Judge Conflict or Innocence: What Matters More?
What if, in the end, we find the judge is conflicted, and the defendant is innocent?
I believe many people view Carlos Watson’s motion before the US Court of Appeals for the Second Circuit—where he requests the removal of his trial judge, US District Court Judge Eric Komitee, and the vacating of his conviction—as a secondary issue.
The main issue is not whether the judge was compromised and presided over a trial where the alleged victims were his longtime business partners and friends—something he did not disclose during the trial—but, rather, whether Watson is innocent.
And because a federal judge—and a very rich one at that—ran his trial to please his friends, was an innocent man convicted?
Most people prefer to avoid nuanced due process issues, such as a judge being conflicted or appearing to be conflicted, and most people assume judges are neutral. But what if one wasn’t? Most people might only care if Watson is innocent.
Some might argue that even if the judge wanted Watson convicted, Watson was guilty, so what’s the harm?
Challenging the Assumptions of Guilt
There is plenty of harm. We’ll get to that later.
The US Attorney for the Eastern District of New York made allegations against Watson and Ozy Media, painting a picture of a criminal and his enterprise. But I see a different story.
Based on the evidence at trial, Watson is not a fraudster, and Ozy is not a criminal enterprise.
Watson and Ozy did not engage in a conspiracy to commit securities fraud, conspiracy to commit wire fraud, or aggravated identity theft.
Carlos Watson
Achievements of Ozy Media Under Watson
Watson, with his family, and hundreds of employees and contractors, built Ozy into a viable company that published five newsletters, produced fourteen television shows, produced top-ten podcasts, built an awards program, put on festivals , and developed more than 200 top-tier advertisers like Coca-Cola, Target, and Wal-Mart.
Watson helped Ozy win an Emmy and submitted two series for Pulitzer Prize consideration.
Ozy was a company BuzzFeed tried to acquire, offering $300 million. Watson had a good reason to turn down its offer. In September 2021, JP Morgan was preparing to value Ozy at $2 billion.
Watson was the visionary and entrepreneur. He oversaw content, set the company’s direction, brought in investors and advertisers, and established a corporate governance infrastructure, engaging reputable outside law firms, investment banks, board members, and accounting firms.
Watson and his family invested their own money each time Ozy raised capital from investors. Watson deferred salary and secondary stock sales to free up funds to hire more people, produce programs, and grow the company’s infrastructure.
Watson and his family invested approximately $20 million in Ozy, including cash, deferred salary, and deferred stock options. Fraudsters do not build companies, establish outside control and accountability, and invest their own, and their families’, money in a fraudulent enterprise.
Samir Rao (second from left), Carlos Watson (middle), Suzee Han (far right)
The Role of Rao and Han in Ozy’s Downfall
By contrast, the government’s cooperators, people who testified against Watson to get a vastly reduced sentence—former Ozy executives Samir Rao and Suzee Han—were responsible for finance, tech, and operations.
As Ozy grew from digital-only to a five-part media company, Rao and Han found they lacked the skills to perform their functions competently. They took shortcuts.
Ozy employees, including some of the government’s witnesses, knew that Rao engaged in his deceptive acts alone. For example, when an executive resigned after discovering Rao created a forged contract, she clarified that Rao had engaged in deceit. She emailed Rao’s wife, underscoring her disappointment in Rao (not Watson), and messaged Watson on LinkedIn to express her admiration for him.
Watson hired top-tier law firms and investment banks to ensure compliance during fundraising rounds. He sought the advice of investors and board members, including Tom Franco, Mike Moe, Laurene Powell Jobs, and Maurice Werdegar. OZY’s board met quarterly or semi-annually on a formal basis, and there were weekly, if not daily, calls.
Laurene Jobs
The Deceptive Acts of Samir Rao
Despite Watson’s efforts, Rao engaged in shortcuts and deception. He did it for his gain and advancement in the company.
Rao admitted to
doctoring Ozy’s general ledger;
orchestrating a juggling act to manage Ozy’s loans with merchant lenders;
fabricating documents
providing fake invoices
creating fake UCC termination emails to lenders;
forging a contract;
registering a fake website;
creating fake email personas to impersonate an Oprah Winfrey Network (OWN) employee;
forging the signature of an OWN partner on a contract
sending the altered contract to Hanmi Bank.
Every crime, every single crime, began and ended with Rao. But Rao and his coconspirator Han made a deal—as cooperators—to blame Watson.
Samir Rao
The Real Villains and the Government’s Missteps
Rao is the real villain. Han, his direct employee, was his accomplice. It seems they will escape paying for their crimes by adopting the government’s desire to make Watson the fall guy.
Even so, even without the perjury of Rao and Han, the US Attorney’s Office went out of its way to get things wrong, and Judge Komitee certainly did not try to make things right.
The Truth About Ozy’s Revenue
Ozy’s revenue was not inflated. Watson knew about OZY’s revenue, but Rao and Han were the finance people. Watson focused on Ozy’s vision, content, diversified business model, and key partnerships.
The government ignored the distinction between Watson’s role as a visionary leader and the financial misconduct orchestrated by Rao and Han.
While prosecutors alleged Watson directed Rao and Han to overstate Ozy‘s income, the accounting errors made by Rao and Han did not result in inflated revenue. Between 2016 and 2021, Ozy reported to investors that its gross revenue was $182 million. Prosecutors claimed this was a lie and alleged Watson knowingly participated in this alleged inflation.
However, Watson engaged top accounting firms to review the company’s finances. Their analysis revealed a surprising truth: Ozy‘s income was understated, not overstated.
According to reports by Bland Waxman and TechCXO, Ozy actually generated $186 million—$4 million more than Rao and Han had reported.
Rao and Han, lacking the competence to accurately manage Ozy‘s finances, failed to account for key contracts with JP Morgan, Discover, and Intuit. They also neglected to include millions in barter revenue, failed to distinguish between gross and net income, and conflated cash and accrual accounting standards.
This analysis could have dismantled the prosecution’s central argument—that Watson conspired with Rao and Han to inflate Ozy‘s revenue to mislead investors. Yet, Judge Komitee barred Watson from calling the accountants as witnesses, depriving the defense of a critical rebuttal to the government’s case.
The Goldman Sachs Call: A Turning Point
The prosecution’s case centered on a fraudulent call made by Rao to Goldman Sachs on February 2, 2021. Rao, posing as a Google executive, provided a reference for Ozy to solidify an investment.
It was Rao, not Watson, who did the impersonation and committed identity theft.
Rao confessed in letters and during FBI interviews that the impersonation was his idea alone. He admitted he acted without Watson’s knowledge or involvement. Han corroborated this, stating that Rao had taken full responsibility for the scheme.
Watson addressed the situation immediately upon learning of Rao’s impersonation, notifying both Goldman Sachs and Ozy‘s board on the same day the crime occurred. Watson’s mistake was trusting Rao’s excuse—that he had suffered a mental breakdown.
The Forged Contract: Rao’s Solo Deception
Watson had no involvement in the fake contract Rao submitted to Hanmi Bank. Initially, Rao claimed Watson had asked an employee to draft a legitimate contract, which Rao then used as a template for his forgery.
However, the prosecution produced no evidence linking Watson to the forgery. Despite this lack of evidence, the defense was blocked from impeaching Rao using his initial FBI statements—a move by Judge Komitee that raised serious concerns about the fairness of the trial.
Contrary to the government’s claims, Watson never misrepresented potential investors. He had signed term sheets from prominent figures and organizations expressing interest in Ozy, including Oprah Winfrey, Alex Rodriguez, and Live Nation.
Oprah Winfrey
Watson Never Claimed a $600 Million Google Takeover Offer
Watson never claimed to Antara Capital, a potential Ozy investor, that Google had made a $600 million takeover offer for the company. Want proof? Antara, in its due diligence process, created a detailed 35-page investment memo. If Watson had made such a claim, Antara would have highlighted it in the memo, as it would have significantly enhanced the perceived value of their potential investment.
The memo did not mention any such offer. Furthermore, there were no emails, text messages, or other communications from Watson to anyone asserting a $600 million offer from Google.
No Evidence of Watson Directing Fraud
Watson did not direct Rao or Han to alter Ozy’s books, fabricate contracts, engage in forgery, or misrepresent the company’s numbers. The government never produced a single email or text message showing Watson instructing others to commit fraud.
Instead, the prosecution’s case relied entirely on the testimony of two cooperators, Rao and Han, who admitted to committing every act of fraud and deception themselves. These were their crimes, executed by their hands.
Samir Rao entering court
The Injustice of Cooperation Deals
In the U.S. government’s prosecution system, cooperators often receive substantial sentence reductions. On average, cooperators see more than half of their sentences shaved off, and in some cases, they receive probation.
Rao and Han were incentivized to blame Watson for their leniency deals. They altered their narratives from exonerating Watson to implicating him. The prosecution’s case rested on these incentivized testimonies, which were shielded from rigorous cross-examination by Judge Komitee.
The Judge’s Conflicts of Interest
Judge Komitee’s financial ties to Goldman Sachs, a central “victim” in the case, cast a long shadow over the trial. His disclosed net worth of up to $102 million is largely tied to investments directly or indirectly connected to Goldman Sachs and other Watson-related alleged victims.
Komitee’s role in the trial went beyond mere oversight. He acted as a de facto prosecutor, ensuring that key witnesses and evidence favorable to Watson’s defense were excluded.
Judge Eric Komitee
Judicial Integrity
When a judge with clear conflicts of interest refuses to recuse themselves and presides over a trial with apparent bias, the defendant’s guilt or innocence becomes secondary. The integrity of the judiciary is paramount.
In Watson’s case, the evidence—once the perjury of Rao and Han is stripped away—strongly suggests his innocence. But even if that were not the case, the judge’s failure to disclose his financial entanglements and his active role in favoring the prosecution demand the conviction be vacated.
Most of his wealth is directly or indirectly tied to Goldman Sachs – the headline victim in Watson’s case.
In Watson’s case, the judge acted as a prosecutor. The investigation into why Komitee was conflicted, and possibly worse, traces back to his history with Goldman Sachs and his desire to please his longtime partners and friends.
We will provide more information later.
However, it’s important to note that one of the wealthiest judges in America amassed his fortune through Goldman Sachs, which is considered a supposed victim in the Watson case. Judge Komitee went out of his way to remain involved in the case when he should have recused himself, and he took additional steps to ensure Watson was convicted.
This case involves two perjuring criminals who were essentially given “get out of jail free” cards.
Is He Innocent?
Additionally, there is one crucial point that should be mentioned, even though it may seem unrelated to the due process requirement for vacating Watson’s conviction.
When an outlier judge takes the law into his own hands and behaves in a way that warrants impeachment, the innocence or guilt of the defendant becomes irrelevant. The case must be dismissed. Upholding an honest judiciary is more important than ensuring that every guilty person is convicted.
On top of everything else, once you discount the lies of Rao and Han (which the jury would have done if the defense had been allowed to conduct a proper cross-examination), the evidence strongly suggests Watson is innocent.
In a warped world where the prosecution and the judge want the same result, things like this are bound to happen.
An innocent man is convicted, and an arguably corrupt judge will continue to increase his net worth by short-selling stocks and justice.
