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BROOKLYN (CN) — Ozy Media founder and chief executive Carlos Watson will pay over $96 million in restitution and forfeiture, in addition to his prison sentence, for his involvement in a fraud scheme in which he conspired to impersonate a YouTube executive and repeatedly lied to investors about the now-defunct media company’s finances.
Watson was sentenced to nearly 10 years in prison after a Brooklyn jury convicted him in July 2024 for conspiracy to commit securities and wire fraud, in addition to aggravated identity theft.
U.S. District Judge Eric Komitee ordered Watson and his company on Monday to pay over $36 million in restitution and nearly $60 million in forfeiture.
Komitee quashed Watson’s arguments that prosecutors failed to establish a “causal link” between the victims’ losses as part of the fraud scheme and Watson’s misrepresentations of the company’s finances. The Trump-appointed judge pointed to trial evidence that Watson and his company lied to investors about Ozy’s revenue and profitability to secure additional funding.
Watson also argued that the fraud victims’ injuries were not caused by the company’s misrepresentations, but by the indictment itself. Komittee said there is no evidence to corroborate that claim.
“Given the verdicts, the defendants can hardly claim that the indictment was an unforeseeable event, entirely the work of a third party, that severed the chain of proximate causation between their misrepresentation and their victims’ losses,” Komittee said in his order.
Komitee took $100,000 off the government’s restitution request to account for investments made after Ozy was indicted. That later funding came from Thomas Franco, who provided more than $3 million to Ozy in all, including his January 2023 investment of approximately $100,000 after he was made aware of the charges against Ozy.
Watson founded Ozy Media in 2012 as a digital media startup that produced TV shows, podcasts and newsletters. In its flagship program, “The Carlos Watson Show,” its founder interviewed politicians and celebrities including Joe Biden, Hillary Clinton and John Legend.
The company also prided itself in the annual “Ozy Fest” in Central Park, which featured A-list musicians, comedians and public figures such as RuPaul, writer Malcolm Gladwell and rapper Common.
But Ozy shut down in 2021 after an article in The New York Times reported the company’s co-founder and chief operating officer Samir Rao impersonated a YouTube executive on a call with Goldman Sachs and made flagrant misrepresentations of the company’s finances.
Prosecutors frequently pointed to the infamous call during the nearly two-month trial, claiming it was at Watson’s direction that Rao impersonated the executive.
Rao and Suzee Han, the company’s onetime chief of staff, each pleaded guilty to charges in 2023 and cooperated with the government. The pair were also named alongside Watson in a separate lawsuit filed by the U.S. Securities and Exchange Commission.
In a statement following his restitution hearing, Watson maintained his innocence.
“Ozy was a real company with real programs, real revenues and real corporate governance,” Watson said. “Yet, instead of recognizing Ozy’s value, the government brought this case in Brooklyn — 3,000 miles from where Ozy and I actually operated — pushing a narrative that would be laughable if it weren’t so serious.”
Watson added he plans to appeal his case in the Second Circuit.
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