Fyre Festival: How a 25-year-old scammed investors out of $26 million

In April 2017, roughly 5,000 people spent hundreds to thousands of dollars for tickets to what they thought would be the experience of a lifetime: a luxury music festival in an idyllic tropical setting on a private island in the Bahamas.

Promotions for the much-hyped event, called Fyre Festival, promised “a place where the tropical sun shines all day, and our celebrations ignite the night. This is an invitation to unplug, connect with something deeper, and hunt for something bigger.”

Festival-goers were promised a real-life island fantasy with luxury accommodations, gourmet food and the chance to party with celebrities like rapper Ja Rule and models Kendall Jenner and Bella Hadid. But the reality was closer to a disaster that played out in real-time on social media: Thousands of attendees arrived in the Bahamas to find disorganization as fellow festival-goers scrambled to claim a limited number of tents (rather than the luxury villas they’d been promised), some with bare, soaking-wet mattresses that had been left outside in the rain.

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Instead of the “local seafood, Bahamian-style sushi, and even a pig roast” that was advertised, photos showing cold cheese sandwiches in foam containers went viral. And rather than “an immersive music festival [over] two transformative weekends,” the many A-list musical acts promoted as headliners by Fyre Festival’s organizers — among them, rappers Pusha T, Tyga, and Migos, as well as the band Blink-182 — dropped out in the days leading up to the event.

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Attendees started leaving en masse and images and videos of distraught and disappointed ticket holders swept social media.

“In the concert industry, there has never been anything that remotely rivals the disaster that the Fyre Festival became,” Bryan Burrough, a special correspondent for Vanity Fair, tells CNBC’s “American Greed.”

The disastrous Fyre Festival spawned lawsuits against the event’s organizers, who included Ja Rule and Fyre Media CEO Billy McFarland, the latter of whom is now serving a six-year prison sentence for fraud. Fyre Festival is the subject of the latest episode of CNBC’s “American Greed,” which aired on Monday.

Who is Billy McFarland?


McFarland, now 27, grew up in New Jersey, where his parents run a real estate development company, and he briefly attended Bucknell University before dropping out after less than a year. McFarland presented himself as a successful serial entrepreneur, having launched multiple high-profile ventures before he turned 25. But FBI agent John Casale, who oversaw the criminal investigation into Fyre Festival and McFarland, calls McFarland a “serial fraudster” who launched a series of scams that the government says defrauded over 100 investors out of more than $26 million.

Before Fyre Festival, McFarland had made a name for himself in 2013 by launching a credit card venture called Magnises, which sold clients an invite-only black card (meant to be a financial status symbol similar to the American Express Centurion, or Black, credit card, but for millennials). He promised it would give them access to exclusive parties and VIP events as well as discounts at posh restaurants and clubs for a membership fee of $250 a year. However, critics pointed out that Magnises was not a real standalone credit card (it simply copied the magnetic strip of clients’ original cards and all charges reverted back to those cards), and Bloomberg noted in one report that it was “never clear” exactly how many members Magnises had.

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