Fyre Festival co-founder arrested on wire fraud charges

Wealthy millennials expecting to attend a week-long luxury concert event in the Bahamas in late April were met with a huge disappointment. The Fyre Festival was being billed as “the cultural experience of the decade” by celebrities such as Bella Hadid, Amanda Reilly and Kendall Jenner.

When the guests arrived, they instead found sparse accommodations and learned that all of the bands had dropped out; some the night before.

Co-founder Billy McFarland was arrested on Friday by federal agents at his Manhattan home and charged with one count of wire fraud involving the 25-year-old entrepreneur’s scheme to defraud investors.

Joon H. Kim, the acting United States attorney for the Southern District of New York, said in a statement: “McFarland allegedly presented fake documents to induce investors to put over a million dollars into his company and the fiasco called the Fyre Festival.” McFarland could face a maximum of 20 years in prison if he’s convicted.

Rapper Ja Rule, a.k.a. Jeffrey Atkins, co-founder of the Fyre Festival scheme, is also in hot water as the duo faces more than a dozen lawsuits and McFarland is being accused of claiming fictitious financial information on documents given to prospective investors. However, according to his attorney, Stacey Richman, Ja Rule, “Mr. Atkins is not under arrest and we don’t perceive him to be a subject of this investigation.”

Supposed to take place on the weekends of April 28 and May 5, Fyre Festival was set up like a refugee camp on the remote island of Fyre Cay in the Bahamas’ Exumas islands. Concert-goers who paid thousands and expected the pinnacle of luxury were instead treated to warm drinks, cold cheese sandwiches and told to wait while organizers struggled to prepare accommodations in domed white tents.

The disgruntled crowd of drunk twenty-somethings soon learned that there would be no concerts after all and took to the Twitterverse to tell the world what had happened.

Most of the criminal complaint, which was unsealed on Friday, shows that the case relies on misrepresentations of financial information to people who invested in McFarland’s company, Fyre Media, and its subsidiary, Fyre Festival LLC. Fyre Media was basically a website that let people book celebrities for special events.

According to the complaint, sworn to by Brandon Racz, a special agent with the F.B.I., “at least two people invested about $1.2 million in the two companies; and in communications with these investors in 2016 and 2017, Mr. McFarland repeatedly overstated Fyre Media’s revenue from bookings and his own wealth.”

McFarland claimed that Fyre Media had earned millions of dollars in the past two years, when it really only took in $57,443. He also misrepresented his stock portfolio, showing investors a fake document that said he owned $2.5 million in shares, when it was really only worth $1,500.

McFarland’s scheme was revealed with the collapse of the Fyre Festival, which was shown on social media and news reports as a complete disaster. The man himself took to the airwaves to explain that a storm had ruined the accommodations just before the concert was scheduled. He also admitted, “We were simply in over our heads,” and offered concert-goers a full refund and free tickets to next year’s event, which will obviously never happen.

If you would like to receive Breaking News text alerts on a smartphone or tablet, download the DML APP which is completely FREE and easy to use. Go to the Google Play Store or the IOS App Store and search for DML APP. Be sure to keep the app’s notifications setting on. Another way to receive alerts is to text to 40404 the following message: follow @realdennislynch (be sure to put a space between the word follow and the @ symbol).

To see more stories like this, sign up below for Dennis Michael Lynch’s email newsletter.







 

Comment via Facebook

Send this to a friend