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Tuesday, June 25, 2024 | Back issues
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Ozy Media CEO directed senior management to lie to investors, former exec says

Former chief of staff Suzee Han testified Friday that she repeatedly lied to investors with and at the direction of Ozy Media CEO Carlos Watson.

BROOKLYN (CN) — The former chief of staff at Ozy Media testified Friday that in an effort to secure funding, she repeatedly lied to current and potential investors about the now-shuttered digital media company's finances.

Appearing in court Friday in a black blazer and a white T-shirt, Suzee Han told jurors in Brooklyn federal court that the lies came largely at the direction of CEO Carlos Watson.

Watson faces criminal charges, including for securities and wire fraud conspiracy and aggravated identity theft, over accusations he lied about Ozy’s revenue, profit earnings and audience data to try to induce potential investors to give funding to the company.

Han, the onetime chief of staff, and Samir Rao, former chief operating officer, separately pleaded guilty to charges last year and are now cooperating with the government. The pair were also named alongside Watson in a separate lawsuit filed by the U.S. Securities and Exchange Commission.

“He was the one telling us, meaning me and Samir, what to do and what he wanted to be done,” Han said of Watson on Friday.

When asked why she agreed to continuously lie to investors, Han said Watson and Rao repeatedly told her that that was what companies in their situation had to do.

“I really trusted them during my time at Ozy," Han said. "I trusted them when they said to me, ‘Many people — everyone — does this. We would be dumb not to.'"

“Sitting here today, I know that’s a wrong thing to believe," Han continued. "I had a very misguided sense of right and wrong at the time."

Han said she first met Watson in 2015 while working at a venture capital firm right out of college. Watson was speaking at an event hosted by her company because Ozy was one of their clients.

“I found him to be extremely charismatic and extremely likeable,” Han said. “Carlos was someone who always remembered my name and remembered to ask me how I was doing.”

When Watson asked her to join the company in 2019, Han described Ozy’s financial circumstances as “pretty dire.”

“There were multiple times at Ozy in June in which the company had less than a million dollars of cash available and 7 to 10 million dollars of payables due in the next couple of weeks,” Han said.

She recalled a meeting in which Watson and Rao showed her financial documents revealing that information. She said they asked her to keep it confidential.

“I was surprised to see that, but my more immediate reaction was: What do we do? How do we get through this?” Han said, recalling her reaction to first learning about Ozy’s financial situation.

Han said part of the reason for the financial difficulties might have been “Ozy Fest,” an annual summer festival has which featured A-list musicians, comedians and public figures such as Ru Paul, writer Malcom Gladwell and rapper Common. The 2019 festival was ultimately cancelled because of extreme heat, then-Mayor Bill de Blasio said.

While Han didn’t provide specific information about Ozy Fest’s impact on the company’s finances at the time, she said it had cost the company a lot.  

In 2019, BuzzFeed expressed interest in purchasing Ozy. Watson agreed to open negotiations with the larger digital media company.

Over the course of negotiations, Han said, she worked with Watson and Rao to produce data regarding Ozy’s financial health by lying about revenue and television sales in pitch decks provided to BuzzFeed.

One pitch deck shown in court reported Ozy’s profit in 2019 as negative $2 million — though Han said even that was a inaccurately optimistic.

“It was more than negative $10 million,” she said.

Rao shared a similar account during his witness testimony, pointing to pitch deck drafts shown to BuzzFeed that had conflicting historical and projected revenue numbers.

One draft listed television revenue at $6 million in 2019 — but that number changed to $8 million by the third draft. The same was true for events revenue, which jumped from $11 million to $15 million for the year 2020 when the initial and third drafts were compared.

Han also said she modified information concerning Ozy’s television sales on the pitch decks, including for “Black Women OWN the Conversation,” a collaboration between Ozy Media and the Oprah Winfrey Network.

In the pitch deck, Han said she wrote that the show was renewed for a second season. At the time, it hadn't been.

Follow @NikaSchoonover
Categories / Criminal, Entertainment, Media, Technology

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