Ozy Media founder Carlos Watson has spoken out to deny defrauding investors in his failed media startup, alleging that the entire federal criminal case against him is racially motivated.
Watson, the charismatic former MSNBC and CNN host, told DailyMail.com last week: ‘Unequivocally, yes, I am innocent. But this fight isn’t just about me; it’s emblematic of a larger issue that impacts people of color and marginalized communities.’
The Emmy-winner was arrested in February after two of Ozy’s top executives pleaded guilty to fraud charges, including former COO Samir Rao, who prosecutors say impersonated a YouTube executive during a pitch to prospective investor Goldman Sachs.
In a statement through a spokesman, Watson, 54, insisted that he is being ‘punished for “entrepreneuring while black”‘ and added that ‘while it’s horrifying to think that white prosecutors would target me, every person of color knows that it happens.’
In a motion asked the court to dismiss the case, Watson’s high-powered defense team has argued that prosecutors racially targeted him, charging him over the same kind of self-promoting bluster that is ubiquitous in world of media startups.
Federal prosecutors vehemently denied those claims in a court filing, saying Watson was ‘charged solely because of his own brazen criminal scheme’ and insisting that ‘race did not factor in any way’ in the charges.
A judge will hear oral arguments on Watson’s motion to dismiss, and a separate motion to suppress evidence he says was illegally seized, at a hearing on Thursday in Brooklyn.
Ozy Media founder Carlos Watson has spoken out to deny defrauding investors in his failed media startup, alleging that the entire federal criminal case against him is racially motivated
A spokesperson for for the US Attorney’s Office in Brooklyn, where the charges were brought, declined to comment on Watson’s allegations.
To bolster their argument that the case should be dismissed on Constitutional grounds, Watson’s attorneys cited their own analysis of prior charges brought by the three prosecutors working on his case.
The filing claimed that 90 percent of defendants they charged were non-white, in contrast with an overall non-white population of 55 percent in the district, which covers Brooklyn, Queens and Long Island.
In response, the prosecutors rejected Watson’s statistical analysis of their cases as factually flawed, but also argued in a court filing that it ‘ignores the well-documented fact that crime rates vary among racial groups.’
‘The argument is just shocking and outrageous on so many levels,’ one of Watson’s attorneys, Ronald S. Sullivan Jr, told DailyMail.com in a recent phone interview.
‘In response to our claim that this disparity with race, particularly African Americans, is unconstitutional, they responded with a shrug of the shoulder and said, “well, black people just commit more crimes,”‘ said Sullivan, a Harvard Law professor who specializes in legal ethics and race theory.
Sullivan argued that any racial disparities in criminal conviction rates are due to racially disparate policies that put some groups under greater police scrutiny, and make them more likely to face charges.
‘All relevant scholarship shows, and even Justice Department data show, that people of different races tend to commit crimes at about the same rate, but some are prosecuted more,’ he said.
Separately, Sullivan wrote in his motion to dismiss that it is a ‘well-known fact that White people commit white-collar crimes with a greater frequency than Black people,’ citing an undergraduate essay as a source.
He explained in an email to DailyMail.com: ‘So few blacks are in business relative to whites, that whites disparately commit white-collar crimes.’
‘On balance, people of all races commit crimes. Outside factors, such as discriminatory policing and prosecuting account for disparate crime rates. Other outside factors account for other disparities,’ he said.
‘What’s different about the government argument is that they make the naked claim that groups commit crimes at different rates without mention of the context,’ added Sullivan.
One of Watson’s attorneys, Ronald S. Sullivan Jr (left), told DailyMail.com that his client was the victim of racially biased prosecutors
Ozy exec Samir Rao (left) allegedly impersonated YouTube executive Alex Piper (right) during a pitch to prospective investor Goldman Sachs. Rao has pleaded guilty in the case
Prosecutors say Watson deceived investors and banks with phony financial results
The indictment unsealed in February accuses Watson and Ozy Media of conspiring to commit securities fraud and wire fraud. Watson was also charged with identity theft for his alleged role in the impersonation of several media executives.
Watson, the son of Jamaican immigrants, was born and raised in Miami. He later graduated from Harvard University and Stanford Law School.
‘I’ve dealt with racism since I was young. I overcame it and got into elite schools based on my talents. I overcame bias in my career journey,’ Watson told DailyMail.com.
After stints at McKinsey & Company and Goldman Sachs, Watson got his start in media as a guest political commentator on cable news, appearing often on CNN and later anchoring an MSNBC show.
Watson founded Ozy in 2012 with financial backing from Laurene Powell Jobs and other investors, billing the progressive digital news site as a place to discover ‘the New and the Next.’
‘Every entrepreneur who is a person of color knows that the odds are stacked against us from the start, whether it’s securing financing for our startups or how we are viewed in the workplace,’ he said.
Ozy’s website described it as a ‘space for fresh perspectives, [which] introduces you to rising stars and breakthrough trends, and offers new takes on everything from news and culture to technology, business, learning and entertainment.’
But the company imploded under a huge debt burden and questions over its fundraising moves. As its expenses mounted, it relied on high-interest loans and began to aggressively seen new infusions of investor cash.
The fatal blow came when the New York Times reported in October 2021 that Watson’s top lieutenant Rao had masqueraded as a YouTube executive in a failed attempt to get Goldman Sachs to inject more cash into the struggling enterprise.
Watson, the son of Jamaican immigrants, was born and raised in Miami. He later graduated from Harvard University and Stanford Law School
US Attorney Breon Peace (above) called Watson ‘a con man whose business strategy was based on outright deceit and fraud’
‘As alleged, Carlos Watson is a con man whose business strategy was based on outright deceit and fraud – he ran Ozy as a criminal organization rather than as a reputable media company,’ US Attorney Breon Peace said in a statement following his arrest.
Although Peace is himself black, Watson’s attorney Sullivan insisted that as the top federal prosecutor overseeing an office of hundreds of assistant prosecutors and professional staff, he might not be aware of racially discriminatory practices occurring on his watch.
‘It’s like saying, “well, because a police chief is black, so there’s no racially discriminatory policing in that particular jurisdiction.” I mean, we know that’s not true,’ he said.
The three assistant US attorneys handling the case, Jonathan Siegel, Gillian Kassner and Dylan A. Stern, appear to be white.
Sullivan in the motion to dismiss also questioned why the case had been brought in Brooklyn at all, when both Watson and Ozy were based in California.
The indictment does name several ‘overt acts’ in the alleged crimes that took place in the Eastern District of New York, but Sullivan argues that prosecutors ignored more blatant cases of fraud among New York-based companies.
In his motion to dismiss, Sullivan also pointed to media reports describing how competing media firms Vice Media and BuzzFeed once wooed investors by pumping up their traffic through dubious means and making wildly optimistic growth projections, among other methods.
‘The data speaks for itself—the prosecutors handling my case have targeted black and brown individuals in 90 percent of their work,’ Watson told DailyMail.com, citing his own analysis of prior cases, which prosecutors disputed.
‘When you put that into context with my own situation, being based nearly 3,000 miles away from Brooklyn where our white competitors operate, you can’t help but raise an eyebrow. Disproportionate scrutiny begs questions about racial motives.’
In their court response to the motion to dismiss, prosecutors slammed Watson’s comparison between himself and executives at Vice and BuzzFeed as spurious.
‘Even taking the defendant’s conclusory accusations against these individuals at face value, none of these individuals allegedly fabricated historical revenue numbers for years, as the defendant is alleged to have done,’ the filing said.
‘None allegedly provided fake contracts in due diligence, none invented fake customer relationships supposedly earning millions of dollars and none lured investors with made-up acquisition offers from high-profile corporations, each of which the defendant is also alleged to have done,’ they added.
A BuzzFeed spokesperson told DailyMail.com: ‘This is a ludicrous, baseless and defamatory attempt to deflect from Carlos Watson’s own legal difficulties. BuzzFeed — a public company that adheres strictly to the securities laws — always has acted with integrity and counts transparency among its core values.’
A representative for Vice did not respond to a request for comment sent on Friday.
In addition to Sullivan, who is director of Harvard’s Criminal Justice Institute, Watson’s defense team includes Duncan Levin, who has represented Harvey Weinstein and Anna Delvey.
Watson told DailyMail.com: ‘While this has been an emotionally draining experience, I’m determined to persevere – not just for my sake but for people of color who deserve the same opportunities as everyone else in this country.
‘The beauty of adversity is that it reveals who you truly are. Every morning, I look in the mirror and remember why I started OZY—to give a voice to the voiceless and bring light to dimly lit corners of the world. That mission is larger than me, larger than these charges, and it fortifies me each day.’
If convicted, Watson faces a maximum sentence of up to 37 years in prison.
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