At the heart of the controversy are Judge Komitee’s undisclosed financial ties to the victims central to the case. Google, Goldman Sachs, and JP Morgan Chase were identified by prosecutors as key “victims” of Watson’s fraud, companies in which Komitee held multimillion-dollar investments through hedge funds, including Viking Global, where he previously served as general counsel. Viking and its affiliates have extensive financial relationships with these same entities.
As Watson awaits sentencing, calls are mounting for Judge Komitee’s recusal and for the conviction to be vacated.
US District Judge Eric Komitee denied Carlos Watson’s motion to dismiss his conviction based on his alleged bias as a judge. Watson was convicted of conspiracy to commit securities fraud and wire fraud and aggravated identity theft.
28 U.S. Code § 455 requires federal judges to recuse themselves if their impartiality might reasonably be questioned. Grounds for disqualification include personal bias, financial interests in the case, relationships where the outcome could affect a spouse or close relative, or prior involvement as a lawyer or witness.
The convicted defendant, Watson — facing up to 37 years — alleges that Judge Komitee had a hidden conflict of interest, conducted an inherently unfair trial, and provided incorrect jury instructions.
Judge Komitee said Watson’s motion was “long on innuendo but decidedly short on substance.”
The Charges Against Watson
In 2023, the US Attorney for the Eastern District of New York accused Watson and his California-based news and entertainment company, Ozy Media, of providing false information about Ozy’s finances and audience size, fabricating contracts, and inflating earnings projections for potential investors.
According to the prosecution, Watson’s victims included giant companies such as Goldman Sachs, JP Morgan Chase, Google, and LiveNation.
According to Watson, Judge Komitee has financial interests in all four companies and has previously worked closely with two of them — Goldman Sachs and JP Morgan.
When Judge Komitee presided over Watson’s case, he owned stock valued between $126,000 and $1,100,000 in the four companies alleged to be victims of Watson, according to a financial analysis prepared by Watson’s attorneys based on the judge’s financial disclosures.
Judge Komitee, while declining to specify how much stock he owned in the Watson victim companies, said Watson made “frivolous” allegations that he was financially conflicted from hearing the case because his hedge funds, not himself personally, invested in the companies.
None of the four Watson victims lost money because of Watson, nor did prosecutors allege they lost money. Prosecutors said Watson conspired to victimize the companies and others but did not charge Watson with actually succeeding.
The Cooperators and the Trial
Komitee presided over a six-week trial featuring two former Ozy Media executives who pleaded guilty to the same conspiracy charges and became “cooperators”—agreeing to testify against Watson for leniency in their sentencing.
Cooperators Samir Rao and Suzee Han said Watson directed them to commit their admitted fraudulent activities.
They told jurors they conspired with Watson to hide Ozy Media’s debt, cash reserves, and growth.
Rao and Han initially told the FBI that they had acted without Watson.
Watson’s lawyer had told jurors that his two former Ozy executives acted independently, were having an adulterous affair, and hid from Watson their criminal conspiracy to preserve and increase their positions in the company.
While Rao, Ozy’s former COO, blamed Watson for directing his actions during six days of testimony, Rao admitted to doctoring Ozy’s general ledger, orchestrating a juggling act to manage Ozy’s loans with merchant lenders, fabricating documents, providing fake invoices and UCC termination emails to lenders; forged a contract, registered a phony website, created fake email personas to impersonate various individuals; forged the signature of an Oprah Winfrey partner on a contract and sent the altered contract to Hanmi Bank.
Watson’s defense was that Rao, incentivized by a likely probation sentence in return for his testimony, was lying and that Rao and Han kept their positions by taking shortcuts behind his back, which included the dishonest and illegal methods they employed.
Defense Accusations Against Judge Komitee
Federal records show that cooperators get, on average, more than 50 percent (and often 100 percent) of their federal sentencing guidelines prison terms shaved off provided the defendant they testify against is convicted. Many get probation for committing the same crimes as the person they testified against.
In Watson’s case, the government had little evidence to tie Watson to the conspiracy other than the two cooperators whose trail of crimes was clear based on the documents they forged and their communications.
During the trial, the defense accused Judge Komitee of improperly barring evidence showing Rao acted with Han to keep his position as COO and cofounder status while keeping their crimes hidden from Watson.
On June 7, 2024, Judge Komitee refused to allow the defense to impeach Rao by his prior inconsistent statements to the FBI.
Judge Komitee told defense attorney Sullivan he could not read from the documents where Rao initially said Watson did not know about his crimes.
At first, Rao confessed to his crimes, saying he had a mental breakdown.
Defense attorney Ronald Sullivan alleged that by the judge not allowing the jury to hear how Rao had changed his story after prosecutors offered him cooperator’s status, Judge Komitee crippled the defense.
Active Role by the Judge
Sullivan, risking contempt, told Judge Komitee during the trial that he was acting like a “prosecutor,” not a judge.
He told Judge Komitee that his ruling barring impeachment “governed the entire trial, and all witnesses the defense attempted to impeach with their own FBI interviews or other documents they authored. This scripting of the testimony in this way effectively prevented the defense from impeaching any witness unless the witness himself agreed that he had lied. It has operated as a sweeping violation of the defendants’ rights to confront their accusers per the 5th Amendment of the United States Constitution.”
Throughout the trial, the transcripts show Judge Komitee took on a very active role, interrupting the lawyers by asking questions of witnesses more than 100 times and sustaining his own objections dozens of times.
During the trial, Sullivan filed a letter on the docket telling the judge that he “repeatedly exclaimed ‘sustained’ without any objections being put forward by the government. … The court should not assist the prosecutors in trying the case because of their youth or inexperience…. A fair criminal trial is one in which the defendants have a full opportunity to challenge the government’s evidence and confront the witnesses against them. That cannot happen when the court objects primarily to the questions put forth by the defense. The court has made more than 30 such objections on behalf of the prosecutors despite repeated respectful requests by defense counsel and a formal objection made by Attorney Ronald Sullivan that the court not aid prosecutors in such a biased and blatant way.”
Judge Komitee denied he was biased against Watson or that his conduct was atypical for a judge.
Since the charges were conspiracy to commit securities fraud and conspiracy to commit wire fraud and not the actual crimes of wire fraud and securities fraud, the prosecution did not have to prove any victim lost any money but only that Watson conspired with the two cooperators Rao and Han to defraud them.
Watson has filed a writ of mandamus with the 2nd Circuit Court of Appeals seeking to remove the case from Komitee and put it in the hands of the appellate judges based on the judge’s alleged financial conflicts.
Komitee, a former manager and attorney for Viking Global, became a federal judge in 2019. At that time, he disclosed a net worth of $60 million.
Based on his 2023 financial disclosures, his wealth has increased to approximately $100 million.
Komitee’s duties with Viking Global, where he worked from 2008- 2018, were closely tied to Viking’s two largest partners – Goldman Sachs and J P Morgan Chase, who served as custodians and prime brokers for Viking.
Another Watson victim was at the core of Komitee’s most lucrative wealth-building period before becoming a judge. Viking’s purchase of Google (Alphabet) stock in 2015 was the deal-of-the-year for Komitee and his hedge fund – as his company broke into the top ten hedge funds in the world.
Since he left Viking to become a judge, Komitee has disclosed tens of millions invested in Viking’s and other hedge funds that invest in and with Watson’s alleged victims, Goldman Sachs, JP Morgan, and Google.
In the middle of the Watson trial, Viking, Google, and Goldman Sachs co-invested $180 million in AlphaSense, an AI search engine company.
During the trial, Komitee sat on the board of directors of Viking Global Foundation and controlled its multi-billion investments into Viking Global for-profit hedge funds, which might have included a personal or foundation role in the new partnership with the Watson victims Google and Goldman Sachs.
The public will not know whether he or the foundation he directs gained from the AlphaSense deal until he files his 2024 financial disclosures in 2025.
Komitee was two months late filing his 2022 filings and four months late filing his 2023 financial disclosures.
The 2023 disclosures were due in May, just before the Watson trial. Komitee filed his two months after the trial ended.
Recusal in Another Case
Judges are required to recuse themselves when they have a financial interest in a case or have close relationships with the parties or victims by statute and under the Judicial Code of Conduct.
The 2nd U.S. Circuit Court of Appeals in Manhattan threw out the dismissal of an antitrust lawsuit last summer. The 2nd Circuit said the trial judge, Judge Lewis Liman, should have been recused from the case because his wife had $15,000 in stock ownership in Bank America, one of the defendants, which created an “appearance of impropriety.”
While Liman’s wife had $15,000 in a defendant’s stock, Judge Komitee sometimes had more than $1 million.
Sentencing
Judge Komitee set sentencing for Watson for December 13. Prosecutors stated Watson could face 24 to 29 years under federal sentencing guidelines.
Last week, Komitee refused Watson’s request to delay sentencing to allow the 2nd Circuit to decide on his writ of mandamus emergency appeal for relief.
Komitee said his investments fell in a “safe harbor” covering mutual or common investment funds invested in diverse collections of stocks because he did not direct the hedge fund to invest in the stocks of the Watson victims but only benefited from the investments.
Komitee did not address his past associations with the victims, which contributed significantly to his current status as one of, if not the wealthiest, judges in America.
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