Monday, May 22, 2017

In Wreckage of the Fyre Festival, Fury, Lawsuits and an Inquiry

A few days after the spectacular collapse of the Fyre Festival, just as federal investigators began to circle the wreckage, the event’s would-be mastermind, Billy McFarland, was still making promises.

His failed event was sold on social media by the likes of Kendall Jenner as an ultraluxurious musical getaway in the Bahamas. Scheduled for two weekends starting in late April, it was supposed to up the ante in the competitive festival market. Instead, Fyre had become a punch line for its aborted opening, with reports of panicked millennials scrounging for makeshift shelter on a dark beach.

Yet, speaking on May 2 with unnerved employees at his TriBeCa office — with its $30,000 sound system and frequent fashion-model visitors — Mr. McFarland deflected blame and vowed that Fyre would survive to mount another festival next year. The coverage had been “sensationalized,” he insisted, according to a recording obtained by The New York Times. (Fyre has attributed its cancellation to a combination of factors, including the weather.)

Ja Rule, the rapper and Mr. McFarland’s celebrity business partner, looked on the bright side. “The whole world knows Fyre’s name now,” he said. “This will pass, guys.”

Their company, Fyre Media, however, was already facing the first of more than a dozen lawsuits seeking millions and alleging fraud, breach of contract and more.

The endeavor has also become the focus of a criminal investigation, with federal authorities looking into possible mail, wire and securities fraud, according to a source with knowledge of the matter, who was not authorized to discuss it. The investigation is being conducted by the United States attorney’s office for the Southern District of New York and the F.B.I.; it is being overseen by a prosecutor assigned to the complex frauds and cybercrime unit. (A spokesman for the United States attorney’s office and a spokeswoman for the F.B.I. declined to comment.)

There are many potential victims: ticket buyers, investors and businesses small and large, spread across the United States and the Bahamas. Blink-182, a planned headliner, can’t get its equipment out of customs limbo. Fyre’s employees have not been paid. MaryAnn Rolle, a restaurant owner in the Bahamas who catered daily meals and rented villas to the festival crew, says she is owed $134,000.

“I’m struggling” and feeling taken advantage of, Ms. Rolle said. “It’s embarrassing.”

Ja Rule was Fyre’s famous face, but at the center of the controversy is Mr. McFarland, a brash, 25-year-old entrepreneur with a gift for networking and buzzy social media. In his short career, he has persuaded people, over and over, to buy or invest in whatever he was selling, leaving behind a trail of aggrieved customers and business partners. He could be the Wolf of Wall Street for the selfie set, or Gatsby run through an Instagram filter.

Mr. McFarland and his lawyers declined to address specific allegations. But in a statement, he said: “I cannot emphasize enough how sorry I am that we fell short of our goal,” adding, “I’m committed to, and working actively to, find a way to make this right, not just for investors but for those who planned to attend.”

Stacey Richman, a lawyer for Ja Rule, said that he “would never participate in anything fraudulent; it’s simply not in his DNA.”

But interviews with more than two dozen people associated with Mr. McFarland or the festival, many of whom requested anonymity because of pending legal issues, turned up few who were surprised by the ruins in the Bahamas and beyond.

“The lies didn’t start with the Fyre Festival, let’s make that clear,” said Patrick McMullan, the veteran party photographer who came to regret his trust in Mr. McFarland’s business savvy.

by Joe Coscarelli, Melena Ryzik and Ben Sisario, NY Times |  Read more:
Image: Scott McIntyre