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Billy McFarland

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Billy McFarland
McFarland in 2014
Born
William McFarland

(1991-12-11) December 11, 1991 (age 32)
New York City, New York, U.S.
NationalityAmerican
TitleFounder and CEO of Fyre Media
Criminal statusIncarcerated at FCI Elkton
Criminal chargeMail and wire fraud
Penalty6 years imprisonment, $26 million in restitution

William Z. McFarland (born December 11, 1991)[1][2] is an American convicted fraudster who co-founded the ill-fated Fyre Festival. He defrauded investors of $27.4 million by marketing and selling tickets to the festival and other events.[3]

In 2013, McFarland founded Magnises, a club targeted at millennials, using $1.5 million of investor funding. He later founded and acted as CEO of Fyre Media, which developed the Fyre mobile app for booking music talent. In late 2016, along with rapper Ja Rule, McFarland co-founded the Fyre Festival, a luxury music festival intended to promote the Fyre app. The event was scheduled to take place in April and May 2017, but was aborted after attendees had arrived due to problems with security, food, logistics, understaffing, accommodations, and talent relations.

In May 2017, McFarland and Ja Rule were sued for $100 million in a class action lawsuit on behalf of Fyre Festival attendees. The following month, McFarland was arrested and charged with wire fraud in Manhattan federal court for his role in the organization of the festival.[4][5][6] After pleading guilty to two counts of wire fraud in March 2018, he was sentenced to six years in federal prison.

Early life and education

McFarland was raised in the Short Hills section of Millburn, New Jersey.[7] His parents are real estate developers.[8] At age 13, he founded an online outsourcing startup that matched clients with web designers.[7] He graduated from the Pingry School in 2010.[9] He then attended Bucknell University, where he studied computer engineering, but dropped out in May of his freshman year.[7][10][11]

Career

McFarland dropped out of college toward the end of his freshman year and founded the short-lived online advertisement platform Spling where he served as CEO.[7][12]

In August 2013, McFarland seeded payments company Magnises with $1.5 million of investor funding,[13][14][15] aiming to create an exclusive "black card" with social perks, such as club membership, targeted at status-oriented millennials in certain big cities.[16][17] McFarland also launched Fyre Media Inc., the parent company of the Fyre Festival. In a term sheet sent to investors, Fyre Media claimed to be worth $90 million.[18] By contrast, authorities allege the company did only about $60,000 in business.[19]

On July 23, 2018, The New York Post reported that Anna Sorokin, a fraudster and would-be socialite, may have lived at the SoHo loft owned by McFarland for four months after asking to stay for only a few days. The loft was also used as the headquarters for the defunct millennial black credit card company Magnises.[20][21]

Fyre Festival

Main article: Fyre Festival
McFarland with Ja Rule at the 2016 Web Summit

McFarland founded Fyre Media and publicized a luxury music festival in the Bahamas, called Fyre Festival, to promote the Fyre music-booking application.[5] The festival, to be held in April 2017, was advertised by a video which included a bevy of Instagram models including Bella Hadid and Emily Ratajkowski who, along with Kendall Jenner, were all expected to be at the festival. However, the festival experienced a number of serious management, administration and misrepresentation issues and was canceled after guests had begun to arrive on Great Exuma island.[22] The festival subsequently became the focus of U.S. federal investigations and multiple lawsuits.[23]

McFarland borrowed as much as $7 million in an effort to fund the festival, taking one loan with an effective annualized rate of 120 percent.[24] McFarland defaulted on the loan and the lender sued.

The controversy around Fyre Festival were detailed in two documentaries in 2019: Hulu released Fyre Fraud on January 14, and Netflix released Fyre: The Greatest Party That Never Happened, directed by Chris Smith, on January 18.[25]

Fraud conviction

On May 1, 2017, Fyre Festival organizers Billy McFarland and Ja Rule were sued for $100 million in a class action lawsuit in relation to the failed Fyre Festival that left attendees stranded on the island of Great Exuma without basic provisions.[26] In addition to the class action lawsuit filed in May 2017, six federal and four individual lawsuits were filed in relation to the scheme.[27] McFarland was arrested by federal agents on June 30, 2017, and charged with wire fraud in relation to Fyre and Fyre Festival. He was released on $300,000 bail on July 1.[28] McFarland faced up to four years and nine months under U.S. sentencing guidelines, according to Assistant U.S. Attorney Kristy Greenberg. She added that McFarland's short but eventful career showed a "pattern of deception" and "overpromising luxury experiences that were not delivered". In July 2017, McFarland was represented by a public defender at a bail hearing after his previous legal team "had not been paid enough to continue to represent him".[28] McFarland later hired the private firm Boies, Schiller & Flexner as representation.[29]

In March 2018, McFarland pleaded guilty to two counts of wire fraud in Federal Court in Manhattan and admitted to using fake documents to attract investors to put more than $26 million into his company.[30] He agreed to forfeit over $26 million.[31] On June 12, 2018, McFarland was charged with selling fraudulent tickets to events such as the Met Gala, Burning Man, and Coachella while out on bail.[32] On October 11, 2018, McFarland was sentenced to six years in federal prison.[33]

McFarland is currently incarcerated at FCI Elkton, in Lisbon, Ohio. In April 2020 during the COVID-19 pandemic, McFarland requested compassionate release from prison to avoid contracting the virus. His request was denied the same month.[34] In July 2020 it was reported that McFarland has tested positive for COVID-19 at said facility.[35]

References

  1. ^ Hess, Amanda (30 January 2019). "Fyre Festival, Theranos and Our Never-Ending 'Scam Season'". The New York Times. Retrieved 7 February 2019. ...Billy McFarland (born in 1991), the impresario who dreamed up the doomed Bahamas-based Fyre music festival...
  2. ^ "Inmate Locator". Federal Bureau of Prisons. Retrieved 2019-01-21. Age: 27
  3. ^ Larson, Erik (October 12, 2018). "Fyre Festival Frauster Who Targeted Status Seekers Gets 6 Years,". Bloomberg News.
  4. ^ "Indictment and Complaint". Docket Alarm. Retrieved 4 February 2019.
  5. ^ a b Bluestone, Gabrielle (April 29, 2017). "A National Punchline". Vice. Retrieved May 1, 2017.
  6. ^ Stone, Madeline (1970-01-01). "The organizer of the doomed Fyre festival was previously accused of scamming millennials with promises of Hamilton tickets and trips to Cuba". Businessinsider.nl. Retrieved 2017-04-28.
  7. ^ a b c d Lewak, Doree (July 5, 2014). "The college dropout behind NYC's most exclusive credit card". New York Post.
  8. ^ "Fyre Festival Organizer Released on $300,000 Bail,". The New York Times. July 1, 2017.
  9. ^ Nast, Condé. "Fyre Festival: Anatomy of a Millennial Marketing Fiasco Waiting to Happen". Vanity Fair. Retrieved 2019-07-17.
  10. ^ "Black card for millennials," Fox Business, July 11, 2014.
  11. ^ Christopher Wink, "Spling founder Billy McFarland: our investors are in New York City," Technical.ly / Philly, March 6, 2012.
  12. ^ Madeline Stone, "A 23-year-old created a club for elite millennials where everyone gets a black card and parties in a New York City penthouse," Business Insider, July 17, 2015.
  13. ^ "Magnises". Crunchbase. Retrieved 26 January 2019.
  14. ^ Griffith, Carson (March 18, 2014). "Musicians Embrace Magnises, a Black Card for the Younger Set,". Billboard.
  15. ^ Earle-Levine, Julie (April 20, 2014). "Techie creates starter 'black card' for 20-somethings". New York Post.
  16. ^ Glass, Jeremy (April 18, 2014). "Magnises: The Only Other Black Card You Need to Know About". Supercompressor.com.
  17. ^ "The Mastermind Behind NYC's Newest Black Card". Bloomberg TV. August 19, 2014.
  18. ^ "Fyre Festival $100 Million Lawsuit Targets Investors Behind the Scenes". Bloomberg News. 2017-05-09. Retrieved 2017-08-07.
  19. ^ "Fyre Festival Founder McFarland Released on Bail to Return Home". Bloomberg News. 2017-07-01. Retrieved 2017-08-07.
  20. ^ Ryan, Lisa (2018-07-23). "Anna Delvey May Have Scammed the Fyre Festival Founder". The Cut. New York. Retrieved 2018-07-24.
  21. ^ Siegler, Mara (2018-07-23). "Wannabe socialite swindler may have bilked Fyre Festival fraudster". New York Post. Retrieved 2018-07-24.
  22. ^ Joe Coscarelli, "Fyre Festival, a Luxury Music Weekend, Crumbles in the Bahamas," The New York Times, April 28, 2017.
  23. ^ Joe Coscarelli, Melena Ryzik and Ben Sisario (21 May 2017). "In Wreckage of the Fyre Festival, Fury, Lawsuits and an Inquiry". The New York Times. Retrieved May 22, 2017.
  24. ^ "Fyre Festival Was Buried Under Millions in Debt Before It Even Began". Bloomberg.com. 2017-05-15. Retrieved 2017-08-07.
  25. ^ McLevy, Alex. "Who has the better Fyre Festival documentary, Netflix or Hulu?". TV Club. Retrieved 2019-01-28.
  26. ^ Parisi, Paula (May 1, 2017). "Mark Geragos Files $100 Million Suit Against Fyre Festival". Variety. Retrieved 2019-01-28.
  27. ^ Parisi, Paula (May 26, 2017). "Fyre Festival Lawsuits Advance on Dual Civil, Criminal Tracks". Variety. Retrieved 29 July 2017.
  28. ^ a b Ben Sisario (July 1, 2017). "Fyre Festival Organizer Released on $300,000 Bail". The New York Times. Retrieved July 25, 2018.
  29. ^ Anna Gaca (October 3, 2017). "Fyre Festival's Billy McFarland Pleads Not Guilty to Wire Fraud". Spin. Retrieved July 25, 2018.
  30. ^ "Fyre Festival: Billy McFarland admits fraud over 'luxury' event". BBC News. March 7, 2018.
  31. ^ Wang, Christine (2018-03-06). "Billy McFarland, organizer of disastrous Fyre Festival, pleads guilty to misleading investors". CNBC. Retrieved 2018-03-06.
  32. ^ Stevens, Matt (June 12, 2018). "Fyre Festival Organizer Sold Fake Tickets While Out on Bail, U.S. Says". The New York Times. Retrieved June 13, 2018.
  33. ^ "William McFarland Sentenced to 6 Years in Prison in Manhattan Federal Court for Engaging in Multiple Fraudulent Schemes and Making False Statements to a Federal Law Enforcement Agent" (Press release). Department of Justice, U.S. Attorney's Office, Southern District of New York. October 11, 2018. Archived from the original on October 19, 2018. Retrieved January 22, 2019.
  34. ^ "Prosecutors rebuff Fyre Fest's Billy McFarland's request for release from prison". ABC News. Retrieved 2020-05-17.
  35. ^ "Fyre Fest fraudster Billy McFarland contracts COVID-19 in prison". NY Post. July 4, 2020.
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