So extreme that another Ozy executive impersonated a YouTube executive to hype Ozy to investment bankers — while Watson coached him, prosecutors said.

Watson, 55, and the now-defunct company were found guilty last summer of charges including wire fraud conspiracy. He has denied the allegations.

Watson, 55, and the now-defunct company were found guilty last summer of charges including wire fraud conspiracy. He has denied the allegations. AP

Watson, who has been free on $3 million bond, faced a mandatory minimum sentence of two years in prison and potentially as much as 37 years.

Prosecutors accused the former cable news commentator and host of playing a leading role in a scheme to deceive Ozy investors and lenders by inflating revenue numbers, touting deals and offers that were nonexistent or not finalized, and flashing other false indications of Ozy’s success.

Watson even listened in and texted talking points while his co-founder posed as a YouTube executive to praise Ozy on a phone call with potential investors, prosecutors said.

“The quantum of dishonesty in this case is exceptional,” US District Judge Eric Komitee said, later telling Watson: “Your internal apparatus for separating truth from fiction became badly miscalibrated.”

Watson blamed any misrepresentations on others, and he said he was a target of “selective prosecution” as a black entrepreneur in Silicon Valley, where African American executives have been disproportionately few.

Prosecutors accused the former cable news commentator, shown in court in 2023, of playing a leading role in a scheme to deceive Ozy investors and lenders by inflating revenue numbers, touting deals and offers that were nonexistent. CP

“I loved what we built with Ozy,” he said in court Monday, initially addressing supporters in the audience before the judge suggested he turn around. He portrayed himself as a founder who put everything he had into his company, saying that he took an average salary around $51,000 from Ozy in its final years, has triple-mortgaged his home and drives a 15-year-old car.

The co-founder, Samir Rao, and former Ozy chief of staff Suzee Han pleaded guilty and are awaiting sentencing. Both testified against Watson.

Ozy, founded in 2012, was styled as a hub of news and culture for millennials with a global outlook.

Watson boasted an impressive resume: degrees from Harvard University and Stanford Law School, a stint on Wall Street, on-air gigs at CNN and MSNBC, and entrepreneurial chops. Ozy Media was his second startup, coming a decade after he sold a test-prep company that he had founded while in his 20s.

Ozy, founded in 2012, was styled as a hub of news and culture for millennials with a global outlook. Above, Watson in 2016. Richard Shotwell/Invision/AP

Mountain View, Calif.-based Ozy produced TV shows, newsletters, podcasts, and a music-and-ideas festival. Watson hosted several of the TV programs, including the Emmy-winning “Black Women OWN the Conversation,” which appeared on the Oprah Winfrey Network.

Ozy snagged big advertisers, clients and grants. But beneath the outward signs of success was an overextended company that struggled — and dissembled — to stay afloat after 2017, according to insiders’ testimony.

The company strained to make payroll, ran late on rent and took out pricey cash advances to pay bills, former finance vice president Janeen Poutre told jurors. Meanwhile, Ozy gave prospective investors much bigger revenue numbers than those it reported to accountants, according to testimony and documents.

On the witness stand in July, Watson said the company’s cash squeezes were just a startup norm and its investors knew they were getting unaudited numbers that could change.

Ozy disintegrated in 2021, after a New York Times column disclosed the phone-call impersonation gambit and raised questions about the true size of the startup’s audience.

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After fleeing criminal charges in Tokyo two years ago, the former Nissan chief Carlos Ghosn waged a public campaign attacking the Japanese justice system, arguing that conditions in the country’s prisons were designed to “lead you to despair.”

Now, Michael Taylor, the American who engineered Mr. Ghosn’s dramatic escape, is experiencing those harsh conditions for himself, his legal team says, as it campaigns to have him returned to the United States.

Mr. Taylor, the former Green Beret who spirited Mr. Ghosn out of Japan in a speaker box, has suffered frostbite because of a lack of heating at Fuchu Prison in suburban Tokyo, where he is serving a two-year sentence, his lawyers say .

Mr. Taylor, 61, and his son, Peter, 28, who aided the escape, pleaded guilty in June in a Tokyo court after having been arrested in the United States and extradited. They are now awaiting approval from the Japanese authorities as they seek to serve the rest of their sentences in an American prison.

While Michael Taylor may be one of Japan’s highest-profile convicts, his experience in its penal system is not unique. Japan has come under scrutiny at home and abroad for its treatment of prisoners and detainees, with critics pointing to inadequate medical care and an almost ubiquitous lack of heating and cooling that can lead to life-threatening illness.

Since being sentenced last year, Mr. Taylor has been kept in an unheated cell, sitting on a thin mat that offers little protection from the cold cement floor, said one of his US-based lawyers, Paul Kelly.

Mr. Taylor’s frostbite developed while he labored in a prison factory, Mr. Kelly said. Fuchu inmates are not allowed to wear gloves at work, he added, and they are required to wash their hands multiple times a day in cold water as part of the facility’s hygiene regimen.

A prison doctor diagnosed Mr Taylor with frostbite in January, according to Mr Kelly. His fingers had turned red and were starting to blister, the lawyer said.

Mr. Taylor is not able to speak directly with his family or his US legal team, but he described the diagnosis to one of his Japanese lawyers during a recent jailhouse visit. The lawyer reported Mr Taylor’s condition in emails to his family and Mr Kelly.

“We’re distressed,” said Lamia Taylor, Mr Taylor’s wife. “This is serious now. This is a health issue.”

Contacted by The New York Times, Japan’s department of corrections said that it could not comment on individual cases but that prisoners were provided adequate clothing, blankets and medical care for cold conditions.

A spokesman for the US Embassy in Tokyo declined to comment on Mr. Taylor, citing privacy considerations, but said that the United States had “long expressed concern to Japanese authorities about inadequate heating in prisons and detention centers, and continue to encourage the authorities to improve conditions.”

In recent weeks, as Mr. Taylor and the other prisoners have been restricted to their cells to prevent the spread of the Omicron variant of the coronavirus, he has had more access to blankets, allowing his condition to improve, Mr. Kelly said.

Still, Mr. Taylor’s experience highlights longstanding concerns about the Japanese prison system, which local activists have criticized as unsafe and overly punitive.

updated

Feb 4, 2022, 9:47 am ET

Yuko Shiota, a spokeswoman for the Center for Prisoners’ Rights, an advocacy organization that campaigns for prison reform in Japan, said that prisoners were often diagnosed with frostbite, sometimes so severe that it could lead to amputation.

“They say they have an insufficient budget, and the problem has not improved,” she said of the lack of prison heating systems.

In the 2020 edition of its annual report on global human rights, the US State Department noted that in Japan “some prisons continued to lack adequate medical care and sufficient heating in the winter or cooling in the summer.”

Mistreatment of foreign prisoners and detainees in Japan has been thrust into the spotlight in recent years by several cases in which a lack of adequate medical care led to serious injury or even death.

Last spring, a young woman from Sri Lanka died in a detention facility in Nagoya after officials there repeatedly refused to grant her requests to be transferred to a hospital. A government investigation into her death declined to assign blame but recommended reforms to the center’s medical procedures.

In fleeing Japan in 2019 just before New Year’s Day, Mr. Ghosn cited his belief that Japan’s justice system would never give him a fair trial. He was out on bail after having been arrested multiple times on charges of financial wrongdoing — charges that he called a product of corporate intrigue backed by the Japanese government.

Mr. Taylor and his son helped him plan and execute his escape, part of which included being hidden in a box that was put on a flight first to Turkey and then to Beirut. Mr. Ghosn has remained in Lebanon, free from the threat of extradition, and he has been trying to rehabilitate his image.

The Taylors returned to the United States, where the father shared with the news media his story of helping Mr. Ghosn flee. The American authorities arrested the Taylors in the spring of 2020, acting on an extradition request from Japan.

They spent months battling the extradition, arguing in court that prison conditions in Japan amounted to torture. But they were handed over to Japan last March and put on trial three months later. Mr Taylor was given a sentence of two years, and his son received one year and eight months. Peter Taylor is being held in a different prison.

In October, the United States approved the Taylors’ application to serve out the remainder of their sentences in the US prison system. But the Japanese government is “dragging their heels,” Mr. Kelly said.

An official from Japan’s Ministry of Justice said that the transfer process typically took at least a year.

Hisako Ueno contributed reporting.

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