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Fyre Festival founder Billy McFarland arrested on new fraud charges

By | Published on Wednesday 13 June 2018

Billy McFarland

Currently awaiting sentencing on charges of fraud, Fyre Festival founder Billy McFarland is facing new charges relating to an alleged ticketing scam. The new allegations are nothing to do with his doomed luxury festival in the Bahamas, except that the alleged scam used that event’s database of rich kids. It also occurred after the collapse of the Fyre event.

McFarland was arrested yesterday on new charges of wire fraud and money laundering. In a court submission, the US Department Of Justice accuses him of “conducting a sham ticket scheme in which he purported to sell fraudulent tickets to exclusive fashion, music, and sporting events through NYC VIP Access, a company controlled by the defendant, and also caused the fraud proceeds to be sent to others’ financial accounts in an effort to conceal his ownership and control of the funds”.

In March this year, McFarland pleaded guilty to two charges of wire fraud, relating to the funding of the disastrous Fyre Festival and its associated businesses. He reached a plea deal, in which prosecutors agreed to recommend a prison sentence of eight to ten years, rather than the 40 he potentially faces under US law.

The actual sentencing was due to take place next week, although the US government has now requested that this be postponed in light of the new charges. It has also requested a hearing to decide whether or not to revoke his bail in the meantime.

McFarland’s lawyer Randall Jackson argued that his client’s bail should remain in place, as he had fully co-operated since he learned that FBI officers intended to arrest him on these new charges. He added that they “vigorously contest what is in this complaint”, claiming that McFarland is being framed by a former colleague.

According to the Associated Press, Assistant US Attorney Kristy Greenberg outlined the specifics of the alleged ticket scam. It’s claimed that McFarland conned at least fifteen people out of more than $100,000 through the scheme. Using the list of Fyre Festival ticket buyers, he allegedly sold non-existent tickets to the Met Gala, Burning Man, Coachella, the Grammy Awards, the Super Bowl and more.

“The weight of the evidence here is quite strong”, she said. “He targeted the same victims who tried to attend his Fyre Festival”.

Details of the alleged scam were summarised by Vice hours before McFarland’s arrest yesterday. “Since December, onetime subscribers to email lists created by McFarland have been hit with offers from a variety of companies sharing a familiar theme: access to the billionaire lifestyle on a millennial budget”, the article states.

One such recipient of these emails, Seth Crossno, said: “I just laugh when I get these offers. The people sending them should realise by now that they’re just going to end up in the news as, ‘here’s another scam for Fyre Festival attendees'”.

Fyre Festival, of course, was the music event due to take place on an island in the Bahamas in April and May last year. Marketed as a super luxurious experience, the festival collapsed just as people were arriving, as it became clear management hadn’t put in place the infrastructure for even a basic event, let alone the luxury set-up that had been promised.

Prosecutors said that McFarland took over $26 million from 80 investors in relation to the failed Fyre venture. He also provided false information to a ticketing company, convincing it to hand over $2 million for a block of advance tickets for future editions of the event. That deal was done just days before the first edition of the doomed festival was due to take place.

The festival was co-founded by McFarland and rapper Ja Rule, who were also collaborating on a talent-booking app under the Fyre brand, which the abandoned island adventure was designed to promote. Since the event’s collapse, the Fyre companies and their founders have been on the receiving end of a stack of lawsuits from disgruntled ticket-buyers, suppliers and investors, in addition to McFarland’s fraud charges.

Adding to that mounting pile of litigation, yesterday a New York court overseeing the Fyre company’s bankruptcy allowed one of the festival’s investors – EHL Funding LLC – to proceed with a $3 million claim against McFarland and his former business.