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Fyre Festival organiser Billy McFarland jailed for six years

The 26-year-old founder of Fyre Festival has been sentenced to six years in prison for his role in organising and promoting the ill-fated April 2017 event.

Billy McFarland pled guilty in March to defrauding investors out of more than US$26m by misrepresenting the financial health of his company, Fyre Media, by “grossly inflat[ing] the company’s revenue and income”. In June he also pleaded guilty to running a fraudulent ticket scam, through his company NYC VIP Access, that involved selling non-existent tickets to events including Burning Man, Coachella and the 2018 Grammys using Fyre Festival customer data.

McFarland was also charged with one count of bank fraud, for writing a cheque in an employee’s name without authorisation, and making false statements to law enforcement.

Fyre Festival – billed as “the adventure of a lifetime” amid the “beautiful turquoise waters and idyllic beaches” of the island of Grand Exuma, in the Bahamas – spectacularly collapsed on its first day, with festivalgoers arriving on the island to find a half-built festival site and no sign of the luxury accommodation and dining included with their $1,500–$50,000 tickets.

“McFarland found out the hard way that empty promises don’t lead to jet-setting, champagne, and extravagant parties – they lead to federal prison”

McFarland (pictured) co-founded the event with Jeffrey Atkins (Ja Rule)’s Fyre Media company, but “ran the show”, says Atkins, who has denied liability for the disaster and has not been charged.

Sentencing, US district Judge Naomi Reice Buchwald yesterday ordered McFarland to be jailed for six years, followed by three years of supervised release. Buchwald also ordered him to forfeit $26,191,306.28.

Manhattan US attorney Geoffrey Berman comments: “Billy McFarland has shown a disturbing pattern of deception, which resulted in investors and customers losing over $26 million in two separate fraud schemes. As he had previously admitted, Billy McFarland did not deliver on his promises to his investors and customers.

“Today, McFarland found out the hard way that empty promises don’t lead to jet-setting, champagne, and extravagant parties – they lead to federal prison.”

 


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Ja Rule denies liability for Fyre Fest, blames McFarland

A solicitor for rapper Ja Rule, the co-founder of the infamous Fyre Festival, has told a New York judge his client is not liable for damages over the failings of the event, pointing the finger instead at his former business partner, Billy McFarland.

Rosemary Rivas, representing Matthew Herlihy and Anthony Lauriello, two of the festivalgoers suing Ja Rule (real name Jeffrey Atkins), McFarland and their Fyre Media company, noted in a recent court filing that Atkins “denies all substantive allegations […] and further states that the plaintiffs and the purported class failed to demonstrate that defendant, Atkins, committed fraud, made any misrepresentations, attempted to deceive them and/or is otherwise liable under a legal theory of common law or statutory fraud, misrepresentation, or conspiracy to do the same”.

Atkins’s lawyer, Thomas Herndon, yesterday elaborated on the nature of his client’s denials of culpability, telling judge Kevin Castel that McFarland had “hijacked” his vision for the festival.

“My client got wrapped up in this unintentionally. … His ideas got hijacked by McFarland”

“Billy McFarland ran the show,” said Hendon. “My client got wrapped up in this unintentionally.

“His ideas got hijacked by McFarland.”

The organisers of Fyre Festival – which collapsed on its first day, with festivalgoers arriving on the Bahamian island of Grand Exuma to find a half-built festival site and no sign of the luxury accommodation and dining included with their US$1,500–$50,000 tickets – are currently facing numerous lawsuits from disgruntled festivalgoers, and there have been calls recently for the various class actions to be centralised into one mega-suit.

McFarland, who became the public face of the festival, was arrested in July, charged with operating a “scheme to defraud investors” out of almost $1.2m. He was later released on bail, and is believed to be in plea-bargain negotiations with the US government.

 


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Fyre Festival promoter Billy McFarland arrested

Billy McFarland, the CEO of the company behind the ill-fated Fyre Festival, is facing up to 20 years in prison following his arrest for allegedly operating a “scheme to defraud investors” out of approximately US$1.2 million.

Fyre Media founder McFarland – who was, along with rapper Ja Rule (Jeffrey Atkins), the public face of the Bahamian festival, which spectacularly collapsed on its first day on 28 April – has been charged with one count of wire fraud by the US district attorney in Manhattan, which carries a maximum sentence of 20 years’ jail time.

The criminal complaint against McFarland follows several private lawsuits aimed at recovering lost funds from the doomed event, including from attendees, suppliers and a ticketing company, and McFarland and Atkins’ being banned from the Bahamas, for which the festival was a PR disaster.

Announcing McFarland’s arrest, a statement from the US attorney’s office for the southern district of New York says the accused “perpetrated a scheme to defraud, inducing at least two individuals to invest approximately $1.2m dollars in Fyre Media and an associated entity based on misrepresentations about Fyre Media’s revenue and income. In order to procure these investments, McFarland provided materially false information.

“For example, McFarland told investors that Fyre Media earned millions of dollars of revenue from thousands of artist bookings from at least July 2016 until April 2017. In reality, during that approximate time period, Fyre Media earned less than $60,000 in revenue from approximately 60 artist bookings.”

“McFarland allegedly presented fake documents to induce investors to put over a million dollars into his company and the fiasco called Fyre Festival”

McFarland is also alleged to have falsified financial documents to mislead investors as to the value of his own investments, making it appear as if he could personally guarantee their investment in Fyre Media. “Specifically, McFarland provided an altered brokerage statement that purported to show that he owned shares of a specific stock worth over $2.5 million, when in reality he owned shares of that stock valued at less than $1,500,” the complaint alleges.

William F. Sweeney Jnr, assistant director in charge of the FBI in New York, comments: “Under McFarland’s direction, Fyre Media created a promoter’s marketplace for entertainment bidding. In addition to this initial business venture, McFarland went one step further in establishing a subsidiary of the company, Fyre Festival LLC. But in order to drive the success of both entities, as alleged, 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 signalled that something just wasn’t right, as we allege in detail today.”

“As alleged, William McFarland promised a ‘life-changing’ music festival but in actuality delivered a disaster,” adds acting Manhattan US attorney Joon Kim. “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.”

McFarland, who reportedly used a public defender – usually reserved for those who can’t afford to pay for legal representation – was released on $300,000 bail on Saturday morning.

 


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Fyre ticketer Tablelist lays off 40% of workforce

Tablelist, a Massachusetts-based start-up hired to sell tickets for the ill-fated Fyre Festival, has been forced to lay off 40% of its consumer-facing staff as it sues festival organisers for lost earnings.

The latest lawsuit against Billy McFarland, Jeffrey ‘Ja Rule’ Atkins and other Fyre Media bosses – the tenth or 11th, depending which reports you read – alleges that “Fyre Festival organisers defrauded Tablelist into selling $3.5 million in tickets, then took the money and left the ticket sales platform responsible for customer chargebacks and refunds”.

Despite Fyre promising refunds to all who attended the festival – which collapsed on its first day after patrons arrived in the Bahamas to find a half-built “refugee camp” in lieu of the luxury accommodation they were promised – Tablelist says none have yet been issued. It is demanding US$3.5 million in Boston’s Suffolk County Superior Court so it can “refund the money to its customers”.

According to the complaint, Fyre “conducted a fraudulent, highly orchestrated scheme to convince Tablelist to provide ticketing-processing services for the festival, which Fyre falsely marketed as an ‘exclusive, luxury’ event. Event organisers presented Tablelist with numerous assurances the festival would be well organised and well funded, pointing to high-profile celebrity endorsements, headlining musical acts, significant sponsorship deals and a competitive bid process for the ticketing vendor role, according to the complaint.

“Based on these assurances, Tablelist sold more than $3.5m in concert tickets and VIP experiences, passing nearly every dollar through to the Fyre Festival organisers and retaining only 10% in escrow for potential consumer credit card chargebacks and ticket refunds and a transaction service fee.

“Despite announcing that ‘all festivalgoers this year will be refunded in full’, festival organisers never remitted a penny to Tablelist to pass along to consumers”

“After the event’s cancellation, Tablelist immediately demanded that Fyre Media return the millions of dollars they had received through ticket sales. Despite announcing that ‘all festivalgoers this year will be refunded in full’, festival organisers never remitted a penny to Tablelist to pass along to consumers. […] Ticket purchasers are now pursuing millions of dollars in chargebacks – working through their credit card companies to receive refunds – which vastly exceed the depleted escrow fund.”

As well as McFarland, Atkins and Fyre Media itself, the lawsuit lists marketing director Grant Margolis and investor Carola Jain as defendants.

Julian Jung (pictured), Tablelist’s CEO, comments: “Like so many other companies, investors and endorsers, Tablelist – and our customers – are victims of a fraud.

“Fyre Festival organizers completely left us hanging out to dry as the middle man between this disastrous event and our ticketholders. All the money sits with Fyre, and we’re fighting back to get those funds to our customers, where they belong.”

Since what it calls the “spectacular failure” of Fyre Festival, Tablelist has laid off 40% of its workforce on the consumer side of its business while it focuses on the lawsuit.

 


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Fyre promoters barred from Bahamas as suits mount

While all who attended last month’s disastrous Fyre Festival in the Bahamas have been offered tickets to next year’s event in lieu of refunds, organisers are increasingly looking like they will be forced to find a new home for 2018.

In the run-up the festival – which has since spawned several lawsuits after collapsing on its chaotic first day – promoters promised “the adventure of a lifetime” amid the “beautiful turquoise waters and idyllic beaches” of the island of Grand Exuma.

Billy McFarland, who established the festival with rapper Ja Rule (Jeffrey Atkins), told The New York Times on 28 April the next instalment would be outside the Bahamas, likely “on a beach in the United States”; now, the Bahamian government has reportedly taken steps to ensure that is the case, barring McFarland and Atkins from repeat business on the islands.

TMZ reports the Bahamas’ ministry of tourism has also introduced a “stricter vetting system” for any future festivals on the islands, and will consult with with promoters multiple times during the planning process to avoid a repeat of the debacle.

The Bahamas’ ministry of tourism has introduced a stricter vetting system for any future festivals on the islands

A source tells the gossip site it would have intervened in Fyre Festival sooner but “didn’t have the authority. It was a private event, so the government couldn’t get involved until guests’ safety became an issue.”

Meanwhile, Rolling Stone reports McFarland and Atkins are now the target of a total of six lawsuits. A North Carolinan couple, Kenneth and Emily Reel, are seeking US$5 million for fraud, misrepresentation and deceptive trade practices, while contractor National Event Services has sued for $250,000 in damages on behalf of its employees on site.

NES staff found “uninhabitable” accommodation, “bloodstained mattresses and no air conditioning”, the complaint alleges, and NES had nowhere to send any patient who may have required emergency care overnight” as the medical centre was closed. The suit also accuses McFarland and Atkins of “falsely misrepresented critical facts” about the festival, including the “capitalisation necessary” to stage the event.

 


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Lawyers seek big wins over Fyre Festival woes

With Fyre Festival, the “adventure of a lifetime” that descended into what one attendee called “Rich Kids of Instagram meets Lord of Flies – set to go down in history as a cautionary tale of how not to organise a music festival, lawyers for both festival and attendees are circling ahead of what is expected to be a protracted legal battle to establish culpability for the disaster.

As reported on Thursday, Fyre Festival, the brainchild of rapper Ja Rule and tech entrepreneur Billy McFarland, descended into chaos on its first (and, as it transpired, only) day, with festivalgoers arriving on the Bahamian island of Grand Exuma to find a half-built festival site and no sign of the luxury accommodation and dining included with their US$1,500–$50,000 tickets.

McFarland and Ja Rule (real name Jeffrey Atkins) have since offered refunds to all guests – or free tickets to Fyre Festival 2018 (!) – and apologised to guests, staff and the government of the Bahamas for the “unacceptable guest experience” – although Atkins has since claimed the debacle was “NOT MY FAULT” (caps his).

The most concrete legal challenge against Atkins, McFarland and their Fyre Media company comes in the form of a class-action lawsuit by attendee Daniel Jung, who is seeking damages “in excess” of US$100 million of behalf of himself and a “class of similarly situated persons” for alleged fraud, negligent misrepresentation, breach of contract and breach of the covenant of good faith and fair dealing.

Filed by Los Angeles-based Geragos & Geragos, the complaint alleges that “defendants [Fyre] had been aware for months that their festival was dangerously under-equipped and posed a serious danger to anyone in attendance. Individuals employed by defendants have since acknowledged that no infrastructure for food service or accommodations was in place as recently as last month – the island was totally barren – and that the few contractors who had been retained by defendants were refusing to work because they had not been paid.

“This class action will make sure to hold Fyre, and all those who recklessly and blindly promoted the festival, accountable”

“At the same time, however, defendants were knowingly lying about the festival’s accommodations and safety and continued to promote the event and sell ticket packages.”

The law firm also takes issue with the festival’s claim that the festival was to take place on a private island once owned by drug kingpin Pablo Escobar – namely the fact that nothing about it is even remotely true. “The island isn’t private, as there is a Sandals resort down the road,” writes Geragos & Geragos principal Mark Geragos, “and Pablo Escobar never owned the island.”

According to Geragos, both Atkins and McFarland had contacted several performers and celebrity guests in advance of the festival warning them not to attend, “acknowledging the fact that the festival was outrageously under-equipped and potentially dangerous for anyone in attendance”, and yet “only ‘cancelled’ the event on the morning of the first day – after thousands of attendees had already arrived and were stranded, without food, water or shelter.

“This outrageous failure to prepare, coupled with defendants’ deliberate falsehoods in promoting the island ‘experience’, demonstrates that the Fyre Festival was nothing more than a get-rich-quick scam from the very beginning. Defendants intended to fleece attendees for hundreds of millions of dollars by inducing them to fly to a remote island without food, shelter or water – and without regard to what might happen to them after that.”

While the complaint acknowledges that Fyre has offered refunds, it concludes that luring festivalgoers to “a deserted island and [leaving them] to fend for themselves” is “tantamount to false imprisonment”, so damages must exceed the face value of their ticket packages by many orders of magnitude”.

The complaint is unusual in that it incorporates screenshots from social-media sites such as Instagram, Facebook and Twitter, with photos of staff allegedly mishandling luggage, the ‘disaster relief’ tents that housed stranded guests,”wild animals” (cute swimming pigs) in the festival site and the now-famous sad cheese sandwich included as evidence.

“The infrastructure on Great Exuma is second to none. … We in the ministry are so disappointed that there have been false claims surrounding the island”

With said posting by Fyre Festival guests on social media – especially by prolific tweeters such as Seth Crossno (@WNFIV) and @FyreFraud – key to informing the world’s media about conditions on the island, Fyre Media’s lawyers reportedly hit back with a suit of their own, accusing those of live-tweeting the unfolding chaos on Grand Exuma of inciting “violence, rioting or civil unrest”.

According to TMZ, at least one festivalgoer – who claimed that the only accommodation on the island was disaster-relief tents on the verge of blowing over – received a cease-and-desist letter from Fyre warning that “if someone innocent does get hurt as a result [of your postings], Fyre Festival will hold you accountable and responsible.”

As predicted by IQ last week, the social media celebrities paid by Fyre to promote the festival – dubbed ‘Fyre Starters’ – have also found themselves in legal hot water. Geragos & Geragos’s Ben Meiselas told The Fashion Law the suit will “make sure to hold Fyre – and all those who recklessly and blindly promoted the festival – accountable” to ticket-holders (emphasis ours).

Although not explicitly named in the lawsuit, a leaked pitch document reveals Instagram ‘influencers’ such as Kendall Jenner, Bella Hadid, Emily Ratajkowski, Chanel Iman, and Hailey Baldwin were recruited as part of a “coordinated influencer marketing campaign” to promote the festival. The Federal Trade Commission (FTC) requires all those endorsing products on social media to disclose if their posts are paid advertisements.

A second class-action suit, filed yesterday in the Los Angeles County Superior Court, goes one step further, mentioning directly the “social media ‘influencers’ [who] made no attempt to disclose to consumers that they were being compensated for promoting the Fyre Festival”, reports THR.

“Social media ‘influencers’ made no attempt to disclose to consumers that they were being compensated for promoting the Fyre Festival”

Representing three attendees, Chelsea Chinery, Shannon McAuliffe and Desiree Flores, as well as the ‘class’ of people who bought tickets for or attended Fyre Festival, attorney John Girardi is seeking damages and an injunction to bar Atkins, McFarland and Fyre Media from “similar conduct”, throwing further into disarray plans to hold a second Fyre Festival in the US next year.

Short of suing festivalgoers for libel, the threat of any further legal action from Fyre Media’s side has likely passed (being that the festival is now over and all attendees evacuated, eliminating the threat of anyone being hurt).

There are, however, already signs of more lawsuits heading its way. The Bahamas’ Ministry of Tourism is estimated to have lost millions from Fyre Festival’s cancellation, and in a statement contested the festival’s claims that a “city” had to be “built from the ground up”, saying the “infrastructure on Great Exuma is second to none. The island has potable water, water and sewerage, internet and cable television services, an electricity plant, a waste management system, a mini hospital, police officers, a local government and border patrol officers.”

The ministry’s director-general, Joy Jibrilu, says she felt compelled to defend the island “amid reports from the organisers that it lacked the necessary infrastructure to host the Fyre Festival”.

One enterprising Florida lawyer, meanwhile, has already registered the domain fyrefestivallawsuit.com. Injury attorney Philip DeBerard says he is “investigating legal action to help victims get proper compensation for their tickets, airfare and other damages”, imploring ticket-holders to come forward to “explore your options to hold Fyre Festival, Ja Rule and others accountable and get full, fair and just compensation for your damages.”

In a nutshell: don’t expect this story to go anywhere any time soon.

 


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‘Like a refugee camp’: Chaos at Fyre Festival

Fyre Festival, the much-anticipated new luxury boutique event by Ja Rule and Billy McFarland’s Fyre Media, has descended into chaos on its first day, with many ticket-holders stranded in Miami following the cancellation of their flights – and those who did make it to the Bahamas discovering conditions that have been compared to a refugee camp.

Angry festivalgoers – who had paid at bare minimum $1,500 to be there, and some up to $50,000 – have taken to social media and the r/fyrefestival subreddit to document the half-built tents, mountains of rubbish and débris and sub-standard food (“The dinner that Fyre Festival promised us was catered by Steven Starr is literally bread, cheese and salad with dressing”, wrote one Redditor) waiting for them in the Exumas, although the festival has yet to be officially called off.

The Fyre Festival Twitter account, which has since deleted its entire tweet history, has so far only issued two advisories to those witnessing first-hand what it describes as “the unexpected start to #FyreFestival”, telling those waiting for flights that they would have their tickets refunded and those on site that festival staff are “working to comfortably accommodate [their] needs”.

Blink-182 had already cancelled their headline slot at the festival, telling fans last night they were “not confident that we have what we need to give you the quality of performances we always give our fans”.

There has, at the time of writing, been no word from the other performers, who include Major Lazer, Pusha T, Disclosure, Skepta and Desiigner.

The festival had been heavily publicised on social media by several wealthy, high-profile  ‘influencers’, including models Emily Ratajkowski and Bella Hadid and Keeping Up with the Kardashians star Kendall Jenner. There has been speculation some of the backers may now face legal action for contravening new regulations on transparency in social-media endorsements.

So hyped to announce my G.O.O.D. Music Family as the first headliners for @fyrefestival. Get tix now at fyrefestival.com. VIP access for my followers… use my promo code KJONFYRE for the next 24 hours to get on the list for the artists and talent afterparty on Fyre Cay. #fyrefestival

A post shared by Kendall (@kendalljenner) on

Matt Halfhill, the founder of trainer/sneaker news site Nice Kicks, posted photos on Twitter that appeared to show festivalgoers housed in disaster relief tents – a scene described by redditor Here_Comes_the_Kingz as looking like a “refugee camp”. Another said the festival resembles “Rich Kids of Instagram meets Lord of the Flies“.

According to an anonymous 4chan user, the US embassy is reportedly now involved, flying “military rescue missions” to retrieve those stranded on the island.

One of Twitter’s most comprehensive documenters of the conditions on site has been @FyreFraud, who yesterday posted a video showing the state of what it jokingly called the “tropical private island owned by [Pablo] Escabar”, showing a barren landscape strewn with rubbish and unassembled accommodation.

Fyre Festival has promised to “provide regular updates and news via email to guest [sic] and our official social media channels as they come”.

 

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Fyre Festival reveals line-up (and $400k tickets)

Fyre Festival, a new event by Ja Rule’s Fyre Media booking agency, has unveiled the line-up it hopes can lure deep-pocketed music fans and celebrity spotters away from Coachella this spring.

The festival, which will take place on 28–30 April and 5–7 May – the weekend after Coachella wraps up – in the Exumas, Bahamas, will be headlined by Pusha T, Desiigner, Major Lazer, Blink-182 and a Disclosure DJ set, with Migos, Kaytranada, Skepta and Lil Yachty also on the bill.

Fyre, however, says the “unparellelled soundtrack” is “only a piece of the two-weekend experience. Attendees will take a departure from the familiar for the adventure of a lifetime, immersing themselves in art, first-class cuisine and new levels of luxury.”

“The Exumas will also offer the ultimate destination for boaters, divers, snorkellers and kayakers looking to explore its beautiful turquoise waters and idyllic beaches,” the announcement continues. “It’s been said that from space, astronauts deem the Exumas as having the clearest and nicest waters in the world. Guests will be invited to take advantage of the beauty of the islands, with onsite programming including sunrise yoga, meditation, massages, fitness bootcamps, art installations, and much more.

Fyre Festival is reportedly already in financial trouble, having missed a number of deadlines for payments to artists

“Local excursions will include yachting, jet skiing, snorkelling the deepest blue hole in the world, seeing the swimming pigs, exploring the caves and catamaran parties.”

All $1,500 GA passes are sold out, with remaining tickets starting at US$2,500 for those with their own yachts, increasing to $399,995 – $49,999 each – for ‘artists estate’ and ‘artists palace’ packages, which include flights, artists’ pass tickets, accommodation and “exclusive VIP experiences”.

While the Bahamas’ ministry of tourism expects Fyre to deliver the islands a “significant economic boost”The Wall Street Journal suggests the festival, which has already shifted an estimated 12,000 tickets, is already in financial trouble, having missed a number of deadlines for payments to artists.

IQ Magazine explored the growth of luxury/VIP experiences at music festivals in issue 66.

 


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