President Donald Trump commuted the criminal sentence of Ozy Media founder Carlos Watson on Friday, just hours before Watson was due to begin serving a 116-month prison term for a multi-million-dollar scheme that included falsely claiming the start-up had deals with Google and Oprah Winfrey, a senior White House official said.
Watson had expected to surrender Friday afternoon to the Federal Correctional Institution in Lompoc, California, before he received word of Trump granting him executive clemency, according to a source familiar with the situation.
Trump also commuted the sentence of one year of probation imposed on Ozy Media for the defunct news and entertainment company’s conviction in the same case.
Trump’s actions remove the criminal penalty imposed on Watson and Ozy.
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Watson, 55, was convicted at trial in Brooklyn federal court last July of conspiracy to commit securities fraud, conspiracy to commit wire fraud, and aggravated identity theft. He was sentenced in December.
In February, a federal judge ordered Watson and Ozy to pay almost $60 million in forfeiture and more than $36 million in restitution.
Watson’s defense attorney, Arthur Aidala, declined to comment Friday when contacted by CNBC.
A spokesman for the Brooklyn U.S. Attorney’s Office, which prosecuted Watson, also declined to comment on the commutation of his sentence.
Glenn Martin, a criminal justice reform advocate, in a tweet on Friday wrote, “We did it,” above a photo of him and Watson.
“President Trump commuted the sentences of Ozy Media and Carlos Watson hours before his surrender,” the tweet said.
″@CarlosWatson is not going to prison today,” Martin wrote.
“First and foremost, thank God for His grace, mercy and the power of redemption. A very special note of appreciation to @AliceMarieFree,” he added, referring to his fellow criminal justice reform advocate Alice Marie Johnson.
“Your advocacy, compassion, and relentless pursuit of fairness have made this moment possible for people like Carlos.”
When Watson was sentenced, then-Brooklyn U.S. Attorney Breon Peace said, “Carlos Watson orchestrated a years-long, audacious scheme to defraud investors and lenders to his company, Ozy Media, out of tens of millions of dollars.”
Prosecutors said that Watson and his co-conspirators between 2018 and 2021 defrauded investors by misrepresenting Ozy’s financial performance, its ongoing business relationships and its acquisition prospects, as well as its contract negotiations.
Ozy abruptly shut down in October 2021, after The New York Times reported that the company’s chief operating officer, Samir Rao, had impersonated a YouTube executive on a conference call with Goldman Sachs.
The investment bank was considering a $40 million investment in Ozy at the time.
