Photo by: Britta Pedersen/picture-alliance/dpa/AP Images
The former CEO of Ozy Media, which came to symbolize “fake-it-’til-you-make-it startup culture,” according to the Associated Press, has been slapped with a 10-year prison sentence.
Carlos Watson, 55, was sentenced Monday after being found guilty last summer of aggravated identity theft and conspiracy to commit securities and wire fraud.
Watson’s conviction can be traced to a New York Times exposé from 2021 that accused the digital media company of exaggerating “its claims about its audience size for years” and even coaching its COO Samir Rao to impersonate a “YouTube executive” to hype Ozy’s worth to Goldman Sachs. The fraud conviction came after a nearly $40 million investment from the investment bank.
AP noted that Watson’s resume included “degrees from Harvard University and Stanford Law School, a stint on Wall Street, on-air gigs at CNN and MSNBC, and entrepreneurial chops. Ozy Media was his second startup, coming a decade after he sold a test-prep company that he had founded while in his 20s.”
Before his sentence, Watson claimed he was the victim of “selective prosecution” as a Black entrepreneur in Silicon Valley.
U.S. District Judge Eric Komitee said, “The quantum of dishonesty in this case is exceptional,” and told Watson: “Your internal apparatus for separating truth from fiction became badly miscalibrated.”
Watson had been free on a $3 million bond, and faced a mandatory minimum sentence of two years in prison and as many as 37 years, according to the AP.
Watson and Rao founded Ozy in 2012 as a news hub for millennials. Based in Mountain View, California, the company “produced TV shows, newsletters, podcasts, and a music-and-ideas festival” for the likes of the Oprah Winfrey Network.
Rao and former Ozy chief of staff Suzee Han both pleaded guilty and testified against Watson. They are awaiting sentencing.
