Billy McFarland (fraudster)

From Wikipedia, the free encyclopedia

Billy McFarland
Billy McFarland Entrepreneur 2014 (cropped).jpg
Born
William Z. McFarland

1991 (age 30–31)
New York, New York, U.S.
EducationBucknell University (dropped out)
Known forFyre Festival
TitleFounder and CEO of Fyre Media
Criminal statusIncarcerated at FCI Milan (inmate number 91186-054)
Criminal chargeMail and wire fraud
PenaltySix years imprisonment, $26 million in restitution

William Z. McFarland (born 1991) is an American entrepreneur and convicted felon 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.[1]

In 2013, McFarland founded Magnises, a club targeted at millennials, using $1.5 million of investor funding. He later founded and was 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.[2][3][4] 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 born in 1991.[5] He was raised in the Short Hills section of Millburn, New Jersey.[6] His parents are real estate developers.[7] McFarland told the New York Times that at age 13, he founded an online outsourcing startup that matched clients with web designers.[6] He graduated from the Pingry School in 2010.[8] He then attended Bucknell University, where he dropped out in May of his freshman year.[6][9][10]

Career[]

After McFarland dropped out of college he founded the short-lived online advertisement platform Spling, where he served as CEO.[6][11] Techcrunch described Spling as a content sharing network, criticizing its similarity to other services which existed at the time.[12]

In August 2013, McFarland seeded payments company Magnises with $1.5 million of investor funding,[13][14] aiming to create an exclusive "black card" with social perks, such as club membership, targeted at status-oriented millennials in certain big cities.[15][16] 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.[17] Authorities allege the company did only about $60,000 in business.[18]

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.[3] 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. Guests were met with tents and pre-packaged sandwiches instead of the lavish villas and meals they were promised.[19] The festival subsequently became the focus of U.S. federal investigations and multiple lawsuits.[20]

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.[21] 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 directed by Jenner Furst and Julia Willoughby Nason on January 14, and Netflix released Fyre: The Greatest Party That Never Happened, directed by Chris Smith, on January 18.[22]

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.[23] In addition to the class-action lawsuit filed in May 2017, 6 federal and 4 individual lawsuits were filed in relation to the scheme.[24] 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.[7] McFarland faced up to 4 years and 9 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".[7] McFarland later hired the private firm Boies, Schiller & Flexner as representation.[25]

In March 2018, McFarland pleaded guilty to 2 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.[26] He agreed to forfeit $26 million.[27] 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.[28]

Incarceration[]

On October 11, 2018, McFarland was sentenced to six years in federal prison.[29] In April 2020, during the COVID-19 pandemic, McFarland requested compassionate release from Federal Correctional Institution, Elkton, in Lisbon, Ohio, to avoid contracting the virus, with the reasoning that as an asthmatic he was especially vulnerable to the virus. His request was denied the same month.[30][31] As of May 2020, McFarland was housed at the Milan Federal Correctional Institution in Milan, Michigan, under federal inmate register number 91186-054, with a scheduled release date of August 30, 2023.[32] In July 2020, it was reported that McFarland tested positive for COVID-19 at the facility.[31]

References[]

  1. ^ Larson, Erik (October 12, 2018). "Fyre Festival Frauster Who Targeted Status Seekers Gets 6 Years". Bloomberg News.
  2. ^ "Indictment and Complaint". Docket Alarm. Retrieved February 4, 2019.
  3. ^ a b Bluestone, Gabrielle (April 29, 2017). "A National Punchline". Vice. Retrieved May 1, 2017.
  4. ^ Stone, Madeline. "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 April 28, 2017.
  5. ^ Hess, Amanda (January 30, 2019). "Fyre Festival, Theranos and Our Never-Ending 'Scam Season' (Published 2019)". The New York Times. ISSN 0362-4331. Retrieved February 7, 2019. ...Billy McFarland (born in 1991), the impresario who dreamed up the doomed Bahamas-based Fyre music festival...{{cite news}}: CS1 maint: url-status (link)
  6. ^ a b c d Lewak, Doree (July 5, 2014). "The college dropout behind NYC's most exclusive credit card". New York Post.
  7. ^ a b c Sisario, Ben (July 1, 2017). "Fyre Festival Organizer Released on $300,000 Bail (Published 2017)". The New York Times. ISSN 0362-4331. Retrieved March 10, 2021.
  8. ^ "Fyre Festival: Anatomy of a Millennial Marketing Fiasco Waiting to Happen". Vanity Fair. Retrieved July 17, 2019.
  9. ^ "Black card for millennials," Fox Business, July 11, 2014.
  10. ^ Christopher Wink, "Spling founder Billy McFarland: our investors are in New York City," Technical.ly / Philly, March 6, 2012.
  11. ^ 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.
  12. ^ "New Content Sharing Network Spling Launches, Announces $400K Series A". December 5, 2011.
  13. ^ Griffith, Carson (March 18, 2014). "Musicians Embrace Magnises, a Black Card for the Younger Set". Billboard.
  14. ^ Earle-Levine, Julie (April 20, 2014). "Techie creates starter 'black card' for 20-somethings". New York Post.
  15. ^ Glass, Jeremy (April 18, 2014). "Magnises: The Only Other Black Card You Need to Know About". Supercompressor.com.
  16. ^ "The Mastermind Behind NYC's Newest Black Card". Bloomberg TV. August 19, 2014.
  17. ^ "Fyre Festival $100 Million Lawsuit Targets Investors Behind the Scenes". Bloomberg News. May 9, 2017. Retrieved August 7, 2017.
  18. ^ "Fyre Festival Founder McFarland Released on Bail to Return Home". Bloomberg News. July 1, 2017. Retrieved August 7, 2017.
  19. ^ Coscarelli, Joe; Ryzik, Melena (April 28, 2017). "Fyre Festival, a Luxury Music Weekend, Crumbles in the Bahamas (Published 2017)". The New York Times. ISSN 0362-4331. Retrieved March 10, 2021.
  20. ^ Coscarelli, Joe; Ryzik, Melena; Sisario, Ben (May 21, 2017). "In Wreckage of the Fyre Festival, Fury, Lawsuits and an Inquiry (Published 2017)". The New York Times. ISSN 0362-4331. Retrieved May 22, 2017.{{cite news}}: CS1 maint: url-status (link)
  21. ^ "Fyre Festival Was Buried Under Millions in Debt Before It Even Began". Bloomberg.com. May 15, 2017. Retrieved August 7, 2017.
  22. ^ McLevy, Alex. "Who has the better Fyre Festival documentary, Netflix or Hulu?". TV Club. Retrieved January 28, 2019.
  23. ^ Parisi, Paula (May 1, 2017). "Mark Geragos files $100 million suit against Fyre Festival". Variety. Retrieved January 28, 2019.
  24. ^ Parisi, Paula (May 26, 2017). "Fyre Festival lawsuits advance on dual civil, criminal tracks". Variety. Retrieved July 29, 2017.
  25. ^ Gaca, Anna (October 3, 2017). "Fyre Festival's Billy McFarland pleads not guilty to wire fraud". Spin. Retrieved July 25, 2018.{{cite news}}: CS1 maint: url-status (link)
  26. ^ "Billy McFarland admits fraud over 'luxury' event". BBC News. Fyre Festival. March 7, 2018.
  27. ^ Wang, Christine (March 6, 2018). "Billy McFarland, organizer of disastrous Fyre Festival, pleads guilty to misleading investors". CNBC. Retrieved March 6, 2018.
  28. ^ Stevens, Matt (June 12, 2018). "Fyre Festival organizer sold fake tickets while out on bail, U.S. says". The New York Times. ISSN 0362-4331. Retrieved June 13, 2018.{{cite news}}: CS1 maint: url-status (link)
  29. ^ "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". U.S. Attorney's Office, Southern District of New York (Press release). Department of Justice. October 11, 2018. Archived from the original on October 19, 2018. Retrieved January 22, 2019.
  30. ^ Barr, Alex (April 29, 2020). "Prosecutors rebuff Fyre Fest's Billy McFarland's request for release from prison". ABC News. Retrieved May 17, 2020.
  31. ^ a b Tron, Gina (July 6, 2020). "Fyre Festival organizer Billy McFarland says he's tested positive for COVID-19 as fellow inmate says they're 'sitting ducks'". Oxygen. Retrieved March 3, 2021.
  32. ^ "Bureau of Prisons inmate search".
Retrieved from ""