Billy McFarland

Last updated

Billy McFarland
Billy McFarland Entrepreneur 2014 (cropped).jpg
McFarland in 2014
Born
William Zervakos McFarland

(1991-12-11) December 11, 1991 (age 32)
NationalityAmerican
Known for Fyre Festival
TitleFounder and CEO of Fyre Media
Criminal statusReleased (September 2022)
Criminal charge Mail and wire fraud
PenaltySix years imprisonment (less than four years served), $26 million in restitution

William Zervakos McFarland (born December 11, 1991) is an American businessman whose enterprises have been characterized by fraud. He has served time in prison for financial crimes related to Fyre Festival, having defrauded investors of $27.4 million. [1] Vanity Fair describes him as "the poster boy for millennial scamming". [2]

Contents

In 2013, McFarland founded Magnises, a card-based 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, accommodation, 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. [3] [4] [5] After pleading guilty to two counts of wire fraud in March 2018, he was sentenced to six years in federal prison. He was released in late March 2022 after serving less than four years.

Early life and education

McFarland was born in 1991, [6] [7] and was raised in the Short Hills section of Millburn, New Jersey. His parents, Steven and Irene McFarland (née Zervakos), [8] are real estate developers. [9] He graduated from the Pingry School in 2010. [10] He then attended Bucknell University, but he dropped out in May of his freshman year. [11] [12]

Career

After McFarland dropped out of college, he founded the short-lived online advertisement platform Spling, where he served as CEO. [13] TechCrunch described Spling as a content-sharing network, criticizing its similarity to other services which existed at the time. [14]

In August 2013, McFarland seeded payments company Magnises with $1.5 million of investor funding, [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] however, according to authorities, the company only did about $60,000 in business. [19]

Fyre Festival

McFarland with Ja Rule at the 2016 Web Summit Web Summit 2016 - MusicNotes - Nov 10 - Day 3 DSC0839 (30810709661).jpg
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. [4] 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 at Great Exuma island. Guests were met with tents and pre-packaged sandwiches instead of the lavish villas and meals they were promised. [20] The festival subsequently became the focus of U.S. federal investigations and multiple lawsuits. [21]

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. [22] McFarland defaulted on the loan, and the lender sued.

The controversy around Fyre Festival were detailed in two documentaries in January 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. [23]

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. [24] In addition to the class-action lawsuit filed in May 2017, 6 federal and 4 individual lawsuits were filed in relation to the scheme. [25] 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. [9] 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". [9] McFarland later hired the private firm Boies, Schiller & Flexner as representation. [26] While on bail, he committed further fraud with a scheme called "NYC VIP Access" selling tickets to events that had either not been announced or that tickets were unavailable for public purchase to attend, including the Met Gala. Footage of him carrying out this fraud was (inadvertently) recorded and later appeared in Netflix's Fyre documentary. [27]

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. [28] He agreed to forfeit $26 million. [29] 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. [30]

Incarceration

On October 11, 2018, McFarland was sentenced to six years in federal prison. [31] During his time in prison, McFarland says he attempted to write a book using voice notes,[ clarification needed ] and create a podcast using a prison phone. He says both of these were not allowed, and therefore he was punished by being put in solitary confinement. [2] 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. [32] [33] In July 2020, it was reported that McFarland tested positive for COVID-19 at the facility. [33]

He was released from prison early on March 30, 2022, to be relocated to a halfway house. [34] [35] His time under house arrest ended in September 2022. [36]

Post-incarceration

In October 2022, McFarland teased in a video on TikTok and YouTube Shorts that he was planning a new business venture called "PYRT", with more details to be announced in November 2022. [37] In an interview with Vanity Fair he described it as "virtual immersive decentralized reality". The magazine described it as "Fyre Festival Lite, without the capacity issues". [2] The Government of the Bahamas responded to speculation PYRT may hold events in the country by stating they consider him a "fugitive" and would not endorse any event associated with McFarland. [38]

In April 2023, McFarland announced via Twitter that "Fyre Festival II is finally happening". As of April 2023, he had not provided any details, such as musical guests or dates. [39] [40] In August 2023, McFarland announced on TikTok that the "first 100" tickets for Fyre II were on sale for $499, despite still not having a venue, a date, or any musical acts. [41] According to McFarland, the tickets sold out relatively quickly. [42]

On February 29, 2024, McFarland posted on Instagram that Fyre Fest 2 was being scheduled for February 2025 at the Coral View Beach Resort, on the Honduran island of Utila. [43] On April 23, 2024, McFarland posted on his instagram story an update with the following 4 Locations being picked: Belize, Cuba, Dominican Republic or Honduras (Utila). [44]

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References

  1. ↑ Larson, Erik (October 12, 2018). "Fyre Festival Fraudster Who Targeted Status Seekers Gets 6 Years". Bloomberg .
  2. 1 2 3 "Billy McFarland Is Sorry—Really. He's Also Got a New Pitch for You". Vanity Fair. December 21, 2022. Retrieved January 29, 2023.
  3. ↑ "Indictment and Complaint". Docket Alarm. Retrieved February 4, 2019.
  4. 1 2 Bluestone, Gabrielle (April 29, 2017). "A National Punchline". Vice . Retrieved May 1, 2017.
  5. ↑ Stone, Madeline (April 28, 2017). "The organizer of the doomed Fyre festival was previously accused of scamming millennials with promises of Hamilton tickets and trips to Cuba". Business Insider. Retrieved April 28, 2017.
  6. ↑ Dennin, Torsten (2023). Games of Greed: Excess, Hubris, Fraud, and Theft on Main Street and Wall Street. Austin, Texas: River Grove Books. p. 269. ISBN   978-1-63299-641-1. Born William Zervakos McFarland on December 11, 1991...
  7. ↑ 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...
  8. ↑ "Greek-American William McFarland Pleads Guilty in Manhattan Federal Court". The National Herald . July 29, 2018. Retrieved February 11, 2024.
  9. 1 2 3 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.
  10. ↑ "Fyre Festival: Anatomy of a Millennial Marketing Fiasco Waiting to Happen". Vanity Fair. June 29, 2017. Retrieved July 17, 2019.
  11. ↑ "Black card for millennials | Fox Business Video". Fox Business. February 3, 2017.
  12. ↑ Wink, Christopher (March 6, 2012). "Spling founder Billy McFarland: our investors are in New York City [Exit Interview]". Technical.ly.
  13. ↑ 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.
  14. ↑ "New Content Sharing Network Spling Launches, Announces $400K Series A". December 5, 2011.
  15. ↑ Griffith, Carson (March 18, 2014). "Musicians Embrace Magnises, a Black Card for the Younger Set". Billboard .
  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. May 9, 2017. Retrieved August 7, 2017.
  19. ↑ "Fyre Festival Founder McFarland Released on Bail to Return Home". Bloomberg. July 1, 2017. Retrieved August 7, 2017.
  20. ↑ 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.
  21. ↑ 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.
  22. ↑ "Fyre Festival Was Buried Under Millions in Debt Before It Even Began". Bloomberg. May 15, 2017. Retrieved August 7, 2017.
  23. ↑ McLevy, Alex (January 17, 2019). "Who has the better Fyre Festival documentary, Netflix or Hulu?". TV Club. Retrieved January 28, 2019.
  24. ↑ Parisi, Paula (May 1, 2017). "Mark Geragos files $100 million suit against Fyre Festival". Variety. Retrieved January 28, 2019.
  25. ↑ Parisi, Paula (May 26, 2017). "Fyre Festival lawsuits advance on dual civil, criminal tracks". Variety. Retrieved July 29, 2017.
  26. ↑ Gaca, Anna (October 3, 2017). "Fyre Festival's Billy McFarland pleads not guilty to wire fraud". Spin. Retrieved July 25, 2018.
  27. ↑ "Netflix's 'Fyre' director explains how getting the footage of the NYC VIP Access ticket-selling scam was 'kind of an accident'". Business Insider .
  28. ↑ "Billy McFarland admits fraud over 'luxury' event". BBC News . Fyre Festival. March 7, 2018.
  29. ↑ Wang, Christine (March 6, 2018). "Billy McFarland, organizer of disastrous Fyre Festival, pleads guilty to misleading investors". CNBC. Retrieved March 6, 2018.
  30. ↑ 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.
  31. ↑ "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.
  32. ↑ Barr, Alex (April 29, 2020). "Prosecutors rebuff Fyre Fest's Billy McFarland's request for release from prison". ABC News. Retrieved May 17, 2020.
  33. 1 2 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.
  34. ↑ Golgowski, Nina (May 19, 2022). "Fyre Festival Founder Billy McFarland Gets Early Prison Release". HuffPost. Retrieved May 19, 2022.
  35. ↑ Stutz, Colin (May 19, 2022). "Fyre Festival Founder Billy McFarland Released From Prison to Halfway House". Billboard. Retrieved July 25, 2022.
  36. ↑ Bernstein, Jacob (September 10, 2022). "Billy McFarland Is Out of Jail and Ready for His Next Move". The New York Times. ISSN   0362-4331 . Retrieved September 12, 2022.
  37. ↑ Eggertsen, Chris; Brooks, Dave (October 25, 2022). "Disgraced Fyre Festival Founder Billy McFarland Is Back With a New Post-Prison Venture". Billboard. Retrieved October 28, 2022.
  38. ↑ "FYRE FUGITIVE: Ministry of Tourism says Billy McFarland wanted by police". Eye Witness News. November 14, 2022. Retrieved January 29, 2023.
  39. ↑ Hurler, Kevin (April 10, 2023). "Billy McFarland Warns, Fyre Fest 2 'Is Finally Happening'". Gizmodo. Retrieved April 10, 2023.
  40. ↑ Williams, Chris (April 10, 2023). "Fyre Festival 2 is happening years after creator pleaded guilty to fraud". FOX13 News. Retrieved April 10, 2023.
  41. ↑ "Fyre Festival 2 Tickets Go On Sale, Billy McFarland Announces". August 21, 2023.
  42. ↑ "Early tickets for Billy McFarland's Fyre Festival II are sold out: What we know". USA TODAY. Retrieved February 19, 2024.
  43. ↑ https://twitter.com/i/status/1783059810314789134
  44. ↑ https://ibb.co/vxzJDqr
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