Fyre Festival founder negotiates with prosecutors over allegations he duped investors

Billy McFarland defrauded investors into buying a £906,000 stake in his company following promises of creating a 'life changing' music festival

McFarland is charged with scheming to defraud investors in his company, Fyre Media (REUTERS)

The US government is in plea negotiations with Billy McFarland, the man behind the Fyre Festival who was charged with wire fraud in the failed concert’s aftermath.

“Defence counsel and I have had discussions regarding a possible disposition of this case, and we plan to continue our discussions,” wrote Assistant US Attorney Kristy J. Greenberg in a filing on 28 July.

McFarland was first arrested on June 30 on charges that he defrauded investors who bought a $1.2m (£906,000) stake in Fyre Media. Authorities said McFarland provided false documents which inflated Fyre’s revenue. “William McFarland promised a ‘life changing’ music festival but in actuality delivered a disaster,” Acting Manhattan US Attorney Joon Kim alleged in a statement at the time. McFarland is currently free on a $300,000 bond.

The plea talks were revealed in a government request for a 30-day delay in the case. McFarland’s counsel, Randall W. Jackson of Boies, Schiller and Flexner LLP, consented to the continuance, according to the filing. Jackson and a spokesman for Kim, Nicholas Biase, declined to comment. McFarland has yet to formally respond to the charges. He could face years in prison if convicted.

The Fyre Festival was a music event in the Bahamas that went spectacularly awry. Promoted by advertisements with famed supermodels having fun in the sun, guests paid hundreds–even thousands–of dollars for a tropical getaway which promised an exotic scene with yachts, villas, and fine dining. The festival was put on to promote Fyre Media’s talent booking service, a startup founded in 2015 by McFarland and rapper Ja Rule, whose real name Jeffrey Atkins.

As the world would soon learn in a frenzy of media schadenfreude, ticket-holders found an unfinished campsite with substandard conditions and inadequate accommodations. Many were stranded through the night, either in an airport terminal or in tents, as they waited for transport off the island.

Some dozen lawsuits have been filed in the festival’s wake, including a purported $100m federal class-action in California. In the suit, aggrieved Fyre Festival customers accuse organizers of creating a “dangerous” situation as they were left helpless without basic provisions, including adequate food, water, and shelter.

Even before it began, organisers were scrambling to find funds to pay for the festival. They took on as much as $7m in debt prior to the event’s start date, according to documents reviewed by Bloomberg. It remains unclear how all that money was spent. A March 21 term sheet stated that the company was worth $90m. Authorities said Fyre Media earned less than $60,000.

Bloomberg