Carlos Watson: Ozy Media Fraud, $96M Order, and Commutation

Carlos Watson is the co-founder and former chief executive of Ozy Media, the digital media startup that collapsed in 2021 after journalists exposed inflated audience numbers and a fraudulent investor call. A federal jury in Brooklyn convicted him in July 2024 of conspiracy to commit securities fraud, conspiracy to commit wire fraud, and aggravated identity theft. He was sentenced to 116 months in prison and ordered to pay roughly $96 million in restitution and forfeiture. Hours before he was to surrender in March 2025, President Donald Trump commuted the prison term and, according to people familiar with the matter, the financial penalties as well.

What the Fraud Actually Was

Ozy Media launched in 2013 and marketed itself as a forward-looking news and entertainment brand. By late 2019 it had raised more than $70 million from investors.¹ Prosecutors later established that from 2018 through 2021, Watson and his co-conspirators systematically lied about the company’s finances. At one point in 2018, Ozy’s cash reserves had dropped to as little as $19,000.²

The revenue lies were not small. Internal statements showed Ozy’s 2020 revenue at about $11 million. Watson’s team told Google it was $42 million and told Goldman Sachs it was $46 million.³ The SEC found that Watson routinely inflated revenue by at least 100 percent when pitching investors.⁴

There were fabricated deals, too. Ozy’s chief operating officer, Samir Rao, created a fake contract with the Oprah Winfrey Network and submitted it to a bank to secure a loan. The former CFO, Tripti Thakur, testified that she resigned after seeing the forged document, telling colleagues it was “fraud” and amounted to “forging someone’s signature with the intent of getting an advance from a publicly traded bank.”³ Watson also told investors that Google chief executive Sundar Pichai had offered to buy Ozy for hundreds of millions of dollars. Pichai later testified under oath that no such conversation ever happened.⁵

Victims included former New York Yankees star Alex Rodriguez and an investment firm founded by Laurene Powell Jobs.⁶ The court eventually put actual investor losses above $60 million.⁷

The Goldman Sachs Impersonation Call

The most notorious episode came in February 2021. Goldman Sachs was weighing an investment of up to $45 million and wanted a due-diligence call with YouTube’s head of unscripted programming, Alex Piper. Rao got on the call, used a voice-altering app, and pretended to be Piper. Watson was in the room and texted Rao in real time, feeding him lines.⁸

The bankers noticed something off. The voice sounded “strange” and possibly digitally altered, and when they reached the real Alex Piper he confirmed he had never spoken with them.⁹ Confronted, Watson blamed Rao alone and claimed his co-founder had suffered a “mental breakdown.”⁸

The story became public months later. On September 26, 2021, The New York Times published an investigation exposing the impersonation and Ozy’s inflated traffic claims. Comscore data cited in the piece put Ozy’s monthly unique visitors below 500,000, well short of the millions the company advertised.¹ Investors and advertisers left within days. Ozy announced on October 1, 2021 that it was shutting down; three days later Watson reversed course, called it his “Lazarus moment,” and said the company was “open for business” again.¹⁰ The revival did not last.

Trial and Conviction

A federal grand jury in the Eastern District of New York indicted Watson and Ozy Media on February 22, 2023.¹¹ Both of his co-conspirators pleaded guilty and cooperated. Rao and former chief of staff Suzee Han each testified against him.¹² Rao had earlier drafted a letter blaming the impersonation on his own mental health struggles; on the stand he recanted and admitted the letter was misleading.¹³

The eight-week trial included testimony from Pichai and evidence of forged contracts, false revenue figures, and the impersonated call.¹⁴ Watson testified in his own defense for five days, denying the charges. His attorney, Harvard Law professor Ronald Sullivan, told the jury the case criminalized “commonplace entrepreneurial puffery” and pinned responsibility on Rao.¹⁵

On July 16, 2024, the jury convicted Watson on all counts. Judge Eric R. Komitee revoked his bail the same day, citing concerns that Watson had perjured himself and posed a flight risk.³

Sentence and $96 Million Order

Judge Komitee sentenced Watson to 116 months in federal prison on December 16, 2024. The judge said the “quantum of dishonesty in this case was exceptional” and that he saw no reason to believe Watson would not “simply repeat the behaviors that led us to this point.”¹⁶

In February 2025, the judge ordered Watson and Ozy Media to pay nearly $37 million in restitution to victims plus a forfeiture judgment of more than $59 million, totaling about $96 million.⁶ Rao was sentenced separately in January 2025 to time served, two years of supervised release, and about $12.3 million in restitution.¹⁷ Han received time served in March 2025.¹⁸

Trump’s Commutation

On March 28, 2025, hours before Watson was to report to the Federal Correctional Institution in Lompoc, California, President Trump commuted his 116-month sentence. Trump also commuted the one-year probation imposed on Ozy Media as a corporate defendant.¹⁹ According to three people familiar with the matter, the commutation also wiped out the $96 million in restitution and forfeiture.²⁰

The action was a commutation, not a pardon. Watson’s convictions stand. The White House did not publicly explain the decision. Criminal justice reform advocates Glenn Martin and Alice Marie Johnson were credited with pressing the case; Martin wrote on social media that Johnson’s “advocacy, compassion, and relentless pursuit of fairness” had made it possible.¹⁹ Prosecutors were not told in advance, and witnesses in the case were reported to be “in shock.”²¹ Watson issued a statement maintaining his innocence and describing the commutation as the president “correcting this grave injustice.”²⁰

SEC Case Dropped

The SEC had filed a parallel civil fraud suit in February 2023 against Ozy, Watson, Rao, and Han.²² On September 18, 2025, the agency filed joint stipulations to dismiss the case against Watson and Ozy with prejudice, and Judge Eric N. Vitaliano signed the dismissal on September 24, 2025. The SEC said the decision was made “in the exercise of its discretion” and did not necessarily reflect its position in other cases.²³ Bloomberg reported the dismissal was part of a broader pattern of the SEC dropping enforcement actions after the change in administration.²⁴

1
NPR. Ozy Shuts Down
2
Reuters. Ozy Media’s Carlos Watson Was Betrayed by Lying Co-Founder, Lawyer Says
3
Courthouse News Service. Jury Finds Ozy Media CEO Carlos Watson Guilty on All Counts
4
SEC. SEC Litigation Release
5
New York Post. Ozy Media’s Carlos Watson Ordered to Pay $96M
6
Bloomberg Law. Ozy Media CEO Hit With $96 Million Restitution Forfeiture Order
7
U.S. Department of Justice. Carlos Watson Sentenced to 116 Months in Prison
8
U.S. Department of Justice. Carlos Watson Convicted of Multi-Million Dollar Fraud
9
The New York Times. Ozy Media Goldman Sachs
10
NBC News. Ozy Media CEO Carlos Watson Claims Company Still Open for Business
11
CourtListener. United States v. Watson
12
Courthouse News Service. Defense Rests in Ozy Media Fraud Trial After Testimony From CEO
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Bloomberg Law. Ozy CEO’s Lawyer Grills Co-Founder Over Posing as YouTube Exec
14
Salon. The Summer’s Big Grifter Trial
15
Fox 8. Ozy Media Went From Buzzy to Belly Up
16
Columbia Journalism Review. Trump Commutes Prison Sentence of Ozy’s Carlos Watson
17
GovInfo. United States v. Samir Rao Sentencing Order
18
Law360. Ex-Ozy Media Employee Avoids Prison After Cooperating
19
CNBC. Trump Commutes Sentences of Ozy Media Founder Carlos Watson and Company
20
The New York Times. Carlos Watson Ozy Media Trump Commutation
21
Columbia Journalism Review. Carlos Watson Ozy Media Trump Commute Sentence
22
SEC. SEC Charges Ozy Media
23
SEC. SEC Litigation Release LR-26403
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Bloomberg. SEC Drops Carlos Watson Fraud Case After Trump Axed Prison Term