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Salon
Salon
Politics
Eugene S. Robinson

Crazy NYC grifter case — with zero Trump

On the same day that a Manhattan criminal jury delivered a guilty verdict in former President Donald Trump’s hush money trial, another big case involving an alleged grifter was just kicking off in Brooklyn. It began with testimony from the star witness, a former Ozy Media executive who had used a voice changer to impersonate a YouTube executive on a phone call with Goldman Sachs. While Manhattan prosecutors grilled Sen. Bob Menendez of New Jersey over a range of corruption charges, Google’s CEO was on the stand in Brooklyn countering claims made by a news startup that were intended to dupe major investors out of millions. 

What the criminal fraud case United States v. Carlos Watson and Ozy Media lacked in title name recognition, the trial made up for with testimony about fake contracts involving Oprah Winfrey, an impersonation of an OWN executive, and a series of exaggerated deals with such celebrities as Jennifer Lopez, former Major League Baseball star Alex Rodriguez, Milwaukee Bucks owner Marc Lasry and Apple heir Laurene Powell Jobs. Did I mention an appearance by Google CEO Sundar Pichai? Well, I just did.

But it wasn’t the high-profile names or the bizarre quality of the Theranos-level “fake it til you make it” scheme allegedly hatched by former Ozy CEO Watson and his co-conspirators that made this trial so wild. It was so wild because, for Watson, it was just the next chapter in his extended grift. 

I worked for Carlos Watson for nearly a decade, and I learned the hard way that with a hardcore grifter, the grift never stops. I was Ozy Media’s employee no. 1, and witnessed Watson’s antics up close, constant and continual, both large and small. Here’s the craziest and smallest one, which I still find weird to this day: I never saw Carlos stand on line for anything. We flew together on a couple of business trips, and while I stood there bemoaning the length of the security line, he would just walk to the front. He didn’t have Clear membership or even TSA PreCheck. He just had unlimited gall. I admired it, but it was a morbid admiration. And ultimately that gall led to his downfall.

That’s why it was so astonishing (as it surely was for Watson himself) that the trial ended with the mythmaker being sent to jail before sentencing. It was a poetic ending for the man who named his company after a 19th-century sonnet about arrogance, hubris and pride laid low. 

Ozy, a reference to Percy Shelley’s poem “Ozymandias,” was a Silicon Valley-based digital media startup founded by Watson and Samir Rao in 2012. Watson, a former Goldman Sachs employee and MSNBC news anchor, was a darling in the startup world, and Ozy was made possible by Silicon Valley’s most powerful investors, many of them Watson’s “friends.” 

I remember telling myself that if Watson accomplished, say, 60 percent of what he promised, we’d be sitting on something absolutely historical. So yeah, I bit. Along with many other suckers.

Within just a few years, Watson built a legend — a triple-threat enterprise that delivered with ahead-of-the-curve news, edgy TV shows and a massive annual festival. But a legend was all Ozy ever was.  

In early 2023, federal prosecutors in the Eastern District of New York charged Watson and Ozy Media with conspiracy to commit securities, wire fraud and aggravated identity theft. Essentially, Watson was accused of conning his “friends” out of tens of millions of dollars by lying, exaggerating and omitting the truth about Ozy’s unimpressive finances and performance. 

The investors and lenders weren’t the only victims of the scheme. Ozy’s employees — top journalists, including the BBC’s Katty Kay, several Wall Street Journal reporters and editors and, of course, me — were also conned by Watson. He sold us on a vision that Ozy could be “the HBO of news” for people of color by people of color, and then he manipulated and abused us, gaslit us and, in the case of his co-conspirators Samir Rao and Suzee Han, both more than a decade his junior, he groomed them into criminals. 

Watson tried everything with me. I remember him putting his hand on my knee in his office, looking deeply into my eyes and saying, “No one loves you, or believes in your talent, like I do.” That might have worked on someone who had some security issues or early-life trauma deals. But I felt like Quentin Tarantino in "Pulp Fiction," when he says that he knows the coffee was great because he bought it. His blandishments were pointless. But now I understand he was just keeping in shape, so to speak.

Especially up against what he was offering, which amounted to long hours, regular flayings and general internal chaos — all of it necessary to keep some of the smartest journalists in the world from sniffing out the fraud. And it worked. 

We had our suspicions about inflated audience numbers. I once asked Rao specifically about the number of viewers of Ozy’s terrible signature talk show, literally called "The Carlos Watson Show." Those numbers seemed crazily high to me, and Rao tried to reassure me with, “Well, that’s what the stats say!” Many other news sites were reporting dubious numbers to be fair. So the fraud was largely invisible to Ozy employees, at least until September 2021, when a New York Times column exposed the first whiff of something hinky: a strange voice on the other end of the line during a Goldman Sachs call.

That voice belonged to Rao, who used digital technology to sound like someone else while assuring the high-powered bankers of a snuggly relationship between YouTube and Ozy — a relationship which didn’t exist. Watson explained it away as his COO suffering from a mental health episode. But come the trial, Rao was no longer willing to lie for Watson. 

Rao, who pleaded guilty to the same charges Watson was facing, took the stand on the very first day. The energy in the room was tense. It was standing room only. Watson’s supporters were fighting for seats, including one woman who angrily elbowed herself between two law school students.

Things were already weird, and they got weirder when a prosecutor asked Rao a routine question: Did he see anyone in the room who he'd committed these crimes with? Before Rao could answer, Watson stood up, prompting gasps from the gallery. (One woman said, “I should have brought snacks.”) 

The eight-week ordeal played out like an implausible courtroom drama, featuring a bombastic defense attorney sporting a bow tie, government accusations that defense exhibits were phony, Watson nearly having his bail revoked for repeatedly smuggling cell phones into court and lying to security officers, and the judge slapping the attorneys with a gag order after Watson publicly accused the prosecutors of racism. (That happened on his new website TooBlackForBusiness.org, formerly Ozy.com.) 

The testimony was compelling. Prospective investors, both stateside and from the Middle East, said they’d been hooked by the flashy names of alleged investors: Oprah, A-Rod, J-Lo. They didn’t know it was all a lie. Executives from both YouTube and OWN said they had no idea their identities had been stolen. In a more horrifying moment, Han testified that Watson tried to convince her to let him monitor her therapy sessions. But the most compelling witness, to almost no one’s surprise, was Carlos Watson himself.

While Rao and Han copped to the scheme, pleading guilty and testifying for the government, Watson denied any wrongdoing. He presented an entirely different definition for the con, and pitched it to the jury in person. In his five days on the stand, Watson brought his trademark suaveness and gift of gab — and why not? It had worked on dozens of celebrities and major investors before.

Attempting to explain away what had happened, Watson regaled the courtroom with "Leave It to Beaver"-style stories of his upbringing. He casually underscored his success, looking toward the jurors each time he dropped names like Oprah or brands like Hulu. “Maybe you’ve heard of them,” he said. As though his jury of peers — whom he likely considered hapless rubes — would surely agree that putting a “personal friend” of Oprah’s in prison was unthinkable.

He did that stuff with me as well, as if mentioning Oprah was likely to impress folks in the actual media. It didn’t work in court either.

Watson even branched out into the financial realm, seeking to redefine the rules of accounting in hopes that the jury would believe that assigning arbitrary sums in the millions to deals with zero monetary value was completely normal. The linchpin of his defense was pretty much: It’s a startup thing, you wouldn’t understand. Frankly, Donald Trump would have appreciated it.

Watson accused prosecutors of changing the evidence and repeatedly blamed a "jealous" competitor (media reporter Ben Smith, then at the New York Times and previously at BuzzFeed) for his company’s failure. Don’t believe any of the media reporting, Watson declared from the stand. Don’t believe any of the government’s witnesses. Believe me. This, too, had worked before. 

There were lies he had told in private before, about fake contracts and fake revenue numbers. And there were lies he had told in public, even feuding with Ozzy and Sharon Osbourne after falsely claiming they were investors. Watson had gotten away with all of it — and even with his COO impersonating a YouTube executive — with a wave of the sorcerer’s hand: It was just a mistake, a misunderstanding, an employee with unfortunate mental health issues. 

But for the first time, Watson, who had successfully conned celebrities and major investors (parading them through the office, dog-and-pony style, while the worker bees were close to nervous breakdowns) met his match in a jury of 12 ordinary citizens. They found him guilty on all three counts of fraud and identity theft. His fatal flaw, in fact, was his charisma. Watson had talked himself into a perjury trap when the government caught him lying under oath about details of the Goldman Sachs call.

Watson has still admitted to nothing, which — like all the other ridiculous B.S. in this story — doesn’t seem shocking to me. But I’m still holding out for some kind of an explanation of what was driving him, or how he thought all of this could possibly end well. Carlos, if you’re reading this, give me a call anytime. 

Courtroom reporting was contributed by Heather Schroering. 

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