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BROOKLYN (CN) — During closing arguments Thursday, defense attorneys for Ozy Media and former CEO Carlos Watson denied claims by federal prosecutors that Watson led an effort to make flippant misrepresentations about company finances to investors.
Instead, Watson attorney Ronald S. Sullivan argued all blame should be placed on co-founder Samir Rao. “This case was about a crooked cofounder named Samir Rao,” Sullivan said Thursday, “who lied, who undermined and who betrayed Carlos Watson.”
Rao, former chief operating officer, and Suzee Han, onetime chief of staff, each pleaded guilty to charges last year and are now cooperating with the government in the criminal fraud case against Ozy and its CEO. Both were named alongside Watson in a separate lawsuit filed by the U.S. Securities and Exchange Commission.
Watson, a Harvard graduate who earned a law degree from Stanford, faces charges for securities and wire fraud conspiracy and aggravated identity theft.
At the center of the prosecution’s case is a call with investors at Goldman Sachs, which became infamous in media circles after the New York Times reported on it in 2021. it was reported by The New York Times in 2021.
During that call, prosecutors claim Watson conspired with Rao to impersonate YouTube executive Alex Piper. They pointed to testimony from Rao who said that Watson was coaching him during the call.
Watson denies his involvement in any such scheme. He said he tried to get Rao to hang up the call once he realized what was happening.
“He told you on the stand that he walked into a situation that was like a trainwreck," Sullivan told the court, recalling Watson’s testimony. “His sole intent was to try and get that call to end.”
Sullivan also pointed to a confession letter by Rao, in which the COO admitted to impersonating Piper.
“Absurdly, stupidly, and without consulting anyone else, I set up a reference call and tried to pass myself off as the reference,” Rao wrote in the letter shown in court.
During his own testimony, Rao said Watson helped him draft the letter after the pair agreed Rao would take the fall for the Goldman call.
Sullivan, however, argued Rao’s testimony should not be trusted.
After Rao took responsibility for the call with both investors and the Ozy board of directors, Watson did not fire him, Sullivan pointed out. Instead, he said Rao was removed from the board of directors and suspended from Ozy.
If Watson made a mistake, Sullivan said, it was being too trusting of Rao.
“If there is a flaw, it’s that he’s too trusting,” Sullivan said of Watson. “He was maybe too good of a friend to Samir.”
Sullivan also denied prosecutors’ claims that Watson was advertising shares for Ozy’s Series C and D fundraising rounds without authorization from the board of directors.
“Not one board member came in and told you: ‘Oh no, we didn’t have Series D authorization at that time,’” Sullivan told jurors Thursday.
If that were true, he added, prosecutors would have “had a parade of witnesses” testifying as to the lack of board authorization for the funding round.
Jury deliberations in the case begin on Friday.
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