Ozy Media employees didn’t get $5.7 million in PPP loans: ex-staffers

Several former employees of Ozy Media say there is no evidence that the millions of dollars the company received through a federal Covid relief program to protect paychecks ever went to save jobs or boost pay.

Ozy, which has come under scrutiny after numerous reports detailing questionable business tactics, applied for two loans through a program called the Paycheck Protection Program, or PPP, according to the Small Business Administration’s website.

Ozy’s first loan, for $3.75 million, was approved in April 2020, a month after the U.S. government passed a $2 trillion coronavirus relief bill. The company was approved for another $2 million in February 2021.

It is unclear how Ozy used the PPP funds. Ozy Media’s co-founder and CEO, Carlos Watson, did not return multiple emails with specific questions about how the company used the money or who decided how the money would be used. Nor did he answer a question about why Ozy applied for the second loan. The company claimed it had $50 million in revenue in 2020. It laid off several staffers and cut salaries earlier that year.

Ozy announced it was shutting its doors last week after a series of reports cast doubt on the company’s business practices. The New York Times detailed an event from February — the same month Ozy received its second PPP loan — where co-founder and Chief Operating Officer Samir Rao impersonated a YouTube executive on a conference call with Goldman Sachs in hopes of securing a $40 million investment.

During an interview on the syndicated radio program “The Breakfast Club” on Tuesday, Watson said he has asked Rao to step down, despite claiming the incident stemmed from a “mental health issue.”

While it wasn’t uncommon for media companies to participate in the PPP, Ozy specifically earmarked its loans for payroll. Full-time employees who worked for Ozy told CNBC that they had no idea where the money went and that it didn’t go to restoring their salaries after they took pay cuts.

“No one to my knowledge, and I’m talking to at least 10 people. No one had anything returned to them by way of salary post them receiving these PPP loans,” according to a former employee who left Ozy earlier this year.

“I must’ve followed up with Samir [Rao] four to six times,” said another with respect to reinstating salary. “It was disheartening. You work so hard and give your life to this company, to be dismissed and disrespected.” 

The former Ozy employees who talked to CNBC worked in various departments across the company. They spoke on the condition of anonymity to discuss private matters and in order to avoid retribution.

Watson told Axios in January 2021 — one month before taking the second PPP loan — that his company was profitable for the first time in 2020 after taking in $50 million in revenue. The Times first reported Ozy has inflated…