Ozy Media, co-founded by Carlos Watson and Samir Rao in 2013, built a narrative of a millennial-focused, multi-channel media empire. They raised over $70M from luminaries like Laurene Powell Jobs and Marc Lasry. In reality, the founders fabricated financial projections, impersonated executives (notably a fake YouTube official to Goldman Sachs), and inflated deals and partner relationships. Watson and Rao were convicted in 2024 on multiple counts of wire fraud, securities fraud, and identity theft. Watson was sentenced to 116 months (9 yrs 8 mos) in prison in December 2024—but received a presidential commutation in March 2025. Restitution and forfeiture judgments total $96M.
Timeline of Events
| Date |
Event |
| 2013 |
Ozy founded; early investor Laurene Powell Jobs contributes seed funding |
| 2017–2019 |
Raises Series B and C (~$35M+) based on inflated metrics and ROI promises |
| Sept 2021 |
Executive Samir Rao impersonates YouTube executive during Goldman Sachs call; NYT exposé triggers unraveling |
| Mar 2023 |
DOJ files charges; Carlos Watson arrested; Ozy shuts down on March 1 |
| July 2024 |
Carlos Watson, Samir Rao, and others convicted at trial in Brooklyn |
| Dec 16, 2024 |
Watson sentenced to nearly 10 years in prison; ordered to pay $96M in restitution and forfeitures |
| Mar 28, 2025 |
President Trump commutes Watson’s sentence just before it begins |
Fraud Mechanics
- Executive Impersonation: Rao pretended to be a YouTube executive during a fundraising call with Goldman Sachs, with Watson coaching him throughout the call.
- Fabricated Contracts and Deals: Ozy claimed deals with Google, Oprah Winfrey, and other high-profile partners, none of which were verified.
- Inflated Financials: Revenue and audience metrics were exaggerated to woo investors; internal employees testified they couldn’t reconcile real analytics.
- Identity Theft for Fraud: Staff impersonated executives to sway lenders and investors.
Financial Overview
| Metric |
Claimed |
Reality |
| Total raised |
~$70M |
Raised via VC, grants, and high-profile individual backers |
| Fabricated deals |
Google, Oprah, Goldman |
All were either unmaterialized or misrepresented |
| Restitution & forfeiture |
— |
$96M combined |
| Prison sentence |
— |
116 months (sentence later commuted) |
Legal Proceedings
- Convictions: Watson and Ozy were convicted of wire fraud conspiracy, securities fraud, and aggravated identity theft in July 2024. Samir Rao and Suzee Han pleaded guilty earlier and cooperated.
- Sentencing: Watson was sentenced in December 2024 to 116 months in prison; Rao and Han sentencing pending.
- Clemency: Trump commuted Watson’s sentence in March 2025, nullifying the prison time before he could begin. Financial restitution remains.
Impact & Investor Lessons
- Celebrity & brand endorsements aren’t proof of substance; prominence does not equate to legitimacy.
- Deal verification needed: Claimed offers (e.g., Google, Oprah) should be confirmed via counterparties or contracts.
- Executive impersonation red flag: Fabricated voices or emails should trigger a forensic review.
- Aggressive fundraising based on false data harms both institutional and high-net-worth investors.
Key Takeaways
- Validate partner claims independently—e.g., ask for written confirmation from named companies.
- Question overly optimistic investor narratives—due diligence should verify metrics, not boardroom boasts.
- Forensic audit of communications—conference call logs and email headers may reveal impersonation.
- Preparation for swift collapses—investors in buzzy media/tech startups must implement exit strategies.
