NEW YORK (AP) — Former talk show host Carlos Watson was sentenced Monday to nearly 10 years in prison in a federal financial conspiracy case that cast his once-buzzy Ozy Media as an extreme of fake-it-'til-you-make-it startup culture.
In one example, another Ozy executive impersonated a YouTube executive to hype Ozy to investment bankers — while Watson coached him, prosecutors said.
Watson, 55, and the now-defunct company were found guilty last summer of charges including wire fraud conspiracy. He has denied the allegations and plans to appeal.
“I loved what we built with Ozy,” he said in court Monday, initially addressing supporters in the audience before the judge suggested he turn around. Watson told the judge he was a target of “selective prosecution” as a Black entrepreneur in Silicon Valley, where African American executives have been disproportionately few, and he called the case “a modern lynching.”
“I made mistakes. I'm very, very sorry that people are hurt, myself included,” he said, but “I don't think it's fair.”
Watson, who faced a mandatory minimum sentence of two years in prison and potentially as much as 37 years, remains free for now on $3 million bond. He is to surrender to prison March 28. Any restitution will be determined after a hearing in February.
U.S. District Judge Eric Komitee said Monday that the “quantum of dishonesty in this case is exceptional.”
“Your internal apparatus for separating truth from fiction became badly miscalibrated,” he told Watson in sentencing him.
Prosecutors accused the former cable news commentator and host of playing a leading role in a scheme to deceive Ozy investors and lenders by inflating revenue numbers, touting deals and offers that were nonexistent or not finalized, and flashing other false indications of Ozy's success.
Watson even listened in and texted talking points while his co-founder posed as a YouTube executive to praise Ozy on a phone call with potential investors, prosecutors said.
“His incessant and deliberate lies demonstrated not only a brazen disregard for the rule of law, but also a contempt for the values of honesty and fairness that should underlie American entrepreneurship,” Brooklyn-based U.S. Attorney Breon Peace said in a statement Monday. His office prosecuted the case.
During the trial, Watson's defense blamed any misrepresentations on others, particularly co-founder Samir Rao and former Ozy chief of staff Suzee Han. She and Rao pleaded guilty, are awaiting sentencing and testified against Watson.
Watson portrayed himself Monday as a founder who put everything he had into his company, saying that he took an average salary of around $51,000 from Ozy in its final years, has triple-mortgaged his home and drives a 15-year-old car.
After court, he questioned why Brooklyn-based federal prosecutors had gone after a California-based company and founder. Prosecutors declined to comment; the indictment alleged that scheming happened in the Brooklyn-based jurisdiction and elsewhere.
“I do think this is an attack on Black excellence,” Watson said after noting that his sentence wasn't far from the 11-year term meted out to Elizabeth Holmes. She's the white former Silicon Valley CEO convicted of duping investors in the Theranos blood-testing device hoax.
There's no parallel between faking blood test results and Ozy's roster of real programs and events, Watson said.
Ozy, founded in 2012, was styled as a hub of news and culture for millennials with a global outlook.
Watson boasted an impressive resume: degrees from Harvard University and Stanford Law School, a stint on Wall Street, on-air gigs at CNN and MSNBC, and entrepreneurial chops. Ozy Media was his second startup, coming a decade after he sold a test-prep company that he had founded while in his 20s.
Mountain View, California-based Ozy produced TV shows, newsletters, podcasts, and a music-and-ideas festival. Watson hosted several of the TV programs, including the Emmy-winning “Black Women OWN the Conversation,” which appeared on the Oprah Winfrey Network.
Ozy snagged big advertisers, clients and grants. But beneath the outward signs of success was an overextended company that struggled — and dissembled — to stay afloat after 2017, according to insiders' testimony.
The company strained to make payroll, ran late on rent and took out pricey cash advances to pay bills, former finance vice president Janeen Poutre told jurors. Meanwhile, Ozy gave prospective investors much bigger revenue numbers than those it reported to accountants, according to testimony and documents.
On the witness stand in July, Watson said the company's cash squeezes were just a startup norm and its investors knew they were getting unaudited numbers that could change.
Only one of those investors spoke at the sentencing — Beverly Watson, who stands by her brother. She told the court Monday that her biggest loss was “this important platform that elevated people and ideas that weren't being heard before.”
Ozy disintegrated in 2021, after a New York Times column disclosed the phone-call impersonation gambit and raised questions about the true size of the startup's audience.
FILE - Carlos Watson leaves Brooklyn federal court after testifying in his own defense in New York, Monday, July 1, 2024. (AP Photo/Stefan Jeremiah, File)
TRENTON, N.J. (AP) — A large number of mysterious drones have been reported flying over New Jersey and across the eastern U.S., sparking speculation and concern over where they came from and why.
New Jersey Gov. Phil Murphy and U.S. Sen. Andy Kim have both gone out on drone hunts, hoping for answers. The FBI, Homeland Security, state police and other agencies are investigating.
Murphy and law enforcement officials have stressed that the drones don’t appear to be a threat to public safety, but many state and municipal lawmakers have nonetheless called for stricter rules about who can fly the unmanned aircraft — and to be allowed to shoot them out of the sky.
Dozens of witnesses have reported seeing drones statewide since mid-November, including near the Picatinny Arsenal, a military research and manufacturing facility, and over President-elect Donald Trump’s golf course in Bedminster.
Murphy, a Democrat, said Monday that equipment supplied by the federal government has yielded little new information. He declined to describe the equipment except to say it was powerful and could even “mitigate” the drones, though he added that’s not currently legal on U.S. soil.
The state tallied 12 sightings Saturday and just one on Sunday.
Murphy urged Congress to give states more authority to deal with the drones.
The growing anxiety among some residents is not lost on the Biden administration, which has faced criticism from Trump for not dealing with the matter more aggressively.
White House national security spokesman John Kirby on Monday said the federal government has yet to identify any public safety or national security risks from reported drone sightings in the northeast, saying officials believe they were lawfully flown drones, planes or even stars.
“There are more than 1 million drones that are lawfully registered with the Federal Aviation Administration here in the United States,” Kirby said. “And there are thousands of commercial, hobbyist and law enforcement drones that are lawfully in the sky on any given day. That is the ecosystem that we are dealing with.”
The federal government has deployed personnel and advanced technology to investigate the reports in New Jersey and other states, and is evaluating each tip reported by citizens, he said. The FBI received more than 5000 tips in recent weeks, he added, with only “about 100” deemed credible enough to require additional investigation.
Authorities say they do not know.
The Department of Homeland Security and FBI said they have no evidence that the aircraft pose “a national security or public safety threat or have a foreign nexus.”
Speculation has nevertheless raged online, with some expressing concerns that the drones could be part of a nefarious plot by foreign agents.
Officials stress that ongoing investigations have found no evidence to support such concerns, but U.S. Rep Chris Smith, a Republican, on Saturday echoed such speculation.
“The elusive maneuvering of these drones suggests a major military power sophistication that begs the question whether they have been deployed to test our defense capabilities — or worse — by violent dictatorships, perhaps maybe Russia, or China, or Iran, or North Korea,” he said.
On Monday, Pentagon spokesperson Maj. Gen. Pat Ryder cast doubt on the idea that the drones are engaged in intelligence gathering, given how loud and bright they are. He said about 1 million drones are registered drones in the U.S. and about 8,000 flying on any given day.
Pentagon spokeswoman Sabrina Singh has said the aircraft are not U.S. military drones.
In Boston, city police arrested two men accused of operating a drone “dangerously close” to Logan Airport on Saturday night.
Authorities said an officer using drone monitoring technology detected the aircraft and the location of the operators. A third man fled police and remains at large.
Authorities said the two men face trespassing charges and could face more charges and fines.
Drones flying around Wright-Patterson Air Force Base near Dayton, Ohio, forced base officials to close its airspace for about four hours late Friday into early Saturday, said Robert Purtiman, a base spokesperson.
It was the first time drones had been spotted at the base, one of the largest in the world, and no sightings have been reported since, Purtiman said Monday. He said the drones had no impact on any facilities on the base.
Trump has said he believes the government knows more than it’s saying.
“Let the public know, and now. Otherwise, shoot them down!!!” he posted on Truth Social. Kim said he’s heard no support for the notion the government is hiding anything. He said a lack of faith in institutions is playing a key part in the saga.
“Nothing that I’m seeing, nothing that I’ve engaged in gives me any impression of that nature. But like, I get it, some people won’t believe me, right? Because that’s the level of distrust that we face," Kim said Monday.
Sen. Richard Blumenthal of Connecticut last week called for the drones to be “shot down."
Rep. Smith urged the Pentagon to authorize the use of force to bring down one or more drones to try to figure out who deployed them.
The objects could be downed over the ocean or in an unpopulated area on land, Smith said Saturday.
“Why can't we bag at least one of these drones and get to the bottom of it?” Smith said.
Monmouth County Sheriff Shaun Golden said members of the public must not try to shoot down drones, as that would violate state and federal laws.
Drone sightings were also reported in New York, where a permit is required. Mayor Eric Adams said the city was investigating and collaborating with New Jersey and federal officials.
The runways at Stewart International Airport — about 60 miles (100 kilometers) north of the city — were shut down for about an hour Friday night because of drone activity, Gov. Kathy Hochul said.
“This has gone too far,” she said in a statement.
The governor called on Congress to strengthen the FAA’s oversight of drones and give more investigative authority to state and local law enforcement.
Associated Press writers John Seewer in Toledo, Ohio; Bruce Schreiner in Shelbyville, Kentucky; and Aamer Madhani in West Palm Beach, Florida, contributed.
FILE - In this image taken from video provided by MartyA45_, several drones appear to be flying over Randolph, N.J., on Wednesday, Dec. 4, 2024. (MartyA45_ /TMX via AP, File)
FILE - This photo provided by Brian Glenn shows what appears to be multiple drones flying over Bernardsville, N.J., on Thursday, Dec. 5, 2024 (Brian Glenn/TMX via AP, File)
