Google CEO testifies in Ozy Media founder’s fraud trial

Google CEO Sundar Pichai said in a New York courtroom on Friday that he had never discussed a possible Ozy Media takeover.

Mr Pichai is the most prominent witness to testify so far in the trial of Carlos Watson, the founder of Ozy who is accused of misrepresenting his company’s financial results and financing and audience statements to investors and lenders from 2018 to 2021.

The government alleged in court filings and during trial that Mr. Watson falsely claimed to a potential investor that Ozy had received a $600 million takeover offer from Google. (Although the indictment omitted the company’s name, witnesses and documents presented at trial made clear that Mr. Watson had referred to the search giant.)

Mr. Pichai said he interviewed Mr. Watson in February 2021 for a full-time role managing Google’s relationships with news publishers. To accept the role, Watson had to step down from Ozy, which Google realized could hurt the digital media startup, another Google executive testified Thursday. As part of the hiring discussions, Google considered investing about $25 million in Ozy “to help with the transition,” Mr. Pichai testified when he briefly took over the position.

But Mr. Pichai made a clear distinction between what Google actually thought and a direct acquisition of Ozy. He never discussed a potential takeover — and never announced the $600 million, he told a jury Friday in the U.S. District Court for the Eastern District of New York.

Shannon Frison, Ozy’s defense attorney, denied the government’s claims that Mr. Watson told an investor about a $600 million takeover bid from Google, calling the allegation “unequivocally untrue,” in a statement issued on Friday.

“He had never had that kind of conversation with Google and he never told anyone,” Ms. Frison said.

Mr Watson has pleaded not guilty to all charges. If convicted, he could face up to 37 years in prison.

Mr. Watson, a former MSNBC anchor, started Ozy in 2013, where he published news articles along with podcasting and television production. Ozy secured commitments from high-profile investors at a time when digital publishers, such as BuzzFeed and Vice, were raising billions of dollars based on largely unsuccessful valuations.

At the heart of the federal criminal trial is a 2021 incident in which Mr. Watson’s deputy misled Goldman Sachs employees during a fundraising call by impersonating a YouTube executive. The revelation of the call led to Ozy’s breakdown.

Defense lawyers for Mr. Watson and Ozy blamed his deputy, Sameer Rao, for the spoofed phone call and for misrepresenting Ozy’s financial statements to potential investors. Ms. Frison said in her opening statement in May that Mr. Rao was “incompetent for the role he was serving.”

Mr. Rao and Susie Hahn, Ozy’s former chief of staff, pleaded guilty last year to fraud charges.

Mr. Watson’s defense continued to point the finger at Mr. Rao during cross-examination this week, pressing prosecution witnesses about Mr. Watson’s personal involvement in the alleged illegal conduct.

“Rao handled all the financial statements, the investor presentations, and was in the background with the numbers,” Ms. Frison said in her opening statement, adding that he “made some serious mistakes that the government now refers to as a conspiracy in some way.” .

Mr. Watson’s lawyers also argued that while the founders of BuzzFeed and Vice engaged in the same behavior as Ozy executives to attract investments, prosecutors went after Mr. Watson because he is black.

Mr. Pichai’s appearance in federal court in Brooklyn followed testimony from Mr. Rao, Ozy’s potential investors and several people involved in the fundraising call.

Allison Berardo, the former Goldman Sachs employee who was on the receiving end of the hoax call, testified on Thursday that she felt “violated” when she realized the person on the other line was not actually Alex Piper, the YouTube executive whom Mr. Trump had accused. Rao was pretending.

“I’ve never experienced anything like this in my life,” Ms Berardo told the jury.

The allegations against Ozzie extend beyond the call to Goldman Sachs employees. Tripti Thakur, who served as Ozy’s CFO for three months in 2019, took the stand on Thursday to describe an email in which Mr. Rao sent an alleged fake contract with the Oprah Winfrey Network to a potential bank lender.

Defense lawyers said Mr. Watson was not included in the 2019 email, doubling down on their position that he should not be punished for his former colleague’s behavior.

The trial is expected to continue until the end of July.