Federal agents arrested Fyre Festival organizer Billy McFarland last week and charged him with wire fraud. The federal charges arrest came three months after the spectacularly failed music and lifestyle festival left hundreds of paid participants and audience members stranded in the Bahamas.
Federal prosecutors allege that McFarland misled investors, who poured over $1 million into Fyre Media, allegedly after the company misrepresented its revenues.
According to a public statement from Manhattan US Attorney Joon Kim, McFarland misled investors by telling them that Fyre Media was earning millions of dollars from ‘thousands of artist bookings’ in 2016 and 17. In reality, the company only had brought in $60,000 from approximately 60 artist bookings.
McFarland also has been accused of providing a fraudulent brokerage statement to an investor. The document claimed that he owned share of a stock that were worth more than $2.5 million. The shares that were mentioned are actually worth under $1500.
If he is convicted of federal wire fraud charges, McFarland could spend 20 years in the federal slammer.
‘Luxury Music and Arts Event’ Results in Disaster
The Fyre Festival was sold as a super premium music and arts event. There participants would be spoiled with luxury, private air travel and five star, beachside accommodations. Tickets were sold for a minimum of $1200, and some may have paid $100,000 for the weekend.
The event was marketed as something akin to the Coachella Music and Arts Festival. It was supposed to occur over two weekends in April and May 2017. However, the event was not nearly what was promised.
Participants found themselves stranded on the island in the Bahamas with very little to eat and drink and even no electricity. McFarland and his co-organizer the rapper Ja Rule had to reportedly borrow millions of dollars to even get the festival underway. They are now facing several civil lawsuits stemming from the failed event.
Top 1% Were Promised Luxury Villas – They Got Tents
When the first chartered jets landed on the Bahamas island of Great Exuma, most of the young and rich participants were excited. They expected rock banks, private, luxury villas on the beach, celebrity chefs, and ample supplies of hot supermodels.
However, soon after the first guests arrived at the airport, Vanity Affair reports in its August 2017 story, that things were not right.
Fyre staffers met them at the airport, but they did not seem to know where the festival was or how to get there. They eventually caught a taxi to where the festival was supposed to be. All it looked like was a muddy, unfinished building site. Hundreds of concertgoers were waiting to be checked in and registered.
Even though there was no food, limited organization and no information, supermodels were still walking around giving people tequila shots.
At this point, McFarland rolled up in an ATV looking upset, Vanity Fair reports. He told people who had booked private, luxury villas to come with him.
But there were no private villas. All he had for these high rolling concertgoers to stay in was carpeted tents. Some claimed that the plan by the organizers seemed to be to get everyone as drunk as possible so they would not remember how bad the event was.
After several hours, hundreds of attendees took to social media and described that there was no food and limited accommodations. They then tried to get back to the mainland, but had trouble getting flights.
McFarland claimed that bad weather led to the failed event, causing the sewage and water systems they installed to be wiped out. But the problems were far deeper than that.
If a poorly planned party on a tropical island were the extent of it, McFarland would probably not be facing serious criminal charges. But, according to the New York Post, he misled investors, including telling an investor that his company made $44 million in a month. In fact, it had made only a few thousand in its entire existence.
That same story also alleges that he cooked the books of the Fyre Media app to get an investor to drop millions into the failed venture. He also stands accused of making up a spreadsheet that would back up his company’s financial claims.
McFarland Allegedly Living High on the Hog
Even though he is facing federal charges and several lawsuits, media reports indicate that McFarland is living it up. The New York Times reported this week that the man is making payments on a Maserati, and also is renting a penthouse in Manhattan for $21,000 per month.
However, he is being represented by a public defender, and had $5000 on him when he was arrested.
Wire Fraud Charges Could Net McFarland Major Jail Time
Poorly planning a weekend party/get away is one thing. But when it possibly involves misleading investors, federal charges will often result. The most serious charge that McFarland currently faces is wire fraud.
Wire fraud is a serious category of federal crimes that has to do with intentionally deceiving people for financial or material gain. This type of fraud is just like mail fraud but it involves the use of electronic and telecommunications equipment, such as wire, TV and radio.
The federal government deals with people convicted of mail or wire fraud very harshly. Typical sentences involve up to 30 years in prison and fines of $1 million or more.
Federal wire fraud charges will focus upon the exact type of fraud committed, and the nature of the social ill that is caused. The most common type is general wire fraud that involves TV, radio, Internet and any other means of transmitting fraudulent activities across state lines.
Federal sentencing guidelines apply to people who are convicted of wire fraud. Even for people convicted of non-aggravated types of wire fraud can get up to 20 years in prison.
It is possible that McFarland could face aggravated charges because the deceptions that may have been committed went on for years and involved several parties.
People who are facing federal wire fraud charges need to be represented by an experienced criminal defense attorney.