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Dec. 19, 2024 - The Megyn Kelly Show
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Credit Card Rewards Debate 00:05:30
Welcome to the Megan Kelly Show, live on Sirius XM channel 111 every weekday at least.
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Let me take you back to episode 103 back in May of 2021 when I interviewed Ozzy, that's OZY media founder Carlos Watson.
All right, we're going to go back actually, let's go back even further in time.
I had no idea who Carlos Watson was back in 2018 or so.
I had left NBC.
I was still in my sitting on the couch figuring things out stage.
And he had a booker reach out to me and asked me whether I wanted to go on his show.
And I never heard of his show.
Like, what's his show?
It's on YouTube.
Oh, it's exploding.
It's big.
You know, you should go on.
So I did what I always do in these situations, and I had Abby, my assistant, look into whether this is a real person with a real show and is this something I should consider.
And this is a montage of people he's had on his shows over the years, but this is a sampling that represents what we found when we started looking into who is Carlos Watson and who does he typically interview?
Let's play SOT 50.
Hey, Matthew.
Carlos, how are you?
I'm good, man.
Trying to get my eight seconds on the bowl like everybody is.
Hey, Scarlett, how are you?
Hey, how's it going?
Welcome to the Carlos Watson Show.
Thank you.
Thank you for joining me.
You bet.
Bill Gates.
Hey, Matt.
Matt Damon.
Hey, Carlos, how are you?
Now, you know, with a terrible situation with COVID, I'm at home yelling at the screen like my grandfather used to yell at the professional wrestlers.
Okay.
So, you know, Bill Gates, big name, tough guest to book.
There are a lot of big names in there.
And we were told by Carlos's producers what the YouTube traffic was, what the numbers were.
And, you know, you sort of just want to make sure that this is up to your level, right?
You don't want to go on a show with four viewers.
So I said yes.
And I did go on Carlos's show a couple of times.
Here is one example, SOP 51.
Tell me why you started this podcast.
I started it because I wanted to be able to talk about the news in an unbridled way.
I feel like more and more we're telling people they have to be quiet or they have to use certain words or not use certain words or don't touch that subject.
Or if you touch it, you have to talk about it in this way.
And I don't like it.
I don't like cancel culture and I don't like false parameters being put around speech.
I'm almost a First Amendment absolutist and I'm worried about what's happening to the country along these lines.
So I think it's worth fighting for.
And I wanted a forum that I would control so that I would not be cancelable.
Right on.
Still feel that way.
So Carlos let me promote my podcast that you're listening to right now in its infancy on his show.
And we became friendly.
I never saw him socially, but he had me on a few times.
And then eventually I had him on my baby podcast, as I pointed out.
And it was kind of interesting.
I mean, I remember what I was interested in getting Carlos' bio.
And it was tough.
I wasn't really able to.
This was still in our audio only days.
I was still in my children's playroom.
We've grown since then.
And he came on and he was a bit inscrutable, but I tried.
Listen.
I want to learn how you're thinking, how you came to that, what you would do with that.
Would you ever consider something else?
Like who moves you?
And you're always going to end up being surprised, right?
Like, you know, and if you, if you stay in it and you're just with the person, they're going to share something that reminds you that most of us are contradictions, right?
Dr. King used to, he loved that quote.
The Fraudulent Conference Call 00:15:01
There was a famous quote that used to say, there's enough stuff in me to make both a gentleman and a rogue, right?
And I think very few of us are only one thing or the other.
Oh, he was telling me something there.
And I really should have listened.
Okay.
So that's where we were as of 2021.
Then Carlos was running these things called Ozzy Fests.
And it was like, you know, a big gathering of muckety mucks where you'd get together and have onstage conversations.
And there'd be all these well-known people out there.
And I guess potentially networking opportunities if you're a networker, which I infamously am not.
I'm very bad at networking.
I'm usually like, I want to go home and be alone.
But anyway, he really, really wanted me to go down to, where was it, Abby?
What city?
It was in Florida?
No, I think it was, wasn't it like New Orleans?
I think it was New Orleans.
Okay.
Anyway, he wanted me to go down to the Southeast and appear at Ozzy Fest with him.
And he had his right-hand man, Samir, call Abby, and he dealt with Abby a million times saying, please, please, please, can we have Megan?
She's like, I don't know.
She doesn't really like to do these things, but please, Carlos would really be appreciative.
Okay.
So I wound up deciding to do, every year I do a girls trip with two of my closest friends.
We've been dear, dear friends for 20 plus years from Chicago.
I said, maybe they'll come join me down there.
I can make a thing out of it.
So that's what our plan was.
Andrea and Rebecca were going to join me and we were going to go down to, I think it's New Orleans for Ozzy Fest.
And we were getting right up to it.
And Abigail Finan is a nutcase when it comes to confirming my appointments.
I mean, she will harass you to like the second I walk on stage to make sure that everything is as it should be in a good way.
Not for the person getting targeted, but for me.
And she kept calling Samir and she wasn't getting called back.
He'd shoot her a note, whatever.
It was just kind of weird for an organization that's, you know, supposed to be a professional news organization and independent media company that Carlos had started with this huge YouTube presence and these other shows and so on.
And we were getting to the point where I was like, all right, you know, if they don't call us back, I'm not going.
It's not really not my problem.
It's their problem.
And then something hit the news that explained why we'd been getting the runaround.
Okay.
It was a New York Times piece that hit, I think, September 26th, 2021.
Okay, September 26th, 2021.
So not that long after we'd been on each other's shows and so on.
And here's the headline of the New York Times piece.
Goldman Sachs, Ozzy Media, and a $40 million conference call gone wrong.
I'm going to read you some of this piece.
This past winter, Goldman Sachs was closing in on a $40 million investment in Ozzy, a digital media company founded in 2013.
And there seemed to be a lot of reasons to do the deal.
Ozzy boasted of a large audience for its general interest website, its newsletters, its videos.
And the company had a charismatic chief executive, Carlos Watson, a one-time cable news anchor.
He worked at MSNBC, who had worked at Goldman Sachs early in his career.
FYI, he went to Harvard undergrad and Stanford law school, though it does not appear he practiced law for any meaningful time, if at all.
And crucially, Ozzy said it had a great relationship with YouTube, where many of its videos attracted more than a million views.
All right, I'm going to pause here.
So this is all consistent with what I knew of Carlos and Ozzy Media at that time.
And what was happening was Carlos is trying to get another round of funding into his company so he could expand.
I don't do funding on the Megan Kelly show.
I never have.
I don't take big investments from outside investors to fund my show or my hiring.
I have a partnership with Sirius, which has been a blessing and it's worked out amazingly.
But I don't go to investors to have them give me their money so that I can put this show on the air.
It would create more problems than it would ever solve.
That's my business model.
There are many other places that do take money.
I think the Daily Wire, you know, has, I know that they have some investors and that's fine.
I'm not criticizing them at all.
I'm just saying there's different models.
And Carlos was more in that model where he was taking outside investment, trying to grow his company.
Well, in an effort to do that, he had gone to Goldman Sachs and he had asked for over $40 million.
And Goldman Sachs will give you $40 million for your media company if you can show that you are a success and that you're going to make this money plus back for them.
They're not in the business of charitable donations.
So they were going through this process.
And one of the things that Goldman Sachs wanted to do before it loaned Carlos or invested Carlos Watts in Carlos Watts' company was to see more about those YouTube numbers because that was really the crux of his success.
That's where he was putting all his points on the board.
That plus his alleged newsletter, which he was claiming had 20 million subscribers, which is huge, huge.
So they asked, Goldman did, if they could have a conference call with the YouTube executive responsible for running business with Carlos, for being in business with Carlos, which Carlos said he was with YouTube.
Now, normally the way it works on YouTube is you're not in business with them.
They have a platform.
They'll allow you to come on it unless you really screw up over and over, in which case you could get booted.
But it's not really a business relationship in virtually any case.
Maybe I think they've been trying to get a business relationship with people like Mr. Beast, right?
He's got 300 million subscribers.
But in general, we're all just visitors perched on their platform and they'll allow us to advertise there and to make money there and they make money.
But, you know, it's not like they've hired us or they license us or anything like that.
So there was a man, is a man, named Alex Piper.
I believe it's a man.
Alex Piper, head of unscripted programming for YouTube Originals.
Yeah, it's a man.
And so Ozzy and Carlos Watson and Samir said, yeah, we'll put you in touch with Alex Piper and he will tell you all about how amazing we are on YouTube.
Back to the Times article.
The scheduled participants included Alex Piper, who was running late for the meeting with Goldman Sachs and apologized to the Goldman Sachs team, saying that he had had trouble logging onto Zoom.
Keep in mind, this is 2021 still.
And he suggested that the meeting be moved to a conference call, according to four people.
Once everyone had made the switch to an old-fashioned conference call, the guest, Alex Piper, told the bankers what they had been wanting to hear, that Ozzy was a great success on YouTube, racking up significant views and ad dollars, and that Mr. Watson was as good a leader as he seemed to be.
As he spoke, however, this Alex Piper, his voice began to sound strange to the Goldman Sachs team, as though it might have been digitally altered.
After the meeting, someone on the Goldman Sachs side reached out to Mr. Piper, not through the Gmail address that had been provided by the Ozzy team to Goldman Sachs, but through the YouTube executive, Mr. Piper's assistant at YouTube.
They found another way to go directly to Alex Piper.
That's when things got weird, reading here from the Times article.
A confused Mr. Piper told the Goldman Sachs investor who was calling that he had never spoken with her before, even though he had allegedly just had a conference call with her about how great Ozzy was and Carlos Watson.
Someone else, it seemed, had been playing the part of Mr. Piper on the call with Ozzy.
This is unbelievable.
When YouTube learned that someone had apparently impersonated one of their executives at a business meeting, its security team started an investigation.
The inquiry did not get far before a name emerged.
Within days, Mr. Watson apologized profusely to Goldman Sachs, saying the voice on the call belonged to Samir Rao, the co-founder and chief operating officer of Ozzy and Abigail Finance Friend, who is apparently busy defrauding, defrauding Goldman Sachs.
So he couldn't get right back to Abby about my appearance at OzzyFest.
In Carlos Watson's apology to Goldman Sachs and in an email to the New York Times reporter on Friday, Mr. Watson attributed the incident to a mental health crisis and shared what he said were details of Mr. Rao's diagnosis.
See, he's gone nuts is what Carlos said.
Samir, this is a quote attributed to Carlos, is a valued colleague and a close friend.
I'm proud that we stood by him while he struggled.
And we're all glad to see him now thriving again.
Now, I got to tell you, Abigail Feiner and I were like, oh my God, when we saw this.
It was like, what?
He's in a mental health crisis.
Like, you got to know, like, Abby has stalked this man and he has stalked her to try to get me.
They've had many correspondence.
He did not sound like he was in the middle of a mental health crisis or breakdown.
So we are reading this like, you've got to be effing kidding me, right?
This is in the New York Times.
Like, holy shit.
Close friend.
He struggled.
We stuck by him.
Then he added that Mr. Rao took time off from work after that call and is now back at Aussie.
But it all appears to have like just happened.
So like, how much time could he have taken off?
Like a few days?
It's not like this was years ago.
What are you talking about?
Mr. Rao did not reply to requests for comment.
Okay.
Now, this is everywhere.
This story is everywhere.
And it's a complete professional embarrassment to Carlos Watson.
And it made a lot of news in the cable news industry because it's like, well, this guy used to work at MSNBC.
He's making some weaves.
And now it turns out his company may or may not be a fraud.
He may or may not be a fraud.
We don't know.
So he decides to go back home to the NBC universe.
And he appears on the Today Show, Carlos does.
And he appears on CNBC with Andrew Ross Sorkin, who gets into this call between Samir Rao and Goldman Sachs.
Samir, of course, with the voice alteration technology to make himself sound like a YouTube executive.
And here's how that went on October 4th, 2021.
Your co-founder had a phone call with Goldman Sachs as you were trying to raise money and effectively took them off of a Zoom and then apparently started to impersonate with a fake email address as well, somebody from YouTube.
What happened?
I don't know.
I wasn't there, but I do know that I got a call from the YouTube folks after it saying something strange had happened.
And we figured out what happened.
I immediately called back to the folks at Goldman right away, not four days later, as I think someone wrote at one point.
And look, it's heartbreaking.
It's wrong.
It's not good.
It's not okay.
Okay.
So he decided that it was all Samir Rao's fault and it wasn't Carlos Watson at all.
Now I'm going to jump ahead because ultimately, Carlos Watson and Samir Rao and a third executive were charged by the feds for committing a massive fraud on their investors.
And there's news in the case, which is why we are bringing the curious case of Carlos Watson to you today.
And I will get to all that in due time.
But I want to just flash forward for a moment to the prosecution's elicitation of what happened in that call with the YouTube executive.
Okay.
This is what the prosecutors told the jury actually happened because you heard there Carlos Watson saying it was Samir.
Very sad.
You know, it wasn't me.
It's very unfortunate.
Here is the source here, the DOJ.
And this is in the trial.
There was an eight-week trial of Carlos this past summer.
From approximately November 2020 through February 2021, Watson and his co-conspirators attempted to induce Goldman Sachs to invest up to $45 million in Ozzy by means of material misrepresentations and omissions regarding Ozzy's historical and projected financial results, debts, and business relationships.
Had the full 45 million investment occurred as intended, 6 million of it would have been paid to Carlos Watson personally.
He was trying to get Goldman to invest 45 million and 6 million of it was going to go into his back pocket.
As part of its due diligence, Goldman Sachs executive asked Watson and Rao to arrange a meeting with someone from YouTube.
Watson and his co-conspirators claimed the online video service had paid Ozzie nearly $6 million in licensing revenue for the Carlos Watson show.
This was another misrepresentation.
Ozzy was never paid by YouTube for Ozzy content.
Yet another lie.
They looked at Goldman Sachs, these bankers, and said, not only are we going to put you in touch with the YouTube executive, but that we have been paid $6 million by YouTube for licensing our amazing show.
YouTube doesn't pay two cents to license this amazing show.
And trust me, I would take it.
If they want to pay me $6 million to license my show, great.
Anywho, not what happened in my case or in his.
The difference being I never represented to investment bankers that it did in an effort to induce a $45 million investment.
Fake Contracts and Bessie 00:15:13
Okay.
They go on to say, that, that, that.
Okay, because Ozzy did not, in fact, have any business relationship whatsoever with YouTube, Watson and Rao agreed, agreed that Rao would impersonate a media executive at YouTube in communications with Goldman Sachs.
On January 28th, 2021, Rao, with Watson's agreement, created a fake email address in the name of the media executive.
That's Alex Piper again, which he used to correspond with representatives of Goldman Sachs.
On February 2nd, 2021, Rao had a phone call with employees of Goldman Sachs during which he impersonated said media executive from YouTube using a voice alteration application that he downloaded onto his cellular telephone to mask his voice during the call.
Pay attention here.
During the call, Watson was in the same room as Rao and texted Rao instructions about what to say and what not to say on the call.
What to say?
Can we just, can we rerun Aaron Ross Sorkin?
He was sitting there telling him exactly what to say as the fake YouTube executive.
And now listen to Carlos Watson's explanation again to Andrew Ross Sorkin.
Your co-founder had a phone call with Goldman Sachs as you were trying to raise money and effectively took them off of a Zoom and then apparently started to impersonate with a fake email address as well, somebody from YouTube.
What happened?
I don't know.
I wasn't there.
But I do know that I got a call from the YouTube folks after it saying something strange had happened.
And we figured out what happened.
I immediately called back to the folks at Goldman right away, not four days later, as I think someone wrote at one point.
And look, it's heartbreaking.
It's wrong.
It's not good.
It's not okay.
Every word of that was a lie.
You did know.
You were there.
We figured it out.
You did it.
There's nothing to figure out.
you were part of it.
I immediately called back, Goldman, it's wrong.
It's heartbreaking.
I mean, it is wrong.
It's not heartbreaking to you, maybe that you got caught and now your whole fraudulent empire is crumbling.
But that's just a taste of how it went.
And I must say, though I am not a fan personally of that anchor, he did a very good job in that interview.
He, as I mentioned, also went on with Craig Melvin over on the Today show and said, Ozzy is restarting.
It's, we're, we're opening back up.
Like seconds after they were shut down because all the employees understood that it was a fraud.
And here's how he described it's quick soundbite.
Listen here.
We're going to open for business.
So we're making news today.
This is our Lazarus moment, if you will.
This is our Tylenol moment.
No, no, actually.
And they did try to reopen.
That would not last.
You will not be surprised to hear.
Now, as I mentioned, he was ultimately charged.
The feds did step in and they charged him and his two co-conspirators with, here's the charges against Carlos.
One count of conspiracy to commit securities fraud, conspiracy to commit wire fraud, which is when you get somebody to fraudulently transfer money to you, and aggravated identity theft.
In connection with a years-long scheme to defraud investors and lenders to Ozzy of tens of millions of dollars, tens of millions.
They estimated, actually former COO Samir Rao testified at Carlos's trial.
He estimated that investors poured between 75 million and 100 million into the company.
Those investments wound up worth zero, zero, because there was no there there.
There were almost no YouTube viewers.
There was no groundswell of support behind Carlos Watson's Ozzy media.
He was posting fake YouTube numbers where he claimed to have, for example, a million views on a video.
And those videos would have fewer than 100 comments.
Now, if you get a million views on a video on YouTube, you don't have 100 comments.
I went just to look at, for an example, some of ours.
One video we posted has 4 million views.
It has 177,000 comments.
One video has 3.5 million viewers.
It has 100,000 comments.
You don't post a million dollar or one that gets a million views and have under a thousand comments, a couple, a fewer than a hundred comments on it.
That's a tell.
And it appears they were doing some sort of a scheme where like the video, their videos would pop up in the background of some site you were visiting and you wouldn't even know it was running and it would count as a view, but it explains the total lack of engagement by the audience because they're not even watching it.
And that's why nobody knew who Carlos Watson was.
But he was using this scheme to go to people like Bill Gates and yours truly and say, hey, I have this big YouTube presence.
Please come on my show.
Then the more of us who said yes, the more he'd use our names to go get other big name guests and so on and so forth.
Okay, but that is not all that happened inside of his company.
Listen to this.
The DOJ, okay, talks about in December of 2019, this also came up in trial.
Watson and his co-conspirators, hold on, okay, attempted to induce a bank to lend Ozzie money.
This is before the YouTube thing.
Based on misrepresentations and omissions about Ozzy's business, Watson and his co-conspirators sought to secure the loan with anticipated revenues from a second season of an Ozzy TV show.
However, the contract between Ozzy and the show's cable network for the second season of the show was still under negotiation.
Courthouse News reports that the channel was the Oprah Winfrey Network, and the show was, quote, black women own the conversation in which Watson was the host.
The DOJ alleges that to induce the bank to make this loan sooner, Watson directed Ozzy's then chief financial officer, the CFO, Tripty Thacker, to send the bank a fake signed contract between Ozzie and the cable network, which again, we're assuming is owned, purporting to be signing him up for the second season.
So here again, he's going to a bank trying to get an investment, claiming he had a deal that he did not have.
But this CFO, unlike his COO, Sumir, the CFO, Tripty Thacker, refused to do it.
He wanted her to come up with a fake signed contract showing he had this deal secured.
And she said no.
When she said no, Samir, with Carlos Watson's approval, reading here the allegations by the DOJ, sent the fake contract to the bank copying Thocker.
So in other words, the woman, the CFO said, I'm not doing that shit.
And Samir and Carlos were like, we don't need her.
So they drafted up the fake contract and sent it along and had the temerity, the stupidity to CC the CFO who had just said, I'm not doing that.
Going back to the DOJ's allegation, later that day, Tripty Thakur emailed Watson and Rao to say she was resigning effective immediately.
She explained, quote, this is illegal.
This is fraud.
This is forging someone's signature with the intent of getting an advance from a publicly traded bank.
She continued, to be crystal clear, what you see as a measured risk, I see as a felony.
In subsequent months, Watson and his co-conspirators, again, you're quoting from the DOJ, continued to attempt to induce the bank to lend Ozzy several million dollars based on misrepresentations and omissions, including regarding the expected revenue from the second season of the Ozzy TV show.
During these discussions, the bank requested to speak to a representative of the cable network to conceal the lies about Ozzy's relationship with the cable network and the status of terms of their agreements.
Rao, with Watson's approval, created a fake email address in the name of an actual executive of the cable network, again, which we think is own, which Rao used to impersonate the executive and communicate with the bank about the potential loan.
It's just unbelievable.
This is not like a one-off.
It's not like a momentary lapse of ethics.
It's like a serial fraud that these two were engaged in.
Okay, and then there's another piece that was brought up about the way they lured in this guy, Brad Bessie, who they wanted to be an executive producer at Ozzy.
And what they told this guy who had been the EP of Entertainment Tonight was, we're going to launch.
You're going to be the executive producer of Carlos' new show.
It's going to go on A ⁇ E. We're hot.
It's a hot property.
This is June of 2020.
And they lure this guy in, Brad Bessie, and he's like, it's on.
Great.
I'm going to be, I'm going to be the EP.
I am hired as the EP of the Carlos Watson Show, a daily half-hour interview program produced by Ozzy, hosted by Watson, and it's going to be on in prime time on A ⁇ E. That's what Samir Rao told him.
Okay, I think you already know where this is going.
Mr. Bessie said he had no contact with A ⁇ E executives during the making of the show.
They were making it.
And when he asked Mr. Watson and Mr. Rao about it, they said the executives wanted to talk only to them.
And when Mr. Bessie said he knew several A ⁇ E executives and would be happy to reach out to them, they told him maybe not.
Another warning sign, Mr. Bessie said, was that one of the other producers pointed out that A ⁇ E had already scheduled the show hoarders for the very time slot that was supposedly meant for the Carlos Watson show.
Toward the end of July of 2020, Mr. Bessie got in touch himself with an A ⁇ E executive to confirm that the channel would indeed broadcast the Carlos Watson show.
That is when he learned it would not appear on A ⁇ E, he said.
Mr. Bessie said he resigned when he learned that he'd been lied to.
And in a farewell email to Watson and Rao, which he shared with the New York Times, he wrote, you are playing a dangerous game with the truth.
The consequences of offering an A ⁇ E show to guests when we don't have one to offer are catastrophic for Ozzy and for me.
This is just absolutely incredible.
So all of this comes to a head this past summer when the U.S. attorney, well, first the U.S. attorney charged him, which happened prior to this summer.
And then there was a trial.
Here's the U.S. attorney for the Eastern District of New York, which is Brooklyn, announcing the conviction of Carlos Watson.
Take a listen.
The jury found that Watson was a con man who lied to investors to get them to buy stock in Ozzy Media and to shower him with money to grow the company.
Watson acted as a wizard of Ozzy.
He was the public face of Ozzy Media with control over every aspect of the company as it grew from an internet website to an entertainment platform with grand ambitions.
And while pulling the levers behind the scenes, Watson also had a direct hand in every crime committed by Ozzy Media and its executives as it morphed into a criminal enterprise as they became desperate for cash infusions to fuel Ozzy's growth.
They alleged at trial that they, by the way, they have a lot of sophisticated investors in Ozzie too.
Lorraine Powell Jobs, of course, because she's never seen a woke project that she doesn't like.
Carlos wasn't woke on the air, but he was a black man launching a media company that was supposed to be more centrist in its approach.
And he's seeking out for money in 2020, June of 2020 and so on.
When it was post-George Floyd, I mean, people were dying to give Carlos money.
So in any event, you had at the trial, people like Alex Piper of YouTube testify.
The head of Google, Sundar Pachai, can't remember.
I don't know if that's how you pronounce it.
I've only ever seen his last name written.
They testified for the government, saying they never had deals with Ozzy, with whom Carlos was claiming he did have deals.
And they never considered buying Ozzy at any price, contrary to Watson's claims to investors.
He had said like Google had considered buying and so on.
So they prosecutors said that Watson had also assured investors that Ozzy was thriving even as its cash reserve sank to $19,000 at one point and it was struggling to pay rent, wages, and other basic expenses.
But they still wanted to line their own pockets.
All right.
So all this goes down.
Carlos gets convicted and now he was facing prison time, my friends, prison time of he, the minimum was two years and the maximum was 29, 29.
He wanted the minimum, of course, and the government wanted something like 19 years, I think.
And the sentencing just happened just prior to the sentencing, which was, what was the actual date of the sentencing?
I'm trying to find out.
But it was, it was very recent.
Just prior to the sentencing, guess who, guess who reached out?
It was just this past Monday.
Guess who reached out to the MK show?
Carlos Watson through his PR person.
Yeah.
Yeah.
By the way, Sumir and whatever, and the other, another person at Ozzy, they're also facing charges and they testified against Carlos at trial.
And we'll see how things go out.
They'll probably do better than he's doing because they struck a deal.
Anyway, Carlos said he wanted to come on the show in advance of his sentencing, which we found very interesting.
I mean, I couldn't believe my ears.
I was like, is he really going to come on here?
Judge Smith's Sentencing Drama 00:11:12
I mean, he knows I'm a lawyer.
He knows I'm not going to give him a pass.
We've covered this before since he's gotten in trouble.
And we prepared.
We got ready.
We had all the research pulled and so on and so forth.
And the day of the interview, they canceled to the surprise of no one on our team.
And then like a day or two later, he did pop up on a podcast, one you've never heard of, called Way Up with Angela Yee.
And I will give you a feel for how that went.
Okay, hold on.
I can't see.
I'm looking at my sot list, but what I want here is the soundbite in which he talks about being a black man and what's happening to him.
You and I both know, Angela, that if I were white and I was running a media company that was healthy and hired people and someone in Brooklyn tried to prosecute me, it's like me getting prosecuted, Angela, by Utah.
I don't live in Brooklyn.
I never had an office there.
I never had clients there.
I have nothing to do with that except Ben Smith, the white guy who wanted to buy me and his dad who is a judge.
Did I tell you that Ben Smith's dad is a judge?
You think all this is accidental?
What I'm saying to people is if we allow them to keep snuffing out black excellence, I promise you it won't stop with me.
Oh my God.
He's trying to claim they're after him because he's black.
This is a desperate man.
That nonsense about Ben Smith, he's got a bee in his bonnet about Ben Smith, who did this reporting for the Times.
You know, was at BuzzFeed, then went to the Times and now has launched Semaphore, trying to claim that somehow he had a personal beef against Carlos because like at one point, BuzzFeed tried to buy Carlos and he wouldn't sell.
Meanwhile, Ben Smith had been on my show and we interviewed Ben about this.
And here's what he said, just for the record on it, SAT62.
It would not be true that I had offered him money.
And it's not, you know, he hasn't denied any of the things we reported.
And I think that's, it's not really, it's not really all that relevant to the story.
I wasn't, I was not privy to a deal that he was talking about with BuzzFeed around the time I was leaving.
You weren't involved in that at all.
I said a two-sentence email introducing him to my boss on my boss's request.
That was, that was my involvement.
And that was it.
So Ben Smith, Ben Smith has nothing to do with this.
I don't know why I decided to blame Ben Smith.
And Ben Smith's dad is a judge on New York State's highest court.
This is a federal trial.
And Ben Smith's dad had absolutely nothing to do with it.
I do not know how he took this turn, but you heard that soundbite.
If I were white and running a media company that was healthy and hired people and someone in Brooklyn tried to prosecute me and then he takes a dodge, it's like you, Angela.
You know, you're in Brooklyn and somebody tries to prosecute you in some other jurisdiction like Utah.
I don't live in Brooklyn.
I never had an office there.
I didn't have nothing to do with that except Ben Smith.
Why is it?
Can we just run it again?
Can you run that soundbite again?
You and I both know, Angela, that if I were white and I was running a media company that was healthy and hired people and someone in Brooklyn tried to prosecute me, it's like you getting prosecuted, Angela, by Utah.
I don't live in Brooklyn.
I never had an office there.
I never had clients there.
I have nothing to do with that except Ben Smith, the white guy who wanted to buy me and his dad who is a judge.
Did I tell you that Ben Smith's dad is a judge?
You think all this is accidental?
What I'm saying to people is if we allow them to keep snuffing out black excellence, I promise you it won't stop with me.
All right.
So just first of all, I didn't have nothing to do with that.
Okay.
Because he's going on a show hosted by a black woman playing the race card.
This Harvard and Stanford law graduate.
It's now, I didn't have nothing.
I had nothing to do with that.
Okay, Carlos.
Who do you think you're fooling?
You know, the New York Times would be saying, oh, he's just code switching like Kamala.
We're going to win.
I'm going to win.
Okay.
We hear you talk every day.
We know you don't talk like that.
Stop it.
Ridiculous.
But he gets in front of a presumably mostly black audience and he tries to play the race card and sound like that.
Okay, sure.
If we keep allowing them to snuff out black excellence, I promise you it won't stop with me.
What part was the black excellence?
Was it the way Samir impersonated Alex Piper with voice alteration technology?
Is that, because I think that might be Indian excellence.
I'm not sure.
I haven't looked into Sumir, but it sounds like an Indian name.
I'm not sure.
I know you were pulling the, was the black excellence you, Cyrano, debergiacing it from your phone, texting Samir while he did it?
I like, is that, is that what you mean by black excellence?
Because that's the kind of thing we actually do want to snuff out.
Not so much your straight news interviews, which had you just tried harder, Carlos might have eventually turned into something.
But you decided to shortchange it.
You decided to cheat your way to the top rather than doing the long, hard slog that all of us in this lane have to do.
And let me tell you, I know of what I speak.
Year one on this show, when I went on the Carlos Watson show, when I had Carlos on this show, it was just like that.
It was hard.
It was hard.
You check the downloads.
It builds in inches, not miles.
You know, it doesn't, it's not like one day you tune in and you've got millions of subscribers, not at all.
It takes years and it takes a lot of elbow grease and it takes a lot of patience.
And I've told you before what I kept saying to my team all throughout that lean period was just keep rowing.
Just keep rowing.
And then eventually, hopefully, if you have a good product, you hit smooth sailing, right?
And things start coming your way and you catch a great gust of wind.
Carlos Watson was full of wind and decided to shortchange everything and behave in a criminally fraudulent manner.
And it had nothing to do with snuffing out black excellence that he got criminally charged for his crimes.
Nothing whatsoever.
By the way, that was a black prosecutor you heard announcing his conviction.
As I said, really, really focused on his color now.
So at sentencing, he did the same thing.
When he got up in front of the judge, this was once again, a big thing that he tried to play about the race card.
He told the judge that he was a target of selective prosecution as a black entrepreneur in Silicon Valley, where African-American executives have been disproportionately few.
And he called the case, quote, a modern lynching, a modern lynching.
I made mistakes.
I'm very, very sorry that people are hurt, myself included, like a true narcissist.
Back to me.
I'm sad, but I don't think it's fair.
So he was sentenced on just this past, like last, last Monday, December 16th, by United States District Judge Eric Comety.
And he was sentenced to 116 months in prison, almost 10 years.
He was sentenced to almost 10 years in prison, nine years and eight months.
Holy shit.
Like, I am sorry.
I just can't believe that that guy with the YouTube and Samir and Abby and Ozzy Fest and all, like, he's going to jail.
Well, sentenced for nine plus.
He's probably going to serve around six, to be perfectly honest, with good behavior and all that.
And he's crying, boo effing who with now in the media and elsewhere, trying to get people to feel sorry for him.
After he did all this stuff, he wasn't some passive victim of Samir.
The prosecution proved at trial that he was in on all of it.
And of course he would be.
Look at that email with the CFO.
He's on there.
You can't claim plausible deniability.
The judge actually said that the quantum of dishonesty in this case is exceptional.
It's exceptional.
And here's more, okay?
Before you start to feel sorry for Carlos, which I assume you're not, but he got basically the same time, just a little less than Elizabeth Holmes.
And the judge understood that comparison and was just fine with it.
This is what the prosecution said in their sentencing memo seeking a stiff penalty.
This case is unusual for the audacity, the pervasiveness, and the length of Watson's fraud, as well as for his obstruction, perjury, repeated attacks on the justice system, and complete rejection of any responsibility.
The memo was particularly harsh toward Watson's character.
Quote, the history and characteristics of the defendant also weigh in favor of a serious sentence.
He is dishonest.
The ease with which he lied to victims again and again and the ease with which he lied on the stand is frankly unsettling.
He is manipulative.
He is cynical.
He is callous.
There has never been any indication that Watson feels any empathy for any of his victims, people who believed in him, whom he stole from.
In most cases, a defendant accepts responsibility.
Watson has done the opposite, not just fighting his case on the merits, as is his right, but taking every opportunity to obstruct, to retaliate, to undermine the justice system, and to continue lying and breaking the rules.
Watson's history and characteristics thus further support a substantial sentence.
The memo also said that it was fair to compare him to Theranos' founder, Elizabeth Holmes, who received an 11-year and three-month sentence for defrauding investors of over $100 million.
Same number.
Although Theranos' product was quite different than Ozzie's, argued the prosecution, the lies that Watson told investors were very similar to those told by Holmes.
They lied about revenue and contractual relationships to outside investors while silencing or ignoring concerns raised by employees.
Both sets of founders fully embodied the fake it-till you make it approach and used it as a justification for their behavior.
Like Holmes specifically, Watson played up his image as a charismatic founder, drawing investment to his company based on a success story that he knew was not true, all while actively courting as much press and personal attention as possible.
It's really pretty incredible.
Reflecting on Average Rogue 00:04:40
Think about that.
He is dishonest.
He is cynical.
He is callous.
The ease with which he lied is frankly unsettling.
Let's go back to SAT 52, him on my show.
I want to learn how you're thinking, how you came to that, what you would do with that.
Would you ever consider something else?
Like who moves you?
And you're always going to end up being surprised, right?
Like, you know, and if you, if you stay in it and you're just with the person, they're going to share something that reminds you that most of us are contradictions, right?
Dr. King used to, he loved that quote.
There was a famous quote that used to say, there's enough stuff in me to make both a gentleman and a rogue, right?
And I think very few of us are only one thing or the other.
A gentleman and a rogue.
Maybe that's how he dismisses his own behavior.
It's not just being a rogue to steal, to defraud, to impersonate.
That's next level.
Those are ethical lines.
Even your average rogue doesn't cross.
Once you behave criminally after this society has given you every advantage, you've gone to Harvard.
You've graduated from Stanford law where you made the law review.
You got onto television.
You got hundreds or $800 million of investment from some of the richest Americans alive believing in you, trying to help you build things like your newsletter, which definitely did not have 20 million subscribers.
The most successful have maybe 3 million.
All you should be doing is getting down on your knees and thanking this beautiful country of yours and working hard to earn the respect and the belief in the investment of those people.
Instead, you tried to short track it, to shortchange your journey to the top, like neither a gentleman nor your average rogue.
You know, I think back to my own experience of Carlos Watson and I liked him.
Like so many others, he fooled me into thinking he's a nice guy.
And I've told you this.
I do not have a good, he's actually not a good guy detector.
Doug does.
I really need to listen to Doug, but Doug wasn't really involved in any of this, but I do not.
I kind of thought Harvey Weinstein seemed kind of nice.
I think I've told you he wanted Doug to come right for him.
And Doug was like, hell no.
I'm like, oh, Duggar, that could be cool.
He's like, Meg, he's not a good guy.
I'm like, oh, I don't know.
Anyway, there's a long list of people who turned out not to be great that I thought kind of might be.
Who knows who's in my life right now?
But they say one in four people as a sociopath.
One in four.
Is this one of them?
No empathy for any of the victims.
Still, as he's caught and he's sentenced and convicted saying, poor me, I feel bad for people, including me.
Do you know if somebody like that is in your orbit?
If you're doing business with them, if they're a friend of yours, if they're a family member?
Can you really say you don't have a Carlos Watson in your world right now?
Can any of us be sure?
A gentleman and a rogue.
I don't know, Carlos.
I think you went well beyond that line.
And I don't feel sorry for you.
I feel sorry for the people, even the rich people who gave you their money believing in you and what you stated was your mission.
And I think had you tried harder and longer and been an honest person, you actually, you know, the tragedy here is you might have made it.
There actually aren't a lot of people like Carlos in the digital lane doing sort of just straight down the middle news.
He wasn't left wing.
He wasn't woke.
He talked about that stuff, but in a very reasonable way.
And I think ultimately that product could have prevailed.
To quote the brilliant Gordon Ramsey, what a shame.
And that, for now, will end the curious case of Carlos Watson episode.
He remains free at the moment on $3 million bond.
He is to surrender to prison on March 28th.
Any restitution will be determined after a hearing in February.
Thank you all for listening.
Would love to get your thoughts.
Carlos Watson Surrenders 00:00:17
The email is megan, M-E-G-Y-N, at megankelly.com.
We're back later today with VDH Victor Davis Hanson.
See you then.
Thanks for listening to The Megan Kelly Show.
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