01:09 - Source: CNN
Paradise festival turns into nightmare (2017)
CNN  — 

The organizer of last year’s infamous Fyre Festival led a scheme involving bogus tickets while he was awaiting sentencing for wire fraud, New York federal prosecutors said on Tuesday.

William McFarland, 26, has been charged with wire fraud and money laundering in connection with the fake ticket scheme, which defrauded at least 15 customers out of about $100,000, according to a criminal complaint.

McFarland had already pleaded guilty in March to two counts of wire fraud for defrauding Fyre Festival investors and ticket vendors of about $26 million, prosecutors said. He is still awaiting sentencing for those charges, and he had been free on pretrial release since July 2017.

The new charges add further insight into the brains behind the Fyre Festival, the purportedly luxury concert in the Bahamas that has become shorthand for scams in the age of social media.

Manhattan US Attorney Geoffrey Berman said that McFarland “continued to conduct criminal business as usual,” despite his guilty plea.

“It is apparent that he did not stop there,” FBI Assistant Director-in-Charge William F. Sweeney Jr. said. “Today’s charges depict our intolerance for such fraudulent activity, and we will continue to diligently investigate acts such as this.”

The ticket scheme

The two charges announced Tuesday allege that McFarland committed wire fraud by selling fake tickets and that he committed money laundering by trying to illegally conceal his involvement with the company.

The company NYC VIP Access claimed to buy and sell tickets to exclusive events, including the Met Gala, Burning Man, Coachella, the Grammy Awards, Super Bowl LII and a team dinner with NBA star LeBron James. But when customers purchased the tickets, McFarland either did not provide tickets at all or did not provide tickets as advertised, according to prosecutors.

In one instance, the company sold two tickets to the 2018 Grammy Awards for $700 each. The victims flew from Florida to New York to attend but were rejected at the door, according to the criminal complaint.

McFarland also allegedly set up a bank account in an employee’s name in an attempt to hide his own role in controlling the funds, the complaint states.

McFarland was “presented and detained” yesterday on these new charges, Southern District of New York press office confirmed to CNN. He remains in custody.

CNN has reached out to McFarland’s attorneys but did not immediately receive a response.

The Fyre Festival scheme

Billy McFarland, the promoter of the failed Fyre Festival in the Bahamas, leaves federal court after pleading guilty to wire fraud charges, Tuesday, March 6, 2018, in New York.

The Fyre Festival was heavily advertised by social media influencers, including Kendall Jenner and Bella Hadid, as a weekend of paradise among celebrities, private yachts, five-star chefs and star musicians. Star artists Blink-182, Migos, Lil Yachty and Major Lazer all were billed on the festival’s lineup.

Tickets to attend the festival had a price tag to reflect that pitch.

But those who shelled out thousands of dollars for tickets were instead treated to mass disorganization, half-built tents and skimpy food options on a largely undeveloped island. The disastrous festival planning led many of the musical artists to back out of attending, and a number of civil lawsuits were later filed against the organizers alleging fraud.

William Finley told CNN last year that he and three friends spent $8,000 to attend the festival. But when they arrived, they found the housing was little more than unmarked tents, and they struggled to figure out where their luggage had been taken.

“We just realized it was all a complete cluster and nothing was ready, there was no organization, there was no leadership,” Finley said.

Months after the festival’s ignominious end, McFarland was charged with federal wire fraud. Prosecutors said he defrauded at least two investors and used false stock ownership documentation in an effort to legitimize the project.

McFarland “promised a life-changing music festival, but in actuality delivered a disaster,” acting Manhattan US Attorney Joon Kim said at the time.

CNN’s Elizabeth Joseph contributed to this report.