Fyre Festival organizer arrested for fraud
Billy McFarland, one of the founders of the disastrous Fyre Festival, was arrested at his Manhattan home and changed with wire fraud on Friday (6/30). April’s Fyre Festival, you’ll recall, was billed as a luxury music festival on a private island with models and gourmet food and accommodations, but collapsed into chaos as attendees arrived to find no staff or security and disaster relief tents instead of the promised cabanas, among other issues. Lawsuits are pending against the festival, seeking millions in damages for “alleged fraud, breach of contract, breach of covenant of good faith and negligent misrepresentation.” Friday’s arrest of McFarland, however, comes before those lawsuits are even addressed. Gothamist writes:
Billy McFarland, the 25-year-old behind Fyre Festival, has been arrested and charged with wire fraud “in connection with a scheme to defraud investors” in his company, Fyre Media LLC. The arrest and charges were made in Manhattan on Friday, and McFarland “is expected to be presented before U.S. Magistrate Judge Kevin N. Fox” on Saturday, per the U.S. Attorney’s Office.
Acting Manhattan U.S. Attorney Joon Kim said, “McFarland promised a ‘life changing’ music festival but in actuality delivered a disaster. McFarland allegedly presented fake documents to induce investors to put over a million dollars into his company and the fiasco called the Fyre Festival. Thanks to the investigative efforts of the FBI, McFarland will now have to answer for his crimes.”
The FBI’s William F. Sweeney Jr. added: “McFarland truly put on a show, misrepresenting the financial status of his businesses in order to rake in lucrative investment deals. In the end, the very public failure of the Fyre Festival signaled that something just wasn’t right…”
NY Times details the contents of the criminal complaint against McFarland:
A criminal complaint unsealed on Friday detailed the case, which relies heavily on misrepresentations of financial information to people who invested in Fyre Media — whose main business was a website that let people book celebrities for special events — and a subsidiary, Fyre Festival LLC.
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.
He said Fyre Media had earned millions of dollars from thousands of bookings this year and last. But in reality, the complaint said, his company had taken in only $57,443.
And in one communication with an investor, Mr. McFarland supplied a Scottrade statement that he had altered to inflate his ownership of a particular company’s stock. According to the complaint, the fake document showed that Mr. McFarland owned $2.5 million in shares, when in reality his position was worth $1,500.
Ja Rule, McFarland’s Fyre Festival partner, is not currently under arrest.