A New York man whose business ventures targeted super-rich, status-seeking millennials was sentenced to six years in prison for defrauding investors of $27.4 million in the disastrous 2017 Fyre Festival and then, while out on bail, running a separate concert-ticket scam.
Billy McFarland, 27, appeared with family members in a Manhattan courtroom on Thursday as U.S. District Judge Naomi Reice Buchwald delivered the sentence. He pleaded guilty in March and July to the separate scams, which the government said were orchestrated to help fund an extravagant lifestyle.
“I can’t believe how wrong I was,” McFarland told the judge before the sentence was handed down. “I can’t believe how stupid I was. I betrayed the trust of my investors, customers, family and the court. My mistakes were severe and they hurt a lot of people.”
Prosecutors had urged a combined sentence of 15 to 20 years, saying McFarland personally profited from fraud schemes that caused "substantial harm to many victims." His defense team asked for substantially less prison time, without making a specific suggestion, largely blaming the scams on McFarland’s mental health and possible delusions of grandeur.
“For the past five years, the defendant has been the consummate con artist,” prosecutors wrote in a sentencing memorandum to the judge. “He betrayed and deceived his investors, customers, and employees while he was living the high life at his luxury apartment, traveling to exclusive locales, staying at luxury hotels, being chauffeured in his Maserati, and entertaining himself and his friends at restaurants, bars, and casinos.”
McFarland admitted in March that he lied to investors who bought a $1.2 million stake in his company, Fyre Media Inc. Authorities said he provided false documents that inflated Fyre’s revenue and altered a stock-ownership statement to make it appear that shares he owned were worth $2.5 million when they were actually valued at less than $1,500.
The ruse allowed McFarland to convince investors he would personally guarantee their investment. Organizers borrowed as much as $7 million in a last-minute bid to fund the doomed festival.
“Whenever he needed more money, he lied to investors to get it,” prosecutors said in a court filing. “Whenever he wanted more money, he gave it to himself from business accounts. Whenever one scheme began to falter, he hatched a newer and more elaborate one.”
In July, while he was out on bail, McFarland pleaded guilty to new charges that he ran a fraudulent ticket business called NYC VIP Access. Prosecutors said he took in more than $100,000 from at least 15 people for tickets to such events as the Met Gala, Coachella and the Super Bowl. He told a judge that he "did not in fact have those tickets in hand."
Quick Cash
The scheme was designed to generate cash quickly to preserve his extravagant lifestyle, the prosecutors said. “He found young and naive employees to interact with customers, accept ticket sale proceeds into their bank accounts, and provide McFarland with cash,” according to the prosecution memorandum.
Before the hearing, McFarland’s lawyer, Randall Jackson, filed a sentencing letter with the court that said his client had been “led astray by poor judgment and by untreated mental illness.” The attorney also highlighted McFarland’s prompt guilty pleas.
“There can be no question that Billy McFarland is guilty of a number of very grave errors,” Jackson said in the court filing. “We can only suggest to the Court that, despite his errors, the available evidence strongly suggests that Billy is a young man who is redeemable.”
Disorder, Alcohol
In seeking leniency for McFarland, Jackson noted that a clinical psychologist who examined the defendant said he may be manic and have a bipolar-related disorder.
Cheryl Paradis, the defense-hired psychologist, “observes that Billy’s behavior has been at least in part fueled by a substantial pattern of severe alcohol abuse, perhaps as a form of self-medication,” according to the defense filing.
McFardland’s lies to investors stemmed from an unrealistic belief that the festival would succeed and a fear of letting down people who had already invested, according to a separate report by forensic psychiatrist Andrew Levin, who also was hired by the defense.
His successful ventures prior to the festival "reinforced his grandiosity and distorted sense that there were ‘no boundaries,’" Levin’s report said. "It was in this context that he developed the unrealistic plans for the festival."
The case is U.S. v. McFarland, 17-cr-00600, U.S. District Court, Southern District of New York (Manhattan).
This article provided by Bloomberg News.
