Fyre Festival Founder Settles With SEC For $27.4 Million

Billy McFarland leaves federal court after pleading guilty to wire fraud charges, in New York.

Billy McFarland, the architect behind the luxury festival scam Fyre Festival, has settled with the SEC for $27.4 million, which is the amount he raised from over 100 investors for his various companies. The Fyre Festival scam was so egregious, and became so notorious on social media, "Fyre Festival" has become a new term for a rip-off. The multi-sensory luxury influencer festival on an island in The Exumas took place last April, where expensive cabanas turned out to be disaster relief tents, a "culinary experience" was bread and cheese and none of the employees were even paid.

In May of last year, the Southern District of New York and the FBI launched an investigation into the Fyre Festival, and McFarland pleaded guilty to fraud. Back in June, he was charged with yet another fraud, offering fake tickets to events like Met Gala, Grammy Awards, Coachella, and Burning Man, and using his Fyre Festival email list to con victims. According to the SEC press release, McFarland defrauded investors by lying not only about the success of his companies, but his own personal net worth. He claimed that he had stock holdings of $2.5 million, when in fact his shares were worth less than $1,500. He used these investor funds "to bankroll a lavish lifestyle including living in a Manhattan penthouse apartment, partying with celebrities, and traveling by private plane and chauffeured luxury cars," according to the release.

“McFarland gained the trust of investors by falsely portraying himself as a skilled entrepreneur running a series of successful media companies. But this false picture of business success was built on fake brokerage statements and stolen investor funds,” said Melissa Hodgman, Associate Director of the SEC’s Enforcement Division.

Grant H. Margolin, McFarland's Chief Marketing Officer, and Daniel Simon, an independent contractor to his companies, were also charged by the SEC. Simon, who has known McFarland since high school, worked with all three of McFarland's companies, Fyre Media, Magnises and the Fyre Festival.

The SEC complaint is quite blunt about the roles of Margolin and Simon in all of this. "Margolin and Simon created certain documents at McFarland’s behest that inflated operational and financial metrics of Fyre Media and Fyre Festival, without inquiring into the accuracy of information provided to them by McFarland or exercising the care and skill that a reasonable person of ordinary prudence and intelligence would be expected to exercise under the circumstances."

Hulu is producing a docuseries about the Fyre Festival, and co-director Jenner Furst told Gothamist that she believes that even more scams from McFarland will come to light. "We have a whole dossier of potential leads as to other allegations and as to other potential crimes," said Furst. Good times.