall Street, appearances at CNN and MSNBC, and entrepreneurial talent. Ozy Media was his second startup, a decade after he sold a test prep company he founded in his 20s.
Mountain View, California-based Ozy produces TV shows, newsletters, podcasts and a music and ideas festival. Watson has hosted several TV shows, including the Emmy-winning “Black Women OWN the Conversation,” which appeared on the Oprah Winfrey Network.
Ozy has won major advertisers, customers and subsidies. But beneath the outward signs of success was an overextended company that insiders said was struggling – and pretending – to stay afloat after 2017.
The company struggled to make payroll, was late on rent and took expensive advances to pay bills, former chief financial officer Janeen Poutre told jurors. Meanwhile, Ozy gave potential investors far greater sales figures than those it reported to accountants, according to testimony and documents.
On the witness stand in July, Watson said the company’s cash crunch was just a startup norm and that investors knew they were getting unaudited numbers that could change.
One of those investors was his sister Beverly Watson, who stands by her brother and told the court Monday that her biggest loss was “this important platform that elevated people and ideas that were previously unheard.”
However, the judge noted that another investor wrote to the court to say Carlos Watson had abused his trust.
Ozy disintegrated in 2021after a New York Times column exposed the phone call impersonation game and raised questions about the true size of the startup’s audience.