Carlos Watson, the founder of Ozzy Media, has been sentenced to nearly a decade in prison for lying about his once innovative startup to attract investors.
Prosecutors said the former Goldman Sachs banker and former MSNBC host orchestrated a year-long scheme that resulted in “tens of millions of dollars” in losses for investors.
The court was told that Watson and others at Ozzy Media misrepresented the firm’s finances, celebrity relationships and acquisition prospects to attract investors.
Watson continues to deny the allegations and says he plans to appeal the decision.
United States District Judge Eric R. Comity sentenced Watson to 116 months in prison for securities fraud, conspiracy to commit wire fraud and aggravated identity theft.
“Carlos Watson orchestrated a years-long, daring scheme to defraud his company’s investors and creditors,” said Brion Pace, U.S. Attorney for the Eastern District of New York.
“His persistent and willful lying not only shows a brazen disregard for the rule of law but also an affront to the values of honesty and justice”.
Watson will currently remain free on a $3m (£2.3m) bond.
He pleaded not guilty but was found guilty in July after an eight-week trial.
In court, Watson said he was a businessman who believed in what his company was doing and did everything he could to make it a success.
His lawyer had argued that he was betrayed by his deputies who acted on their own accord and hid their wrongdoings from him.
Ozzy Media’s downfall began in 2021 when a New York Times investigation found that one of its executives impersonated a YouTube representative during a call with investment banking firm Goldman Sachs.
Watson blamed the fraud on what he described as his deputy’s mental health issues. He added that no harm was done because Goldman Sachs ultimately did not decide to invest.
In court filings, prosecutors allege that Watson was present during the call and instructed his deputy on what to say, despite previously denying to the media that he was there.
Ozzy Media aims to emulate the early success of digital news media pioneers such as Voice Media and BuzzFeed.
He produced left-leaning podcasts, television series and events, and profiles of rising stars and emerging trends.
In 2020, he was worth $159m (£132m).