Alphabet CEO Sundar Pichai Testifies in Fraud Trial of Ozy Media Co-Founder Carlos Watson

Brooklyn, New York, June 15, 2024 — In a significant turn of events, Alphabet Inc. Chief Executive Officer Sundar Pichai took the witness stand at the federal fraud trial of Ozy Media Inc. co-founder Carlos Watson, firmly stating that the tech giant never intended to acquire the embattled media startup.

Watson faces charges of defrauding investors of tens of millions of dollars by fabricating claims about Ozy’s business success, including a false assertion that Alphabet’s Google had offered to purchase the company for “hundreds of millions of dollars.” These allegations have rocked the once-prominent media startup, which collapsed following a 2021 New York Times exposé.

The unraveling began when the New York Times reported that Ozy’s Chief Operating Officer, Samir Rao, impersonated a senior executive from Google’s YouTube during a call with Goldman Sachs Group Inc. bankers in February 2021. Rao, who has since pleaded guilty, testified that the impersonation was part of a broader scheme orchestrated by himself and Watson to deceive investors about Ozy’s profitability.

Pichai, addressing the jury in Brooklyn federal court on Friday, emphasized that Google never discussed acquiring Ozy. He did, however, reveal that Google considered hiring Watson to head its news programming, a role that could have involved a $25 million investment in Ozy to facilitate the transition.

“Mr. Watson was a critical part of Ozy Media, and we were considering making an investment in the company to make the transition easier,” Pichai testified. When asked by prosecutor Dylan Stern if Google had ever offered to purchase Ozy Media for $600 million, Pichai’s response was unequivocal: “No.”

Prosecutor Stern, in his opening statement, alleged that Watson used the fictitious Google offer to secure another investor after the Goldman Sachs deal fell through. “When the Goldman deal fell through, Watson found another victim and lured them into investing $20 million into Ozy by telling them that the CEO of Google himself had offered to purchase Ozy for hundreds of millions of dollars,” Stern said. “That was a lie. But Watson did not let the truth stand in his way.”

Despite Watson’s alleged claims of a close relationship with Pichai, the Google CEO testified that they had only spoken twice—once briefly at a conference and once during Watson’s job interview on February 25, 2021, weeks after the Goldman call. Watson did not get the job.

The trial has also featured testimony from Hillel Moerman, one of the Goldman bankers present during the infamous February 2, 2021, call where Rao impersonated YouTube executive Alex Piper. Describing the call as “one of the most disturbing calls I’ve been on in my career,” Moerman recounted how the person on the other end spoke in an unnaturally deep voice. This call, facilitated by a voice-altering app, led Goldman to cancel its planned $35 million investment in Ozy.

Further testimony from another Goldman banker, Allison Berardo, supported Moerman’s account, with both describing their shock and suspicion following the call. “We were both in a state of shock,” Moerman said. “Something was off.”

Jurors also heard from Ozy’s chief of staff, Suzee Han, who has pleaded guilty and is cooperating with prosecutors. Han admitted to lying about Ozy’s financial performance and future prospects, stating, “We, and I mean Carlos, lied about how the company was doing at that time, so the company’s current performance. We lied about how the company was going to do.”

As the trial continues, the testimonies of Pichai, Rao, and Han are painting a damning picture of a scheme designed to inflate Ozy Media’s value and mislead investors, with Watson at its center. The outcome of this high-profile case could have far-reaching implications for media startups and investor relations in the tech industry.