Billy McFarland Pleads Guilty After Fyre Festival FiascoBy
Millennial entrepreneur admits $26 million funding fraud
Billy McFarland ‘grossly underestimated’ required preparations
The millennial entrepreneur whose 2017 Fyre Festival began with promises of music and luxury in the Bahamas and descended into a chaos of badly constructed tents, cold cheese sandwiches and a lack of sufficient bathrooms may soon find himself in the no-frills accommodations of a federal prison.
Billy McFarland, 26, told a judge Tuesday that he “grossly underestimated the resources that would be necessary to hold an event of this magnitude.” McFarland may spend a decade in prison after admitting he defrauded 80 investors and a ticket broker out of more than $26 million.
"My intention and effort was directed to organizing a legitimate festival," McFarland said in a clear voice to U.S. District Judge Naomi Reice Buchwald in Manhattan. "In an attempt to raise what I thought were needed funds, I lied to investors about various aspects of Fyre Media and my personal finances."
McFarland became instantly notorious when patrons paying as much as $12,000 for a "life-changing" Caribbean music festival deplaned on the island of Great Exuma in April 2017, only to find port-a-potties instead of bathrooms and tents instead of private villas.
The festival, which McFarland organized with rap star Ja Rule, was to feature bands including Blink-182 and take place over two weekends. It collapsed at the last minute, with people stuck on the island left to chronicle the lack of preparations on social media and to find their own way home.
He pleaded guilty to two counts of wire fraud, both of which carry a maximum 20 years in prison. Under a plea deal with the government, both sides agreed to non-binding guidelines that would yield a sentence of eight to 10 years and a fine of as much as $300,000 when he’s sentenced June 21. McFarland agreed to pay restitution.
McFarland was arrested on June 30 for defrauding investors in Fyre Media Inc., a company he set up to build a digital application to allow organizers to book talent for concert an other events. Prosecutors said he provided false documents to investors in which he claimed Fyre Media had taken in millions of dollars from thousands of artist bookings in a single year. In reality, they alleged, the total was about $60,000 from just 60 performances.
The U.S. claimed McFarland also altered a stock ownership statement to make it appear that shares he owned that were worth less than $1,500 were actually valued at $2.5 million, allowing him to personally guarantee an investment. Organizers borrowed as much as $7 million in a last-minute bid to fund the doomed festival.
“McFarland promised a ‘life changing’ music festival but in actuality delivered a disaster,” then-acting U.S. Attorney Joon Kim said in a statement at the time of McFarland’s arrest.
McFarland also pleaded guilty to ripping off an unnamed ticket broker that bought $2 million for a block of advance tickets for Fyre festivals that would be held in future years.
McFarland is free on bail, living with his parents in New Jersey. He was released on $300,000 bail July 1 after spending a night in custody, forced to leave behind a $21,750-a-month Manhattan penthouse and $110,000 Maserati.
In addition to prison time, McFarland and Fyre Media face more than a dozen civil suits and an ongoing bankruptcy liquidation of the company, as investors and ticket buyers try to recover some of their losses.
The case is U.S. v. McFarland, 17-cr-00600, U.S. District Court, Southern District of New York (Manhattan).