BROOKLYN (CN) — On his fourth day on the stand, former Ozy Media executive Samir Rao testified Monday that he falsified business records and impersonated a YouTube executive to try and secure an investment from Goldman Sachs.
Rao said he did so at the direction of Carlos Watson, founder and CEO of the now-defunct Ozy Media. Watson, who appeared in court Monday wearing a navy-blue suit, is facing trial in Brooklyn federal court on accusations he lied about the company’s revenue, profit earnings and audience data to try and induce potential investors to provide funding to the company.
Watson, a Harvard graduate who earned a law degree from Stanford University, faces criminal charges of securities and wire fraud conspiracies and aggravated identity theft for accusations he deceived investors and conspired to impersonate leaders of other media groups in furtherance of the scheme.
Rao, former chief operating officer, and Suzee Han, onetime chief of staff, separately pleaded guilty to charges last year and are now cooperating with the government. The pair were also named alongside Watson in a separate lawsuit filed by the U.S. Securities and Exchange Commission.
During his testimony, Rao detailed his involvement in a scheme to try and secure an investment from Goldman Sachs.
In previous negotiations with the investment company, Watson and Rao told Goldman executives that YouTube was interested in buying the rights to Ozy’s flagship show “The Carlos Watson Show,” in which Watson interviewed politicians and pop culture celebrities including Joe Biden and John Legend. But Rao said this was a lie, and Watson and he came up with a plan to impersonate YouTube executive Alex Piper on a conference call with Goldman Sachs using a voice modification software.
“We decided that I would fake the reference call and pretend to be Alex,” Rao said, recalling an agreement he made with Watson.
But as the call approached, Rao said he felt increasingly worried about impersonating Piper.
“It wasn’t just documents, it wasn’t just emails, I was now going to pretend to be somebody else,” Rao said. “I didn’t feel good that this was going to work.”
In preparation for the call, Rao said he practiced using the software in a test call with Watson.
“The voice that was coming out had kind of an altered quality when a voice was modified or something,” Rao said.
When it came time to join the conference call, Rao said Watson was in the room with him and was trying to guide him through it.
“He was trying to signal me at first. He was mouthing stuff to me that I wasn’t understanding or receiving,” Rao said.
But when that didn’t work, Rao said Watson began to send him text messages that told him what to say.
“I am a big fan of Carlos, Samir and the show,” one text from Watson read.
In other texts, Watson reminded Rao to “use the right pronouns,” which Rao explained was because he kept referring to Ozy Media as “we” instead of “they.”
“You are NOT OZY,” another text from Watson said, which Rao said referred to his misuse of pronouns.
Immediately after the call, Rao said, Watson and he began receiving phone calls from Alex Piper’s office that “made it clear” Goldman Sachs didn’t believe the impersonation.
Rao said he got a call from Piper who seemed “really frustrated and upset,” and was repeatedly asking why he was supposedly on a conference call with Goldman Sachs.
To try and mitigate the consequences, Rao said Watson and he came up with a plan to blame the incident on a “mental break.”
“Carlos was now in the mode of trying to manage the crisis,” Rao said. “He said he needed to call members of the board and say that I had a mental break or mental health episode.”
Rao said he agreed to take sole responsibility for the incident in the eyes of the board because he believed it was the best way to avoid any potential criminal charges at the time. After Watson called multiple members of the board using the “mental break” explanation, Rao said he was placed on a probationary period in which he was still able to work for the company.
“I was on notice — if there was some kind of mistake or episode or some kind of inappropriate behavior — then I would be terminated,” Rao said.
But in September 2021, Rao said he received an email from Ben Smith — the then-media columnist at The New York Times — who said he was writing an article about the Goldman Sachs incident. A few days after the article was published, Ozy Media shut down.
Rao said, after discussing the story with Watson, the pair came up with a series of tactics to mitigate the damage of the incoming article. One of their strategies was for Rao to write a letter claiming he was entirely to blame for the impersonation incident.
According to Rao, he drafted the letter “in a suite with Carlos in New York City as [they] were holed up trying to prepare for the potential article.”
But he never published the letter because he said they learned the article was more broadly about Ozy’s finances and that the impersonation was just an example of the company’s larger deception to investors.
At the end of his direct testimony, Rao reflected on his time at Ozy:
“My ambition, my desire to be successful, my desire to be seen as tough enough or good enough to succeed in this world completely took over my moral compass,” Rao said.
Watson was arrested last year at the Hotel NH Collection in Manhattan. If convicted, he could face up to 37 years in prison.
Trial will resume on Friday after a few days break. When resumed, Rao will take the stand again for cross-examination.
Follow @NikaSchoonover
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