Ozy Media CEO Hit With $96 Million Restitution, Forfeiture Order

Ozy Media chief executive Carlos Watson and his company must pay nearly $37 million in restitution for a “brazen and audacious” securities fraud scheme involving a fake call to Goldman Sachs Group Inc. bankers from Watson’s cofounder impersonating a YouTube executive.

Watson was also subjected to a more than $59 million forfeiture judgment to the federal government in a post-trial order filed Sunday by Judge Eric Komitee. A jury found Watson guilty in July 2024 of conspiracy to commit wire fraud and securities fraud and aggravated identity theft. Oz Media was also convicted of the conspiracy counts.

Komitee sentenced Watson to almost 10 years in prison for the scheme, which numbered former New York Yankees star Alex Rodriguez and an investment firm founded by Laurene Powell Jobs among its victims.

Ozy collapsed in 2021 shortly after the New York Times reported on the fake call. Prosecutors said he told one investor that Google CEO Sundar Pichai had offered to buy Ozy for hundreds of millions of dollars. Pichai testified that he never discussed a purchase.

Watson appealed the judgment before the entry of restitution and forfeiture.

Restitution

Watson didn’t dispute the government’s calculations of the victims’ losses but argued the government failed to establish a causal link between the losses and the misrepresentations at issue.

But the record “robustly supports” the finding that the fraud was a necessary factor in causing the victims’ losses, Komitee said for the US District Court for the Eastern District of New York.

Beset with cash-flow problems and needing capital to stay afloat, Watson and the company lied to investors about Ozy’s revenue, profitability, partnerships, and the identity of other investors, Komitee said.

The government presented evidence showing how each listed victim invested because of the misrepresentations, which provided “compelling evidence as to causation-in-fact,” he said.

Watson’s argument that the indictment, not the fraud, was the proximate cause of the investors’ losses fared no better.

Based on the company’s precarious finances, it was “eminently foreseeable” to Watson and the company that victims who relied on their misrepresentations were in danger of losing their entire investment, he said.

It was also reasonably foreseeable to the defendants that their conduct would result in an indictment, he said.

“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 misrepresentations and their victims’ losses,” Komitee said.

Komitee also agreed to order forfeiture in the amount sought by the government, rejecting Watson’s argument that the amount should be reduced by the value of the company’s “direct costs.”

Under the most obvious reading of the governing statute, the “cost” to Watson and Ozy was the fair-market value of what they gave up in the transactions—the value of the stock sold to investors.

That value was zero, given the company’s lack of assets and the absence of evidence that third parties were interested in the company’s content library, the judge said.

Ronald Sullivan Law PLLC, Frison Law Firm PC, and Andrew J. Frisch of New York represent Watson and Ozy Media.

The case is US v. Watson, E.D.N.Y., No. 1:23-cr-00082, 2/16/25.