BROOKLYN (CN) — A federal judge imposed a gag order Tuesday on all parties associated with Ozy Media’s fraud trial in Brooklyn after attorneys for the now-shuttered digital media company released a statement on social media that accused the government of coaching witnesses to lie on the stand.
The statement, released on Ozy Media’s Instagram Friday, responded to prosecutors’ assertion that CEO Carlos Watson falsely claimed to a prospective investor that Ozy received a $600 million purchase offer from Google.
Watson, a Harvard graduate who earned a law degree from Stanford University, is facing criminal charges of securities and wire fraud conspiracies and aggravated identity theft under accusations he deceived investors and conspired to impersonate leaders of other media groups in furtherance of the scheme.
Samir Rao, former chief operating officer, and Suzee Han, onetime chief of staff, each 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.
Google CEO Sundar Pichai said during testimony Friday that while the company considered investing about $25 million in Ozy as part of a full-time job offer to Watson, but that Google never made an offer to buy the start-up as Watson had reportedly claimed.
Shannon Frison, an attorney for Ozy, said in a social media statement Friday that Watson never told anyone Google offered to buy Ozy for $600 million.
“It is unequivocally untrue that Carlos Watson told anyone that Google offered to buy OZY for $600 million. He never had such a conversation with Google and never told any person that he did,” Frison said in the statement, which appears to since been deleted. “This allegation is one of many fabricated stories about OZY’S CEO.”
Frison also accused prosecutors of “coaching” witnesses to lie.
“This testimony shows the extensive coaching of the government’s witnesses to say things that are not true in an effort to falsely include OZY and Mr. Watson in Samir Rao’s crimes,” Frison wrote.
After the statement was brought to the court’s attention this week, Frison filed a letter claiming that her statements do not infringe on the court’s ability to hold a fair trial.
“Denying an allegation made by the government does not constitute a violation of the cited rule by the court,” Frison said. “In fact, failing to deny allegations in a highly public case like this could be seen as an admission, with the potential to actually undermine Mr. Watson and OZY’s right to a fair trial.”
But U.S. District Judge Eric Komitee imposed an order preventing both parties from publicly disseminating or discussing the case with any “public communications media” until the jury renders a verdict.
The order also prevents Watson from causing others, including family members or volunteers, from making statements on his behalf.
Prosecutors also claimed Tuesday Watson snuck personal electronics into the courtroom, pointing to two phones found by security officers at Brooklyn federal court.
Jonathan Siegel, an assistant U.S. attorney, said that Watson told the security officer he didn’t have any phones on him. But when the security officer checked his bag, he found two phones. After his bag was searched and the phones were found, Siegel said Watson claimed they “didn’t work.”
After reviewing an order granting members of the defense team to carry personal electronics into the courtroom, Komitee said that “none of them include Mr. Watson.”
“I don’t understand those two devices to be phones in the traditional sense, you can’t make calls,” Ronald S. Sullivan, an attorney for Watson, said in response.
Sullivan added that the phones Watson had with him were used to provide text messages that may be needed during court that haven’t yet been uploaded to other devices.
“I sincerely hope those texts have been downloaded because all of them, I mean all of them, should have been produced pursuant to a grand jury subpoena,” Siegel said.
Komitee ordered the government and defense attorneys to work out if there is any outstanding evidence that was not produced during discovery and did not immediately rule on the incident.
The trial will take a break for the next week and resume next Wednesday, June 26.
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