Carlos Watson, co-founder of digital media startup Ozy Media, testified Monday in his fraud trial that he did not conspire to trick investors.
Instead, his young media company used strategies to build partnerships, secure advertising revenue and attract investors.
“We really thought we had a chance to create something special that could last for a long time,” Mr Watson told the jury.
Mr. Watson’s testimony is the centerpiece of his defense against allegations that he misrepresented his company’s financial results, fundraising and audience data to investors and lenders from 2018 to 2021. Prosecutors have called a number of witnesses, including potential investors, who testified that Mr Watson had deceived them about the company to secure funding.
Mr. Watson, who has pleaded not guilty to all charges against him, faces up to 37 years in prison if convicted.
Speaking before a jury in federal court in Brooklyn, he denied intentionally misleading anyone.
Mr Watson, who is also a former MSNBC host, emphasized his personal commitment to the media start-up, which he said included financial investments and salary cuts to show he was “all in”.
“It’s a challenge when you’re trying to build something different to gain support,” Mr. Watson said, adding that the challenge is even greater for a black entrepreneur like him.
Mr Watson founded Ozy in 2013 with Samir Rao. The start-up published news articles and newsletters before venturing into podcast and television production. It secured commitments from prominent investors at a time when digital publishers like BuzzFeed and Vice were attracting billions of dollars in investments, most of which didn’t pay off.
The federal criminal case centers on a 2021 incident in which Mr. Rao, Mr. Watson’s deputy, misled Goldman Sachs employees during a fundraising appeal by impersonating a YouTube executive. The disclosure of the call, first reported by The New York Times, triggered Ozy’s breakdown.
Lawyers for Mr. Watson and Ozy have blamed Mr. Rao for the impersonation and misrepresentation of Ozy’s financial information to potential investors. Shannon Frison, a lawyer for Ozy, said in her opening statement in May that Mr. Rao was “incompetent for the role he performed.”
Mr. Watson presented himself Monday as an attentive leader but one who withdrew from many of his company’s day-to-day operations. He “couldn’t go into detail” when it came to broader strategic planning, while Mr. Rao and other employees often handled the startup’s finances and technology, Mr. Watson testified.
Mr. Rao and Suzee Han, a former chief of staff to Ozy, pleaded guilty to fraud charges last year.
Several prosecution witnesses also testified that Mr. Watson misrepresented his company’s financials to secure investments.
The most prominent witness, Sundar Pichai, Google’s chief executive, testified that he never discussed a possible $600 million takeover of Ozy. Prosecutors said Mr. Watson told a potential investor that Mr. Pichai had made that offer.
Mr. Watson is expected to continue his testimony on Tuesday, including cross-examination by prosecutors.
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2024-07-03 04:11:16
www.nytimes.com
