Frank Parlato
Watson’s Conviction and Motion for Judge’s Disqualification
Ozy Media founder Carlos Watson may not be going to prison after all.
The federal judge who presided over his trial for securities and wire fraud conspiracy and identity theft and who scheduled Watson’s sentencing in December, may have to remove himself from the case for an unprecedented appearance of a conflict of interest.
Watson, 55, who was convicted on all three financial fraud counts, faces a maximum sentence of 37 years, with federal sentencing guidelines ranging from 24 to 29 years, according to prosecutors.
Watson’s attorney, Andrew J. Frisch, a former federal prosecutor, in a motion filed in federal court on Friday, made the shocking allegation that Judge Eric R. Komitee had significant investments through hedge funds in all three of Watson’s primary alleged corporate victims – Goldman Sachs, J P Morgan Chase, and Google.
Watson’s motion demands Judge Komitee disqualify himself, vacate the conviction, and dismiss the original indictment against Watson.
Jury Conviction and Unreported Financial Conflicts
In July, a Brooklyn jury convicted Watson for conspiring to defraud Goldman Sachs and JP Morgan Chase by falsely claiming Google and Live Nation were his Ozy Media company sponsors.
Through four hedge funds managed by three asset management companies, Judge Komitee had active investments in all four of these Watson’s alleged victim companies, something the judge did not disclose during the trial.
Komitee, one of, if not the wealthiest federal judges in America, has millions invested in hedge funds, which invest in Watson-victims Google, JP Morgan, and Goldman Sachs and other companies.
Komitee began investing in the Watson victims’ stock through hedge funds before becoming a judge in 2018, during the time he worked as general counsel for Viking, one of the largest hedge funds in the world.
Post-Trial Financial Disclosure and Scrutiny
It was not until after the trial – on October 2, 2024 – when Judge Komitee’s required annual financial disclosure for 2023 became available to the public. This prompted scrutiny into motives for what Watson’s trial attorney, Ronald Sullivan, called the most biased judge and unfair trial he had ever witnessed in more than 30 years of trial practice and decades as a Harvard law professor.
The 2023 financial disclosure reveals that Judge Komitee, through hedge fund accounts worth more than $16 million, had money invested in the companies singled out by the US Attorney for the EDNY as Watson’s primary victims.
The CETA-required federal judge financial disclosure allows considerable latitude in judge’s disclosures once they reach the multi-millionaire investment class.
Judge Komitee’s signed and certified 2023 disclosure shows he has between $6 and $30 million invested in hedge funds managed by Viking Global Investors, $5 – $25 million in D1 Capital Partners, and $5 to $25 million in Junto Capital Partners LP.
Judge Komitee’s Background and Hedge Fund Ties
Before becoming a judge, Komitee was Viking’s general counsel from 2008 until 2018 and worked closely with the CEOs of his other two hedge funds – Junto and DI, both former Viking executives.
During his tenure at Viking, Komitee managed contractual relationships with Goldman Sachs and J P Morgan, who have provided critical services as custodian of assets and prime broker, making these two giant financial institutions virtual partners with Viking.
As top legal counsel, and a former securities fraud federal prosecutor, Komitee navigated the contractual relationships and, in turn, made millions from Viking’s relationship with Watson victims J P Morgan and Goldman Sachs. Komitee reaped multimillion-dollar windfalls in 2015 and 2016 when his company invested heavily in Google stock. According to published reports, its rise offset other poorer-performing investments in late 2015 and catapulted Viking into the top tier of hedge funds by Google’s continued strong performance in 2016.
During that same period, Komitee earned more than $10 million in compensation from Viking, not to mention the value of his growing portfolio.
Judge’s Wealth and Testimonies in Trial
When Komitee left Viking to become a federal judge, he disclosed a net worth of almost $60 million. Much, if not most, of that wealth came from his relationships with Goldman Sachs, Google, and JP Morgan Chase – the big three victims in the Watsonn case.
During the Watson trial, Goldman Sachs and Google representatives testified against Watson, including the surprise and undoubtedly jury-impressing appearance of Google CEO Sundar Pichai.
Also testifying were Donald Harrison, President of Google’s Global Partnerships, Alex Piper, Google subsidiary YouTube’s former Head of Unscripted Content, and Goldman Sachs’ Hillel Moerman and Allison Ross.
Lack of Disclosure During Trial and Financial Implications
As each testified against Watson, Komitee, presiding, ruling on objections, and making other judicial determinations, did not disclose his financial interest in their companies through his hedge funds in what is called an “allocable beneficial ownership interest.”
He also did not disclose his extensive history with the companies.
Because the judge and hedge funds themselves do not reveal the extent of leveraging – the process of borrowing to make larger investments into a stock, Komitee’s actual financial interest in the Watson victims during the trial is hard to calculate. Watson’s attorney attached a detailed financial analysis with his motion to disqualify and dismiss the case.
Komitee’s Investments and Potential Impact on Case
According to the analysis, Komitee had investments in the Watson victims, which changed in value based on frequent trading, as is common in hedge funds. but is likely to have averaged more than $1 million during the pendency of the case.
What is the chance that either the judge or the US Court of Appeals for the 2nd Circuit will dismiss Watson’s case?
During Watson’s trial, the 2nd Circuit threw out the dismissal of an antitrust lawsuit accusing 10 large banks of overcharging investors by billions of dollars of corporate bonds for much less cause than what is alleged against Judge Komitee in the Watson case.
The 2nd Circuit ruled the trial judge should have recused himself, because his wife owned $15,000 in stock in one of the banks named in the lawsuit.
The 2nd Circuit said that while US District Judge Lewis Liman “almost certainly unknowingly” had a conflict of interest, his partiality could be questioned because his wife’s ownership of Bank of America stock created an “appearance of impropriety.”
As it often does, the Frank Report has broken an important news story. This one, we predict, will soon be a national news story with important consequences on judicial conduct, quite possibly leading to Watson’s conviction’s dismissal. Since this is a breaking news story, the Frank Report will delve deeper into the case and provide a wealth of additional extraordinary details never before published. As I previously disclosed I began my investigation into this case based on being retained by a documentary filmmaker’s interest in getting the true facts behind this remarkable prosecution of Carlos Watson.
Stay tuned. This story has only just begun.
Previous reports on the Watson case:
Wealthy Judge, Familiar Faces: How the Carlos Watson Trial May Have Been Pre-Determined
Was Carlos Watson the Mastermind or a Victim of Lies? How Cooperation Deals Shaped the Verdict
Samir Rao’s Transformation: From Culprit to Cooperating Witness in Ozy Media Scandal
Frank Parlato is an investigative journalist, media strategist, publisher, and legal consultant.
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Another corrupt hit job with a case so weak they needed a judge with personal interest to bring an innocent black man down. They’ll use Rao the Indian and the female Asian to get around appearing racist. 😂
What happens to Rao in this situation? Is his get out of jail free card rescinded? He did get them their conviction but a prosecutors word means little…
When Frankreport investigates, there’s reason to worry. Thankful Watson will be freed or at least given a new trial where none of this will hold up.
https://www.instagram.com/reel/DBp9YRBuDFX/?igsh=cDVmdmx3bDM1dmh1
This is another sad sad story. Can someone help this child and her mother? The sexual abuse is horrible 😫
It’s America. Courts breakdown families. Dcf is a child trafficking agency. The public needs to wake up and care about more than themselves. Thank you for posting. Until people demand it be in the spotlight the abuse to parents and children will continue.
Our media is to blame. They have the power to report and they don’t. The mainstream media is night and paid for. These are the people we should be going after. Those who turn a blind eye for outrageous salaries.
Thank you frankreport and others who take risks to expose the truth everyday.
This judge would be smart to immediately recuse and dismiss. The longer he messes around with this the bigger it will get.
He may be removed from the bench. It would be a lot smarter for him to admit error. It is stupid to wait for the appellate court to do so.
Typical judge these days in North America. They believe they are above any law.
I just want to say to everybody who may believe the false rumors that Frank may be a closeted homo —- that is NOT true.
Frank is a fine man. Frank is a manly man.
I will debate anybody who disagrees with me on this.
Frank has NEVER developed an affinity for tube steak. Frank would NEVER consume a pork sword.
Instead… Frank has developed an affinity for fine Italian delectables.
But, over the past year, I’ve heard rumors that Frank has likely been gaining weight recently.
About a year ago, Frank was still in good shape (based on photos).
But… I fear that ‘IF’ Frank has begun gaining weight recently, he might eventually look like Alonzo someday.
FYI: Elderly people often use their advancing age as an ‘excuse’ to begin stuffing their faces.
…And make no mistake, Frank has become an elderly man recently. He’s no longer a spring chicken. He’s nearly 70. He’s a modern day dinosaur.
Most elderly people don’t understand just how important their A1C level is (A1C = average blood sugar).
It’s always a good idea to lower your A1C level to attain better health.
I advise Frank to stop eating excessive carbs! A low carb diet is the future of humanity IMO. 🙂
I advise Frank to keep roasting fresh meat on the spit at less than 1000 degrees —- but to STOP eating pasta, rice, fruit, bread, cereal, starchy vegetables, and other unhealthy delectables.
I bid you good day. 🙂