Google C.E.O. Testifies in Ozy Media Founder’s Fraud Trial

Sundar Pichai, the chief executive of Google, said in a New York courtroom on Friday that he never discussed a possible takeover of Ozy Media.

Mr. Pichai is the highest-profile witness to testify so far in the trial of Carlos Watson, the founder of Ozy who is accused of misrepresenting his company’s financial results, funding and audience data to investors and lenders from 2018 to 2021.

The government alleged in court filings and at trial that Mr. Watson falsely claimed to a prospective investor that Ozy had received a $600 million takeover offer from Google. (While the indictment omitted the name of the company, witnesses and documents presented at trial made it clear that Mr. Watson had referred to the search giant.)

Mr. Pichai said he interviewed Mr. Watson in February 2021 for a full-time role managing Google’s relationships with news publishers. To accept the role, Mr. Watson would have had to step down from Ozy, which Google recognized could harm the digital media start-up, another Google executive testified on Thursday. As part of the hiring discussions, Google considered investing about $25 million in Ozy “to help with the transition,” Mr. Pichai testified when he briefly took the stand.

But Mr. Pichai drew a clear distinction between what Google had actually considered and an outright acquisition of Ozy. He never discussed a possible takeover — and he never floated a $600 million figure, he told a jury on Friday in U.S. District Court in the Eastern District of New York.

Shannon Frison, a defense counsel for Ozy, denied the government’s allegation that Mr. Watson had told an investor about a $600 million takeover offer from Google, calling the claim “unequivocally untrue,” in a statement on Friday.

“He never had such a conversation with Google and never told any person that he did,” Ms. Frison said.

Mr. Watson has pleaded not guilty to all the charges against him. If convicted, he could face up to 37 years in prison.

Mr. Watson, a former MSNBC anchor, started Ozy in 2013, publishing news articles alongside podcast and television productions. Ozy secured commitments from prominent investors at a time when digital publishers, like BuzzFeed and Vice, were raking in billions of dollars based on valuations that largely didn’t pan out.

At the heart of the federal criminal trial is an incident in 2021 in which Mr. Watson’s deputy misled Goldman Sachs employees during a fund-raising call by impersonating a YouTube executive. The revelation of the call precipitated the collapse of Ozy.

Defense attorneys for Mr. Watson and Ozy blamed his deputy, Samir Rao, for the impersonated phone call and for misrepresenting Ozy’s financials to prospective investors. Ms. Frison said in her opening statement in May that Mr. Rao was “incompetent for the role that he was serving.”

Mr. Rao and Suzee Han, a former Ozy chief of staff, pleaded guilty last year to fraud charges.

Mr. Watson’s defense continued to point a finger at Mr. Rao during cross-examinations this week, pressing the prosecution’s witnesses about Mr. Watson’s personal involvement in the alleged illegal conduct.

“Mr. Rao handled all of the financials, the presentations to investors, he was in the background with the numbers,” Ms. Frison said in her opening statement, adding that he “made some crucial mistakes that the government is now pointing out as somehow a conspiracy.”

Lawyers for Mr. Watson also argued that while the founders of BuzzFeed and Vice engaged in the same conduct that Ozy executives did to attract investments, prosecutors have gone after Mr. Watson because he is Black.

Mr. Pichai’s appearance in federal court in Brooklyn followed testimony from Mr. Rao, prospective Ozy investors and several people implicated in the fund-raising call.

Allison Berardo, a former Goldman Sachs employee who was on the receiving end of the misleading call, testified on Thursday that she felt “violated” when she realized the person on the other line was not in fact Alex Piper, the YouTube executive that Mr. Rao was pretending to be.

“I had never experienced anything like this in my life,” Ms. Berardo told the jury.

The allegations against Ozy extend far beyond the call with Goldman Sachs employees. Tripti Thakur, who served as the chief financial officer of Ozy for three months in 2019, took the stand on Thursday to describe an email in which Mr. Rao sent an allegedly fake contract with the Oprah Winfrey Network to a potential bank lender.

Defense lawyers said Mr. Watson was not included on that 2019 email, doubling down on their position that he should not be punished for his former colleague’s conduct.

The trial is expected to run until the end of July.