Sundar Pichai Photographer: David Paul Morris/Bloomberg
By Avalon Pernell
Sundar Pichai, CEO of Alphabet Inc. took the witness stand during the fraud trial of Carlos Watson, co-founder of Ozy Media Inc., and testified that the search giant never intended to buy the startup for any money.
Watson is accused of defrauding investors out of tens of millions of dollars by lying about Ozy’s business success, including by bragging that Alphabet’s Google had offered to buy the company for “hundreds of millions of dollars.”
The once high-flying media startup collapsed after the New York Times reported in 2021 that Chief Operating Officer Samir Rao posed as a senior executive at Google’s YouTube unit to praise Ozy during a February 2021 call with bankers Goldman Sachs Group Inc. Rao, who pleaded guilty, previously testified that it was part of his and Watson’s scheme to trick investors into thinking Ozy was profitable.
Pichai told the jury in federal court in Brooklyn, New York, on Friday that an acquisition of Ozy was never discussed, but that Google did consider hiring Watson to head its news programming. A $25 million investment in Ozy would have been part of that deal.
No offer
“Mr. Watson was a critical part of Ozy Media and we were considering an investment in the company to ease the transition,” Pichai testified.
“Have you ever offered to buy Ozy Media for $600 million?” asked prosecutor Dylan Stern.
“No,” Pichai said.
In his opening statement at the trial, Stern said Watson used Google’s bogus offer to attract another Ozy investor after the Goldman incident.
“When the Goldman deal fell through, Watson found another victim and lured them into investing $20 million in Ozy by telling them that Google’s CEO himself had offered to buy Ozy for hundreds of millions of dollars,” Stern said. “That was a lie. But Watson didn’t let the truth get in his way.”
Although Watson reportedly claimed to have a far-reaching relationship with the Google boss, Pichai said they only spoke twice. The first was a conversation lasting “just a few minutes” at a conference, while the second was Watson’s job interview on February 25, 2021, weeks after the Goldman interview.
Watson didn’t get the job.
‘Most disturbing’
Also testifying Friday was Hillel Moerman, one of two Goldman bankers who were called on Feb. 2, 2021, when Rao posed as YouTube executive Alex Piper. Moerman told jurors it was “one of the most disturbing calls I have had in my career.”
Moerman described it as “a surreal experience. The person spoke in an unnaturally deep voice.”
Goldman was considering a $35 million investment in Ozy and had requested the call after Watson claimed YouTube was one of Ozy’s “most important” customers. Rao testified that he used a voice-changing app to conceal his identity and that Watson, who sat nearby as he spoke to the bankers, coached him on what to say.
Another Goldman banker, Allison Berardo, testified Thursday that what she and Moerman heard on the phone call “didn’t sound like a human voice.”
“We were both in shock,” Moerman said. “Something wasn’t right.”
Shortly after the call, the bankers canceled plans for the Ozy investment.
Jurors also heard Friday from Ozy’s chief of staff, Suzee Han, who has pleaded guilty and is cooperating with prosecutors.
“I lied about Ozy’s past performance and historical financials,” Han said. “We, and I mean Carlos, lied about how the company was doing at that time, i.e. about the current performance of the company. We lied about how the company would do it.”
First print: June 15, 2024 | 9:05 am IST