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About this Episode
We’ll be back in two weeks with brand new episodes. In the meantime, here’s one of our favorite episodes, about a wannabe media magnate whose big vision ran on even bigger lies.
Carlos Watson is a Stanford Law School graduate with big Silicon Valley connections and even bigger dreams. When he pitches investors on his idea for a Millennial-focused news website called Ozy Media, it seems like a sure bet. It’s the early 2010s, and online media start-ups have generated tons of buzz – and more importantly, tons of clicks. But Carlos doesn't actually know what he’s doing. And when Ozy fails to attract the readers he’s promised his investors, he decides to ditch the business of truth-telling and go rogue.
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Hosts & Guests
Transcript
Audible subscribers can listen to all our episodes of scam flancers at free right now.
Join Audible today by downloading the Audible app.
We'll be back in two weeks with an all-new episode of scam flancers,
but today we're revisiting the spectacular rise and even more spectacular fall,
a former political pundit and wannabe media sion, Carlos Watson.
That's right, we're talking about Aussie media, a scrappy media startup
that was so desperate to succeed.
They juiced their views and scanned their investors, business partners, and customers.
Carlos was convicted in federal court and sentenced to nearly 10 years in prison for fraud.
He was literally on his way to report to a federal correctional institution in California last year
when everything changed.
Just hours before he was set to begin serving his sentence,
Carlos was pardoned by President Trump.
Some people get all the luck, you know?
A presidential pardon.
Why? Why?
Anyway, good for him.
Couldn't happen to a nicer guy, I think.
In a statement, Carlos thanked the president for what he called correcting a, quote,
grave injustice.
He also criticized the federal judge who sentenced him as, quote,
conflicted and unethical.
And the clemency didn't just apply to Carlos personally.
The president's actions also wiped out the penalties imposed on Aussie media.
It's like it never happened at all and nobody was affected by it anyway.
Yeah, it is like that.
Well, it's a last minute pivot worthy of the story itself.
So with this stunning update in mind, we are revisiting our episode on Carlos Watson,
the ambition, the unraveling, and the commutation that came just in time.
Sarah, we've both been laid off from digital media companies in recent history.
Do you have a fantasize about quitting media and starting from scratch in a whole new career?
Like, maybe we could become welders.
I don't actually fantasize about it because I have no other skills.
So there's really nothing to fantasize about.
Like, I can't learn how to do anything new or can I do anything else.
Right.
Today's episode is a doozy.
It's all about the unbelievable hubris of the 2010s media boom,
and a guy who decided that he had to be at the center of it.
And no, I'm not talking about my former boss or your former boss or any of our bosses.
I can't wait to take you through this episode.
You're gonna get so mad.
It's a foggy morning in Los Angeles in February 2021.
Alex Piper is working from home.
He's a 40-something-year-old white guy with dark eyes and salt and pepper hair.
And he's also the head of unscripted programming at YouTube.
This morning, his assistant is on the phone, letting him know that someone at Goldman Sachs is on the line.
They say they want to clarify some comments that Alex made about Aussie media in a meeting earlier that day.
Sarah, do you remember Aussie media?
Yes.
I don't know how you could be a writer online and not have heard of Aussie media.
Yeah.
Well, we'll get into the whole thing in a second.
But the Goldman reps as they're calling about Aussie media's daily YouTube talk show.
It's called the Carlos Watson Show, and it's named after the host and founder of Aussie.
In a meeting earlier that day, Alex had supposedly told Goldman Sachs that the show was a big success,
and that YouTube was considering making it its premium talk show that would mean more money and more promotion.
On the phone call, Alex even raved about Carlos Watson himself.
Now, the rep is asking him to expand on these comments.
But Alex has no idea what they're even talking about.
Not only has he never spoken with this Goldman Sachs team before, he's never even worked with Aussie or the Carlos Watson show.
So Alex tells them,
That wasn't me on the phone with you.
Alex reports the incident to his bosses at YouTube and Google.
And everyone he works with wants to know the same thing.
If Alex wasn't on the call saying those things, then who was?
And this question will ignite a firestorm that undermines Aussie media,
its charismatic founder, and the entire industry of digital media.
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From Wondery, I'm Sachy Cole, and I'm Sarah Haggy.
And this is scam flancers.
Aussie media is an over-the-top version of the story of so many media startups in the 2010s.
From my former employer, BuzzVee News, to Sarah's former employers,
vice and gocker, we have both been victims of the digital media boom and bust.
Trust us when we tell you a lot of this industry is just scam.
With Carlos Watson's startup, this con is unparalleled.
I'm calling this one Aussie media, pivot to fraud.
Our story starts in June 1995.
It's a sunny day in Palo Alto, California.
The quad outside Stanford Law School is bustling with smarty pants kids and black graduation robes.
They're hugging their classmates and posing for photos with their families.
And Carlos Watson is one of them.
He's 26, black, handsome, with closely shaved hair and a broad, warm smile.
And he has what the kids might call Riz.
He's the kind of guy who would make you feel like you're the only person in the room.
Graduating from Stanford Law seems like a natural progression for Carlos.
He went to Harvard for undergrad and spent time working for the mayor in his hometown of Miami,
and for Florida Senator Bob Graham.
Growing up, he attended an elite private school, but he doesn't come from wealth.
His family just really cares about education.
Carlos's father is a Jamaican immigrant and sociology professor.
His mother is a Mississippi-born, full-bright scholar with a PhD.
This family collects degrees.
There are also a bunch of news junkies.
In an interview with Black Enterprise, Carlos credits his dad with inspiring his love of the news.
As a kid, we would go to the Miami Airport and he would tell me,
run inside, buy him newspapers from around the world.
And you know when someone eyes light up, whether you're bringing them good food,
that's how his eyes would light up when you would bring him those newspapers.
So I grew up loving media.
I mean, I grew up loving media too, but it was more like the Simpsons.
You know, like I couldn't imagine being a news lover.
That was me, I'm so sorry to say.
Of course it was.
I know, I know.
Well, Carlos never loses his love for the news.
But his first big jobs are all in politics.
He gets hired as chief of staff and campaign manager for a state legislator from Florida,
and he briefly works on Bill Clinton's presidential campaign.
After Stanford, Carlos spends two years as a consultant for McKinsey.
He's making pretty good money, but he wants to give back.
He wants to help kids like him.
Smart, college-bound students who don't have a lot of money,
at least compared to their peers.
And like everyone else in Silicon Valley around this time,
Carlos thinks he can save the world and get rich while doing it.
So in 1997, he starts a company.
It's a nonprofit called College Track,
which helps kids and underserved communities apply for college and find scholarships.
He loops in a co-founder, Lorraine Powell Jobs.
Carlos met her while tutoring high school students in East Palo Alto.
And Lorraine just happens to be married to Steve Jobs.
Yes, that's Steve Jobs.
So while Carlos is still just in his 20s,
he already has friends in high places.
And he's also internalized the Silicon Valley mindset.
And now, Carlos is ready to take the move fast and break things mentality
to the industry he's loved since childhood.
By the early 2000s, Carlos has decided that what he really wants to do
is host his own TV show.
But when Carlos starts to pitch the show idea to networks,
he gets rejected everywhere.
He has literally no TV experience.
But Carlos must have done something right in those pitch meetings
because he gets invited by Fox and Core TV to go on their shows
and talk about business and politics.
He does well.
And he starts making the rounds as a pundit on various cable networks.
And then in 2003, Carlos gets his big break,
guest hosting a slot on CNBC.
He crashes it and he gets invited back.
Carlos is making a name for himself.
He starts hosting specials on CNN,
call him on their website, and co-anchors their election night coverage in 2004.
He also hosts an interview series on NBC.
Wolf Blitzer tells Stan for lawyer magazine that Carlos is a natural.
After a few more years, he lands the job he's been gunning for this whole time.
His own show.
It's called Live with Carlos Watson and it launches on MSNBC in 2009.
Carlos finally has his moment in the sun.
Except it only lasts three months.
We don't exactly know why, but Carlos later says it just wasn't the right fit.
But this role was a huge deal for Carlos.
He has this insatiable thirst to be universally liked and respected as an authority figure.
From the time he started pitching his show,
Carlos rather ominously compared himself to Charlie Rose.
Being a primetime anchor on MSNBC made that dream come true, if only briefly.
So after the show ends, Carlos is ready to do whatever it takes to get that power again.
And he knows he can't do it alone.
It's the early 2010s, and a banker named Samir Rao is on his way to lunch.
Samir has dark hair, a soft face, and he is tired.
For years, he's been working as an associate for Goldman Sachs in New York City,
and he hasn't been sleeping much.
But today, he's in California,
and he turns to the place where so many dudes in their 20s have turned before him.
Chipotle.
As Samir walks through the Chipotle parking lot,
he reportedly runs into a familiar face, Carlos Watson.
Samir and Carlos briefly work together in finance after Carlos left MSNBC,
and they actually have a lot in common.
They're both Harvard grads and were raised by immigrants.
Samir's parents came to the US from India.
He grew up in a suburb of Detroit before getting a math degree and landing a job at Goldman.
And eventually, as this story goes,
Samir and Carlos' conversation in the Chipotle parking lot lands on this question.
How could we reimagine the news for a globally-minded, discerning, and diverse group?
Or at least, this is the origin story that Samir and Carlos later published on their website.
This is truly one of the dumbest things I've ever heard.
Like, reimagining the news for a globally-minded, discerning, and diverse group.
So you mean everyone?
Yeah.
Well, Samir isn't pressed by Carlos.
He's got a vision, and he's super well connected.
Maybe Samir even sees his future self in Carlos, who's about 15 years older than him.
Over the next few months, Carlos and Samir cook up a new digital media startup.
They call it Aussie Media, after the poem Aussie Mandius by poet Percy Shelley.
Yes, it is the one about the futility of human effort, including the line,
look on my works, ye mighty, and despair.
I always wondered if Aussie was because of the poem,
but I never looked into it because I didn't want to know.
And now that I do know, I mean, the writing was on the walls.
They said it the first time, and we just didn't hear it.
Well, on the Aussie website, they say that they interpret the poem
as a call to think big while remaining humble.
Of course, this is on the same website where they self-pathologize
with the story about a Chipotle parking lot, so do with that what you will.
The website also includes whimsical biographies of the founders.
It notes that Samir is a classically trained musician who composes jingles,
just for fun, and that Carlos has played pickup games of basketball
in places like Iceland and Zimbabwe.
Together, the two founders start plotting Aussie's path to the top.
They have a vision for an expansive, captivating media company
that meets millennials where they are online.
There's just one problem, and everybody else has that exact same idea.
In 2013, Carlos and Samir go to one of Carlos's old pals for money,
Lorraine Powell Jobs.
Lorraine is running her own company, the Emerson Collective,
which invests in everything from education to health care, and, of course, media.
I picture Carlos and Samir sitting in Lorraine's modern offices in downtown Palo Alto
as Carlos explains that Aussie will be the HBO of news.
Not only will Aussie uncover what's new and next, it'll be, quote,
what cool people read to be smart and smart people read to be cool.
Sarah, what do you think that all actually means?
I don't think those words altogether really have meaning,
but I think media companies are always trying to be cool.
Without realizing that news isn't cool, it's fundamentally uncool.
Yeah.
So to me, this says it all, because every company I've written for basically has this mandate.
For people who work hard and play hard.
Well, it's a big, bold, big pitch.
But media is going digital, and venture capitalists want in.
This is the era where everyone is taking BuzzFeed quizzes and watching vice documentaries.
Now, Aussie is pitching itself as a competitor.
Plus, Lorraine knows Carlos.
Her company leads Aussie's first round of fundraising, which ends up netting more than $5 million.
Lorraine even joins the Aussie board.
Carlos manages to get some other Silicon Valley backers involved as well.
It doesn't hurt that Aussie starts co-hosting an annual Christmas party with the Emerson Collective.
These investors give them cash, sure, but more importantly, they give Aussie an era of credibility,
which leads to even more cash.
In 2014, Carlos gets $20 million from Berlin-based publishing giant Axel Springer.
And that sounds like a lot of money until you hear what the other guys have.
At this point, vice has over half a billion dollars in funding.
But there's just one thing standing in Carlos's way.
He's never actually run a media company before.
And getting clicks isn't as easy as it might seem.
But Carlos will do whatever it takes to drive traffic.
Even if that means burning bridges, faking numbers, and wearing his newsroom down to the bone.
Eugene S. Robinson is really looking forward to his weekend off.
It's 2012, and he's basically been living at Aussie's sad, beige office and mountain view, California.
Eugene was Aussie media's first hire.
And as the deputy editor, he's been working 18 hours a day, seven days a week in preparation for the website's launch.
Eugene is a tall black man with a thin mustache and a gray streak in his hair.
Like his boss, Carlos, Eugene went to Stanford and is the perfect blend of media meets Silicon Valley.
He gets the whole move fast and break things attitude, but he's also skeptical of Carlos's vision.
Later, in an op-ed for The New York Times, Eugene claims that he told Carlos,
quote, I think you might be a visionary.
That is, seeing things that are not there.
That is the worst thing you can say to a guy like Carlos.
I love Eugene right now.
We love Eugene.
Eugene's pulling up as a hero.
But Carlos's ambition for Aussie makes life hell for the upstart editorial team.
Carlos wants to make sure Aussie is telling stories that other outlets aren't reporting on.
And that sounds reasonable, but in practice, it's nuts.
Carlos says that journalists can't cover topics already reported on by major outlets like the BBC, the New York Times, and the Wall Street Journal.
So there's just not a lot left over.
Carlos and Samir expect the full-time staff of about four writers and two editors to produce 40 magazine quality articles per week.
If he hired the best journalists alive, that is an impossible metric.
Yeah.
That's unreal.
Yeah.
Also, it just shows me fundamentally these two have no idea how journalism works.
Not being able to cover anything that's been mentioned on the biggest sources of news in the English-speaking world.
Like, that's crazy.
As Eugene describes it, the launch prep is so intense that he's had to tell Carlos repeatedly that he's taking this particular weekend off.
According to Eugene, Carlos is livid.
He screams at him, fists pounding on the table and everything.
Carlos is so enraged that he reportedly fires Eugene on the spot.
And when Eugene later writes about this time at Ozzy for all to journal, he says that a representative for Watson disputed the events surrounding Eugene's initial exit from the company.
He added that the representative did not answer any questions.
After a few weeks, the board chair convinces Carlos to rehire Eugene, and then she convinces Eugene to come back.
But even with Eugene back at Ozzy, the writers on staff are drowning in work.
And it doesn't slow down after the site launches.
Ozzy staffers later recount regularly working from 7.30am to 1am each day, writing articles, producing video series, and making podcasts.
As the site flounders, Carlos's expectations remain sky high to the detriment of everyone around him.
In an essay about Ozzy published years later, Eugene describes him as a quote, holy terror.
Sarah, can you read this excerpt from Eugene's piece?
Yeah, he goes, text and calls from him came whenever he was in the mood to send them.
The work week was a seven day a week death march, screaming, shrieking, threats of firing, and the actual docking of pay for unwritten interactions were normal.
We were told that if a friend was getting married or had died, send flowers.
Passion was a number one qualifier since the thinking went.
People who are passionate about something will work 24 hours a day.
Of course, this is a very extreme example of this kind of mentality, but it's not uncommon when you work in digital media, especially if it's kind of start up-ish in that sense, where it's kind of like,
we believe in this, that we're a family, this is everything, and it's like those lies that kind of feed to you,
and you're not getting any extra money out of it, they're the ones getting money from investors,
but they expect you to care about it like you also gave birth to this platform.
But even after big fundraising rounds, Ozzy doesn't hire more people for its newsroom.
Instead, they spend money on advertising, and it doesn't seem to pay off.
Because after all this time and all this money, Ozzy has still failed to create an audience for its work.
Sarah, as someone working in digital media at the time, did you ever organically come across Ozzy stories online?
I honestly think there was maybe one or two that people were sharing, but I don't ever remember clicking through to Ozzy.com.
And in fact, I think the joke was everyone was like, what the hell is Ozzy?
Yeah, they've barely even started publishing, and they've already spent $35 million.
But like so many digital media startups at the time, the site isn't anywhere near profitable.
And so now Carlos needs to figure out how to make money and fast.
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Hello, I'm Matt Ford.
And I'm Alice Levine.
And we're the hosts of British scandal.
Now, Britain loves a royal scandal.
Abdications, affairs, dodgy uncles, we've had a lot.
But this series is about two brothers.
Raised in palaces found by tragedy, supposed to be inseparable.
So, how did they end up barely speaking?
Was it jealousy, the press, the firm?
Or was this royal rift always inevitable?
This is the story of Harry and Wales and the scandal that split the House of Windsor.
Follow British scandal wherever you get your podcasts, or listen early and at-free on Older Bull.
For years, the Aussie website trudges along.
And while it has occasional successes, it struggles to gain traction.
It turns out when reporters can only write about things no one's ever heard of,
there aren't a ton of people interested.
Companies usually charge for ads based on the number of people they think are going to see them.
And online, the way to measure viewers is with clicks, like that onion headline says.
We don't make any money if you don't click the link.
Aussie isn't making any money, but neither is anyone else.
Investors and founders behind the digital media boom made a bet that selling ads based on clicks
would be a sustainable business model.
But by the mid-2010s, it's become clear that the model just isn't profitable.
Or at least, it's not profitable enough for investors.
And the industry is a mess.
Carlos might think of himself as a unique visionary, but he tries the same strategies
that so many other digital media companies do.
First up, branded content.
JP Morgan Chase, Amazon, and Visa give Aussie a bunch of money to run sponsored posts,
all on the condition that they get a certain number of page views.
And Aussie delivers, but not by making stuff that people actually read.
Instead, they use a janky third-party service to turn JP Morgan articles into glorified pop-up ads.
They appear before readers get rerouted to the article they actually clicked on.
Sneaking these ads in front of readers is basically juicing the stats.
No one is actually reading the branded content that they've been selling.
Aussie might not technically be lying to their advertisers, but they're definitely misleading them.
And they're not the only startup media company doing it.
Among others, bustle digital group, funnier die, and PC mag are doing the same pop-up scam.
Eventually, Buzzfeed News runs a story outing them all.
It says that over a five-month period, Aussie got the vast majority of views on its most red articles fraudulently.
The company gets some negative attention, but eventually, the internet moves on.
Even JP Morgan keeps investing with Aussie.
For now, Carlos is acting about a shady as everyone else in his position.
But when Aussie loses its most powerful ally, he'll get desperate.
And that's where the real scam begins.
In addition to branded content, Aussie also tries branching out into events
as a way to make money and get attention.
In July 2016, the company throws their first ever Aussie Fest.
It has a sort of TED Talks vibe with flashier names, like Issa Rae, Cory Booker, and Malcolm Gladwell.
But it's not the smash hit that Carlos envisioned.
Only 2000 people show up.
The venue, Central Park's Rumsy Playfield, is mostly empty.
And still, they throw Aussie Fest again in 2017 and in 2018.
Somehow getting massive names like Hillary Clinton, RuPaul, and Talib Kuali.
Sarah, I need you to read how Carlos describes the 2018 event to the New York Daily News.
Oh, God. He says,
The whole mission of the festival is to bring diverse voices to one stage
and expose people to unexpected perspectives.
In years past, people who purchased a ticket to see Jason Derulo have been totally wowed by Jeb Bush.
That went somewhere I was not expecting.
I don't know what the average Jason Derulo fan is like.
But something tells me they aren't like, whoa, this Jeb Bush guy.
He's kind of like Jason.
I'm wowed by him. I see the connection here.
My eyes are open because I would have never been exposed to this man otherwise.
Also, I do remember the randomness of Aussie Fest.
Yeah.
Big time because I remember seeing the posters and being like, what the hell is this?
Well, Aussie Fest isn't exactly beloved in the rest of the media landscape either.
Rolling Stone calls it a neoliberal nightmare.
And there's another issue for Carlos.
In 2017, Sharon Osborne sues Aussie media for trademark infringement.
She thinks Aussie Fest sounds too much like Auss Fest.
The music festival she created with her husband, Aussie Osborne.
They eventually settle, but the lawsuit is embarrassing.
So Carlos works hard to smooth things over.
And he even claims on CNBC.
Fun fact, our friend, Aussie and Sharon sued us briefly.
And then we decided to be friends and now they're investors at Aussie.
There's just one problem with that.
Sharon says this is a complete lie.
She vehemently denies investing in Aussie and she says that she rejected company shares
that Carlos offered as a part of a potential settlement.
And then he gets dealt another major blow.
The Emerson Collective knows that Aussie isn't making money.
They try to get Carlos to sell the company
or at least make new funding dependent on hitting performance targets.
And it doesn't work.
So around 2019, they bow out.
Carlos' longtime friend, Lorine, leaves the board as well.
And it gets personal.
Remember the annual Christmas party that Aussie hosted with Emerson?
Well, they cut Aussie out.
Carlos is replaced by celebrity chef Jose Andres.
Well, this seems to be a breaking point for Carlos.
He hasn't just lost a friend.
He's also lost Aussie's greatest source of legitimacy.
With his biggest backer gone and a business model that's failing,
Carlos finds the easiest way to keep Aussie afloat is more lying.
He spends most of 2019 traveling the world to woo investors.
And instead of admitting that Aussie isn't doing well,
straight up lies about how much money the company has made in the last two years,
exaggerating by several million dollars.
He later tells an investor that a big tech company has offered to buy Aussie
for $600 million.
Okay, Carlos.
Like, $600 million for a website that barely exists.
This man is crazy.
Yeah, I mean, it's all bullshit.
But it makes Aussie look like a more enticing investment,
including to companies like Buzzfeed.
At one point, they're reportedly in talks to acquire Aussie.
And who knows if any of it was real or if it was just deployed a boost Aussie's value.
I, as a former Buzzfeed employee, have no comment.
Either way, the deal doesn't go through,
but it does help bolster the image that Carlos is trying to create.
And it makes the company more attractive to potential backers.
According to the SEC, all the hype helps Aussie defraud investors
out of $50 million.
He uses that money to expand Aussie Fest.
He moves it to Central Park's Great Lawn,
aiming to bring in 100,000 people.
They have a bigger lineup than ever, including Mark Cuban,
Spike Lee, Trevor Noah, A. Rod, and Stacey Abrams.
And here's a mini scam for you.
One former employee told Forbes that Aussie would book big name speakers
by telling them other celebrities would also be there.
They would later claim those people had dropped out,
even though they never agreed to be in the festival in the first place.
Carlos tells CNBC's Squawk Box that people describe Aussie Fest as
Ted meets Coachella.
It turns out he's just quoting himself here,
which is one of his go-to media strategies.
He's literally doing the many people are saying things
when, in fact, the many people are just him.
He is many people.
I mean, you gotta hand it to Carlos.
He knows how celebrities work, which is...
Yes.
Wait, this person is doing it? Well, I'm gonna do it too.
Meanwhile, like, have you heard of Aussie?
Go on the website. Look it up. It's not legitimate.
I mean, I don't want to go to any of those events,
so that feels right to me.
Aussie also goes hard on advertising.
They run an estimated $2 million worth of ads across New York City.
In one ad, they use a photo of the crowd at Global Citizens Festival
implying it was taken at Aussie Fest.
And Aussie spokesperson later apologizes, calling this a mistake.
In total, Aussie is projected to spend
at least $6 million on this event.
That's way more than they're likely to make on it.
But then, Aussie gets a miracle.
There's a crazy heat wave in New York.
Temperatures in the triple digits.
Mayor Bill de Blasio cancels the event.
And Aussie gets to file an insurance claim.
They can blame their losses on the mayor
and the weather rather than their own incompetence.
Carlos is saved by an almost literal act of God.
But he can't count on that to happen a second time.
He's going to have to make his own luck.
It's late December 2019,
just a few months after the would-be catastrophic Aussie Fest.
Aussie media has a new CFO, Tripti Thakur,
and she gets these seed on an email
from Samir to a major bank.
This email includes documents related to Aussie's loan application.
So, remember how Carlos has been lying about Aussie's profits
to get more investments?
Well, he's made $50 million that way,
but it's still not enough.
Aussie is burning through cash,
which they seem to be mostly spending
to boost Carlos' profile.
Aussie produces documentaries, podcasts,
and movies with the Oprah Winfrey Network,
PBS, BBC, and even Lifetime.
But most of these are hosted by
or centred on Carlos in some way.
They don't seem to be helping the business,
and that's why Aussie is going to the bank for a loan.
When Tripti reads the email,
she sees a contract with a major cable news network.
It's for the second season of an Aussie TV show,
complete with an episode order,
a production budget,
and signatures from bigwig executives.
The contract looks legit,
and it implies that there's guaranteed money coming to Aussie.
But Tripti knows that Aussie
is still actively negotiating with the network.
This contract is fully made up.
Carlos has gone from artificially inflating
page views to fudging revenue.
So why not just manufacture a contract
out of whole cloth?
You know, it's very often in these stories
that there's a woman who comes in for a job,
and she's like,
read something that's readily available,
and it's the only person to be like,
wait a second.
Yeah, man.
It just takes one smart broad
to figure these things out.
This is like a pattern in these stories.
I know.
Tripti resigns effective immediately.
Sarah, I want you to read her email to Carlos.
She writes,
this is fraud.
This is forging someone's signature
with the intent of getting an advance
from a publicly traded bank
to be crystal clear
what you see as a measured risk,
I see as a felony.
Did either of you have any idea
or did it even occur to you to care
that I could go to jail for forgery and bank fraud?
I mean, this is like the most polite way
to be like,
what the hell is going on here?
Like what mess did you get me into?
Yeah.
Well, Carlos is used to steamrolling
his younger employees,
but one of them has finally pushed back.
And yet, he ignores her warnings.
Carlos has repeated his lies so many times
that it's possible he actually believes them.
But the illusion of Ozzy in his mind
is about to collide with reality.
And the rest of the world will look on his works
and despair.
Despite trip these stern email,
Carlos is desperate to keep Ozzy
from ending up in the digital media graveyard.
So the company makes another pivot,
possibly to what Carlos wanted
to be doing all along.
In 2020, Ozzy launches
the Carlos Watson show.
It's an interview series hosted by Carlos
that runs exclusively on YouTube.
To be clear, the show is not a YouTube original,
meaning it's not produced by YouTube's in-house studio.
It's just uploaded to YouTube.
Carlos manages to get some powerful guests on the show,
like Matthew McConaughey and Eva Duverne.
According to The New York Times,
the show's Booker tells them it will air on A&E.
Many of the show's producers and writers
are also told that,
but an A&E spokesperson says
that the network never agreed to air the show.
Ozzy plunges money into marketing the series,
and the ads are riddled with misleading quotes.
Remember what I said about Carlos doing the
many people are saying thing?
In a promo video for the Carlos Watson show,
Ozzy says that the LA Times describes it as,
quote, what true discussions look like?
A New York bus ad calls Carlos Anderson Cooper meets Oprah.
But both of these quotes are
from a piece of branded content that Ozzy paid for.
It's just Ozzy quoting Ozzy,
and here's another one.
Ozzy also claims that deadline called Carlos,
quote, the best interviewer on TV.
But a critic never said that.
Sameer did in an interview with deadline.
And an Ozzy billboard in LA calls the Carlos Watson show,
quote, Amazon Prime's first talk show.
Ozzy uploaded the show to Amazon to get more views,
like many YouTubers do.
But Amazon played no role in producing or promoting
or paying for the show.
That is so wild, because he said A&E bought the show.
I know.
At this point, you have to wonder
what Carlos thinks about himself.
Like, does he think like, you know,
just one more lie and people will flock to me
in a natural and organic way?
Like, buddy, you've been trying for this song,
it hasn't happened.
Carlos calls his show,
the fastest growing talk show in YouTube history.
But the numbers are bullshit.
So you know how you get ads before YouTube videos
and some of them let you skip through
after 15 seconds or whatever?
Ozzy is paying for full episodes
of the Carlos Watson show to play automatically as ads.
So even if people click out,
the video could still get a view.
One source told Axios that more than 95%
of the Carlos Watson show's viewers
were paid for.
Like many digital media companies,
Ozzy is fresh out of ideas.
They're just running the pop-up scam again.
Carlos reeks of desperation.
And he's about to go from shady to reckless.
And I feel like...
It's February 2021,
and Ozzy media is still desperate for cash.
Carlos thinks his previous scams didn't work
because they didn't go big enough.
So he decides to lie to yet another bank.
And that's how we get to YouTube executive,
Alex Piper's call with Goldman Sachs.
Remember that one, Sarah?
I mean, how could I forget?
But also, who made the call?
Who was Fake Alex?
Well, the Fake Alex was actually Samir.
And he uses a voice distortion app
to pretend to be Alex.
Throughout the call, Samir gets texts from Carlos,
who's hovering behind him.
And he reads them back to the Goldman team.
For example, quote,
I'm a big fan of Carlos, Samir, and the show.
At one point, Samir must have used the word
Wii to refer to Ozzy,
because court documents show that mid-conversation,
he gets a frantic text from Carlos.
And it just says, use the right pronouns.
You are not Ozzy.
This is like something that happens in a cartoon,
like the jumping around and the,
like, you're this person, not this person.
Yeah, it's like a modern, I love Lucy episode.
Oh my god.
Well, when the call ends,
the Goldman analysts are baffled.
They call Alex to follow up.
And well, you know how that goes.
Word of the incident quickly gets
to the Ozzy board of directors.
It is not a good look for Carlos.
But he manages to protect himself
by telling the board that Samir had a mental health crisis.
Like, that's better.
The guy who is also in charge is having a mental episode
where he's pretending to be a person
who exists in order to get more money from,
like, how's that better?
Yeah.
Nothing gets better here.
But the board does seem to accept the story
and the whole thing remains internal,
at least for the time being.
Needless to say, Goldman Sachs does not end up
giving Carlos the $40 million.
Ozzy plows on full steam ahead.
They're cranking out more episodes
of the Carlos Watson show.
They even have another Ozzy Fest plan
for October 2021.
But it never takes place.
Because the New York Times comes calling.
They're about to publish a major story on Ozzy.
And would Carlos care to comment?
The story runs on September 26, 2021.
It centers on the fake Goldman Sachs call.
It centers on the fake Goldman Sachs call.
But also touches on Ozzy media scams more broadly.
Eugene, Ozzy's first hire,
is quoted as calling the company
a Potemkin Village,
implying the entire thing was a facade
designed to trick people in power.
The article is written by Ben Smith.
The New York Times is media columnist.
Carlos comes back swinging on Twitter,
labeling the piece a hit job
and calling out what he alleges
is a conflict of interest.
He used to be the editor-in-chief of Buzzfeed News,
and was reportedly involved in the Buzzfeed
Ozzy negotiation back in 2019.
But the New York Times article
opens up the floodgates.
Everyone in media seemed to think that Ozzy
was a total scam.
And now their gossip has been confirmed.
Forbes, New York Magazine,
The Daily Beast, and many more
published their own reporting,
covering every aspect of the Ozzy scam.
The Fallout is Swift.
One of Ozzy's newest hires,
a former BBC journalist,
resigns.
A&E cancels a second half
of an Ozzy-produced documentary
it was actually planning to air.
CNBC even calls up Sharon Osborne for comment.
Sarah, can you read what she tells them about Carlos?
Yeah, she says,
this guy's the biggest chicer
I've ever seen in my life.
Within a week, Carlos announces Ozzy is shutting down.
But then, psych!
Four days later,
Carlos goes on the today's show with an announcement.
We're open for business, so we're making news today.
This is our last-verse moment,
if you will. This is our Tylenol moment.
What the hell is a Tylenol moment?
I also don't really know what that means.
This guy has a whole world in his mind.
I never want to understand.
Yeah, we are not on this journey with him.
And despite all this humiliation,
Carlos somehow keeps a stripped-down
bare-bones version of the Ozzy website running.
And despite all the fraud,
Carlos stays a free man.
But he's about to hit that final deadline.
On February 23rd,
2023, the FBI arrests Carlos
at a hotel in Midtown Manhattan.
He's charged with multiple counts of fraud
and with aggravated identity theft.
That's for ordering Samir to impersonate
Alex Piper during the Golden Call.
He faces up to 37 years in prison.
In a statement,
he says that Carlos, quote,
ran Ozzy as a criminal organization
rather than as a reputable media company.
Carlos posts a million-dollar bail
after pleading not guilty.
Samir, meanwhile,
has pled guilty to fraud and identity theft.
Some suspect he might testify against Carlos,
whose trial has been set for May 2024.
But Carlos is determined to fight his case.
He takes to Instagram to defend himself.
Sarah, can you read this caption for me?
Yeah, he says, I'm deeply disappointed
by the government's actions yesterday.
I'm not now and have never been a conman.
I am and have been a hard-working entrepreneur
who has helped build a special company from scratch.
Okay, just because you build a company
doesn't mean you're not a conman
because the company legally existed.
Well, Sarah, it seems like Carlos
might finally be cornered.
His show's YouTube channel stops publishing new content
and Ozzy.com finally shuts down in March 2023.
Honestly, it's a better run than I would have expected.
Sarah, did this upset you
as much as I was hoping and praying it would?
Yeah, I mean,
there's something so fascinating about this story
because Carlos clearly
idealized these websites
that were started from the, quote, unquote,
unquote, ground up by, quote, unquote, regular people.
And he wanted the same thing.
He wanted the BuzzFeed experience,
the vice experience of being like,
we started off so small and then look what we became.
I think he just got really lost
in this pursuit of creating a media company
and the scam went too far
into criminal territory
in a ways that others didn't.
It's so fascinating to think about it that way.
He could have gotten away with this
if he had just done, like,
too few or crazy things.
And if the website had been a little bit more successful.
Yes.
But a lot of the stuff Carlos was doing,
a lot of the stuff that Ozzy was implementing
is still very present in digital media.
Also, it was really upsetting to see how
these people kind of just do whatever they want
and what happens to people like us
like just doesn't matter at all.
I'm remembering the pivot to video
era of layoffs, which was, you know,
almost 10 years ago now,
where people were laying off writers in favor
of video content which they said was doing better
because of Facebook.
And then it came out that Facebook inflated these numbers
of views for video.
Like, you know, like, there's just so many things
these companies do
that doesn't really mean anything time at the end of the day.
They move on so quickly
and the people who actually face the consequences
are the people creating the content,
you know, the writers and the producers
and the people who are slaving away
for $40,000 of a year hoping that,
you know, maybe we'll get a raise next year.
That's why it wasn't surprised even that Eugene
went back after everything he had seen
because he needs money.
I think the real question is
what is Carlos going to start next?
Either when he's acquitted
or when he pleads out or when he gets out of jail
because I don't feel like he's done with us.
Yeah, I would say so too.
I mean, it's easy to hear this and think like,
there's no way someone can come back
from this level of fraud
and, you know, these lies and everything,
but it really does happen every single day.
Sarah, I think I speak for both of us when I say
we're really excited
for the day that we get onboarded
at Carlos's next venture.
If I was desperate enough,
I wouldn't say I wouldn't work for Carlos.
I'm sorry, Sarah, I wasn't being sarcastic.
I'm being sincere.
There's a decent chance
that you will not end up working
with or for some of the individuals
we made fun of today.
I think the lesson here is that
any website you're reading right now,
they're doing something
kind of like this, maybe.
But not us.
But not us.
Follow scamplencers on the Audible app
or wherever you get your podcasts.
You can listen to all episodes of
scamplencers ad-free by joining Audible.
This is Aussie Media, Pivot to Fraud.
I'm Sachi Cole.
And I'm Sarah Hagi.
If you have a tip for us on a story
that you think we should cover,
please email us at scamplencersatwondery.com.
We use many sources in our research.
A few that were particularly helpful
were Goldman Sachs, Aussie Media,
and a $40 million conference
called Gone Wrong by Ben Smith for The New York Times.
How Aussie Fest was about to become
the next Fire Fest by Jamima McAvoy
and David Jeans for Forbes,
and Aussie Onward by Eugene S. Robinson for Alta.
Grace Perry wrote this episode,
additional writing by us,
Sachi Cole and Sarah Hagi.
Our senior producer is Jen Swan.
Our producer is John Reed.
Our associate producers are Charlotte Miller and Lexi Peary.
Our story editor and producer is Sarah Annie.
Eric Thurm is our story editor.
Sound Design is by Sam Eda.
Fact checking by Will Tathlin.
Additional audio assistance provided by Adrian Tapia.
Our music supervisor is Scott Velasquez for Freeze On Sing.
Our coordinating producer is Desi Blaylock.
Our managing producer is Matt Gantt
and our senior managing producer is Ryan Lourd.
Kate Young and Olivia Rechard are our series producers.
Our senior story editor is Rachel B. Doyle.
Our senior producer is Ginny Bloom.
Our executive producers are Janine Cornelow, Stephanie Jens,
Jenny Lauer Beckman, and Marshall Louis for Wendry.
