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SEC Charges Failed Fyre Festival Founder and Others with $27.4M Offering Fraud

195 pointsby moritzplassnigalmost 7 years ago

10 comments

tlrobinsonalmost 7 years ago
This reminded me of Anna Delvey, the fake socialite who scammed a bunch of people in NYC: <a href="https:&#x2F;&#x2F;www.vanityfair.com&#x2F;news&#x2F;2018&#x2F;04&#x2F;my-misadventure-with-the-magician-of-manhattan" rel="nofollow">https:&#x2F;&#x2F;www.vanityfair.com&#x2F;news&#x2F;2018&#x2F;04&#x2F;my-misadventure-with...</a><p>It turns out she may have squatted in Billy McFarland&#x27;s company&#x27;s office for months, refusing to leave: <a href="https:&#x2F;&#x2F;www.thecut.com&#x2F;2018&#x2F;07&#x2F;anna-delvey-scams-fyre-festival-billy-mcfarland.html" rel="nofollow">https:&#x2F;&#x2F;www.thecut.com&#x2F;2018&#x2F;07&#x2F;anna-delvey-scams-fyre-festiv...</a><p>I wonder if these people initially set out to straight up scam people, or if they got caught up in the &quot;fake it till you make it&quot; &#x2F; Instagram culture, and just kept digging themselves deeper.
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Animatsalmost 7 years ago
McFarland is in prison. The &quot;related criminal charges&quot; put him in the Federal pen.[1]<p><pre><code> Federal Bureau of Prisons Inmate Locator WILLIAM Z MCFARLAND Register Number: 91186-054 Age: 26 Race: White Sex: Male Located at: Brooklyn MDC Release Date: UNKNOWN </code></pre> While out on bail awaiting sentencing, he tried another fraud last month, selling fake tickets to real festivals.[2] That got his bail revoked and a quick trip to the Brooklyn Metropolitan Detention Center.<p>[1] <a href="https:&#x2F;&#x2F;www.bop.gov&#x2F;inmateloc&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.bop.gov&#x2F;inmateloc&#x2F;</a> [2] <a href="https:&#x2F;&#x2F;variety.com&#x2F;2018&#x2F;biz&#x2F;news&#x2F;fyre-festival-founder-billy-mcfarland-arrested-for-new-ticket-selling-scam-1202844282&#x2F;" rel="nofollow">https:&#x2F;&#x2F;variety.com&#x2F;2018&#x2F;biz&#x2F;news&#x2F;fyre-festival-founder-bill...</a>
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jumpman500almost 7 years ago
&gt; McFarland induced investors to entrust him with tens of millions of dollars by fraudulently inflating key operational, financial metrics and successes of his companies, as well as his own personal success – including by giving investors a doctored brokerage account statement purporting to show personal stock holdings of over $2.5 million when, in reality, the account held shares worth under $1,500<p>Man. This whole event sounds like the perfect setup for a comedy. I really hope it&#x27;s in the works.<p><a href="https:&#x2F;&#x2F;www.eonline.com&#x2F;news&#x2F;847110&#x2F;fyre-festival-the-movie-seth-rogen-and-the-lonely-island-say-they-planned-film-about-music-festival-gone-wrong" rel="nofollow">https:&#x2F;&#x2F;www.eonline.com&#x2F;news&#x2F;847110&#x2F;fyre-festival-the-movie-...</a>
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JumpCrisscrossalmost 7 years ago
Billy McFarland&#x27;s Wikipedia page [1] is an entertaining read.<p>My favorite part of his story: &quot;federal prosecutors in Manhattan said that from late 2017 to about March — months after Mr. McFarland had been charged [&quot;with wire fraud in relation to Fyre and Fyre Festival&quot;] — he ran a company that sold fraudulent tickets to exclusive events like the Met Gala, Burning Man and Coachella. In one case, the authorities said, two customers flew from Florida to New York for the Grammy Awards, only to be turned away at the door&quot; [2].<p>Not sure how someone becomes this irredeemable at just twenty-seven year old.<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Billy_McFarland_(entrepreneur)#cite_note-27" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Billy_McFarland_(entrepreneur)...</a><p>[2]<a href="https:&#x2F;&#x2F;www.nytimes.com&#x2F;2018&#x2F;06&#x2F;12&#x2F;arts&#x2F;fyre-festival-organizer-fraud.html" rel="nofollow">https:&#x2F;&#x2F;www.nytimes.com&#x2F;2018&#x2F;06&#x2F;12&#x2F;arts&#x2F;fyre-festival-organi...</a>
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tunesmithalmost 7 years ago
&quot;Let&#x27;s just do it and be legends, man.&quot; This sentence has made it into the vernacular of my group of friends, whenever we start considering something that isn&#x27;t at all thought out yet.
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sschuelleralmost 7 years ago
What about the people who promoted it without disclosing that they were paid to promote it? Certein Instagram celebrities come to mind.
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ergothusalmost 7 years ago
&gt; The Securities and Exchange Commission today announced that New York entrepreneur William Z. (Billy) McFarland, two companies he founded, a former senior executive, and a former contractor agreed to settle charges arising out of an extensive, multi-year offering fraud that raised at least $27.4 million from over 100 investors.<p>So the issue is already settled, and the 24.7M is just the fraud, not the penalty.<p>&gt; McFarland has admitted the SEC’s allegations against him, agreed to a permanent officer-and-director bar, and agreed to disgorgement of $27.4 million, to be deemed satisfied by the forfeiture order entered in McFarland’s sentencing in a related criminal case. Margolin, Simon, Fyre Media, and Magnises agreed to the settlement without admitting or denying the charges. Margolin has agreed to a 7-year director-and-officer bar and must pay a $35,000 penalty, and Simon has agreed to a 3-year director-and-officer bar and must pay over $15,000 in disgorgement and penalty. The settlements are subject to court approval.<p>I don&#x27;t know what the forfeiture case involved, but this looks like a slap on the wrist given the numbers involved.<p>EDIT: &gt; McFARLAND, 26, of New York, New York, pled guilty to two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison, and consented to a forfeiture order in the amount of $26,040,099.48.<p>from: <a href="https:&#x2F;&#x2F;www.justice.gov&#x2F;usao-sdny&#x2F;pr&#x2F;william-mcfarland-pleads-guilty-manhattan-federal-court-defrauding-investors-and-ticket" rel="nofollow">https:&#x2F;&#x2F;www.justice.gov&#x2F;usao-sdny&#x2F;pr&#x2F;william-mcfarland-plead...</a><p>That forfeiture does NOT look like a slap on the wrist
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_bxg1almost 7 years ago
Seems like a pretty generous settlement, doesn&#x27;t it? He just had to give back the money. The &quot;permanent officer-and-director bar&quot; is there to prevent him from continuing to defraud people, but he really didn&#x27;t have to pay an actual fine at all.
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narratoralmost 7 years ago
This makes me think of the Chinese social credit score system. What if it actually works and detects these kinds of people and locks them out of the system before they can cause a lot of damage?
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efficaxalmost 7 years ago
failed fyre festival founder, that&#x27;s quite a tongue twister.