Fyre Organizer Arrested Again for Allegedly Defrauding Wealthy Clients with New Company

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McFarland faces charges that he sold red carpet tickets he didn’t have while out on bail

 

As if once were not enough, William McFarland allegedly targeted the richest Fyre Festival victims a second time for yet another celebrity-filled fantasyland that did not exist.

According to Special FBI Agent Brandon Racz, McFarland induced some 15 customers to wire money for tickets that included red carpet seats and invitations to the after-parties of some of the most prestigious and high-profile events in the nation. However, no such tickets existed and McFarland reportedly pocketed the estimated $100,000 in proceeds while out on pretrial release from federal custody since July 2017.

When ticket buyers asked for a refund, there was no money.The Fyre Festival was forced into bankruptcy with an involuntary Chapter 7 petition on July 7, 2017, by investors John Nemeth, Raul Jimenez and Andrew Newman. 

“He made no efforts,” said Jonathan Mandel, a criminal defense attorney in Los Angeles. “It’s even more egregious that he’s out on bail and should be on good behavior with a pending case. There was no way for him to get away with it.”

The 26-year-old was arrested on Tuesday and charged with one count each of wire fraud and money laundering. On March 6, McFarland had already plead guilty to wire fraud involving the famed Fyre Festival in the Bahamas.

“We all thought this would be the last we’d hear about McFarland until his scheduled sentencing,” said Alison Rudansky of Pardalis & Nohavicka law firm in New York City. “But this latest crime is a serious one. He defrauded innocent victims through wire communications and directed wire transfers of funds to be sent over state lines.”

McFarland reportedly asked an employee of his new company NYC VIP Access to identify “Fyre Festival attendees with the highest salaries as prospective NYC VIP Access customers” and employees would then cold call using a script to solicit them to purchase tickets for high-profile events, such as the 2018 Grammy Awards, the 2018 Met Gala and Burning Man 2018.

But this time, McFarland, who was forced into involuntary bankruptcy on July 17, 2017, by three of his investors, hid his involvement in NYC VIP Access by allegedly asking an employee to be the face of the company because “bad press surrounding the Fyre Festival that tarnished his reputation.”

“As the criminal case is brought on behalf of the people by the government and the bankruptcy proceeding is brought by private individuals, the criminal case will take priority,” Rudansky told PacerMonitor News. “So long as the criminal case doesn’t procedurally interfere with the bankruptcy case, the bankruptcy case will continue as is.”

According to Racz’s sealed complaint filed in the Southern District federal court of New York, all of McFarland’s business accounts were in the red, including deficits of $9,826.28 for NYC VIP Access, $62,543.02 for Magnises, $519,030.00 for William McFarland and $767,641.76 for the Fyre Festival account.

“McFarland instructed and caused ticket sale proceeds to be sent to a bank account belonging to Employee-1 or a mobile payment service belonging to another employee,” Racz reported to Assistant U.S. Attorney Kristy J. Greenberg.

“McFarland wanted to hide his affiliation with NYC VIP Access because he feared that the bad press from the Fyre Festival and his criminal prosecution for alleged fraud related to the Fyre Festival would prevent NYC VIP access from being successful.”

“Had there been positive account balances available for refunds, it would lessen the seriousness of the penalty and would mitigate the intent to defraud,” Mandel told PacerMonitor News.

There will be a bail revocation proceeding next week before Judge Buchwald now that McFarland has been presented and detained in magistrate court.

“He cheated some of the most sophisticated and richest people in the world, most of whom who have connections,” Mandel said. “What he did was so antisocial.”

In essence, the marketing mastermind effectively swindled away the sliver of a chance he had to redeem himself while out on bail.

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