It looks like Billy McFarland might soon have a date with the FBI.
The founder of the disastrous Fyre Festival is being investigated by federal authorities, according to a recent report in The New York Times, facing charges of possible mail, wire and securities fraud. McFarland, rapper Ja Rule and investors like Carola Jain are being scrutinized by the United States Attorney’s office for the Southern District of New York and the FBI, according to the report (which is based on anonymous sources). The case is even “being overseen by a prosecutor assigned to the complex frauds and cybercrime unit.”
A criminal investigation and possible conviction seems like the natural outcome of the highly-publicized festival implosion, which resulted in at least eight lawsuits and claims from the production manager that $10 million worth of equipment is stuck on in the Bahamas over unpaid customs bills.
FBI investigators will likely look into claims by ticketing company Tablelist that Fyre organizers asked for and received $3.5 million in advances and even encouraged fans to use their credit cards to fill up cashless wristbands prior to the festival.
“Those wristbands were merely a stopgap solution to help the company’s cash flow, according to two employees with knowledge of the accounts,” the Times reports. “They said that the Fyre bands took in nearly $2 million; some of that money, according to another lawsuit, went to pay back part of a recent $3 million loan.”
The prospect of an FBI investigation was first mentioned right after the festival, when MacFarland and Ja Rule held a conference call with employees, telling them they would no longer be getting paid. After hearing the news, one employee asked what to do if contacted by federal authorities.
“I don’t know, I think that’s an individual thing,” McFarland stutters, “I’m not sure. The company has counsel who I am happy to loop you in with.”
On the same call, McFarland instructed his employees not to erase any files on their computers because of pending legal actions.
“With all the notices that we have in place, it’s imperative that we keep our files in place,” McFarland can be heard telling staff on audio of the phone call.