‘The federal government was weaponized by Amazon,’ Watson says in SEC trial

On the fourth day of his civil fraud trial, Brian Watson put the blame on retail behemoth Amazon.

“The blitzkrieg attack by Amazon included the weaponization of the SEC against me,” Watson told jurors in a downtown courtroom, tying the megacompany’s 6-year-old lawsuit against him to a federal investigation and ongoing U.S. Securities and Exchange Commission trial.

The CEO’s remarks came in response to questions from an SEC attorney about who was to blame for Northstar Commercial Partner’s collapse in 2020. Watson testified for three hours Thursday.

“The damage has been done,” he said, crying. “The federal government was weaponized by Amazon to cut me off at the knees, so I couldn’t defend myself as an American citizen.”

Thursday marked the first time Watson has taken questions and spoken publicly about Amazon’s accusations that he paid kickbacks to that company’s employees in exchange for contracts to build data centers in Northern Virginia, which he has always denied doing.

“They tried to make my life hell so that I couldn’t defend myself against a $1 trillion company,” Watson said, sniffling. “But they forgot something: Sometimes you can take too much from somebody and then they have nothing to lose. I lost my company, my reputation.

“As an American citizen, to be able to sit in a room and answer questions to a jury — I have never been afforded that opportunity until this week,” he said. Watson later added, “I am just so thankful to be in front of a nine-person jury today instead of the federal government.”

Until Thursday, both Watson and the SEC had avoided mention of the Amazon allegations. When a witness began to reference them Monday, that witness was prevented from doing so. When an Amazon software developer appeared in the jury pool that day, he was excused.

Broaching the topic carries risk for Watson because it tells jurors that he faces allegations of unethical business conduct on multiple fronts. But Watson considers the SEC case and a federal criminal investigation that did not result in charges to be inseparable from Amazon’s claims.

“We know that Amazon hired attorneys who then lobbied their cronies at the Department of Justice to investigate me. For four and a half years they investigated me,” he said.

“I used to believe that we were innocent until proven guilty in this country, but what I have learned with the federal government, and the SEC specifically, is that you are not.”

In this week’s trial, which will likely wrap up Friday with closing statements in the morning and a jury verdict in the afternoon, the SEC accuses Watson of three counts of civil securities fraud related to 11 real estate projects from 2017 to 2019 in which he raised roughly $50 million from investors but did not invest 5% of his own money, as investor documents said he would.

The SEC has kept its case simple, focusing on materials stating that Watson would invest 5% and then general ledgers and testimony revealing he did not. Watson, on the other hand, has made the focus far broader, speaking about those 11 deals over two years in the context of the 97 deals that Northstar did over 26 years, to show he nearly always invested at least 5%.

And he has, at every opportunity, spoken about the downfall of Northstar from a 40-employee firm with $400,000 in monthly payroll to one employee and no office. Top executives left in 2020 following an FBI search of Watson’s home, Amazon’s lawsuit and a receivership.

“One of the world’s largest companies came after me and got a receivership order on me. The receiver came in and charged my company $450,000 a month and completely dismantled it and got rid of all of the assets,” Watson said Thursday of the nearly three-year receivership.

For a second day in a row, Watson suggested that the SEC also contributed to a man’s death.