EXCLUSIVE: Fyre Festival Was Actually A Ponzi Scheme
The failed Fyre Festival was actually an elaborate ponzi scheme by co-founders Billy McFarland and recording artist Ja Rule, says attorney Ben Meiselas of the Geragos & Geragos law firm in Los Angeles.
“The amount of victims is incredibly numerous, exceeding 1000 people,” Ben Meiselas said on Miami’s 880 the Biz radio station, “who fell victim to what we’ve charitably described as a ponzi scheme.”
“The founders of Fyre Media Inc., Billy McFarland, Ja Rule and a man named David M. Lowe knew from the outset that this was going to be a disaster.”
Anyone who complained about the festival earned a rebuke from Fyre’s legal team. The attorney said:
“Fyre hired an experienced law firm in Washington DC which was sending cease and desist letters to threaten to sue regular attendees for describing the state of affairs on social media.”
Meiselas’ class action plaintiffs who are suing Fyre Media Inc. the concert and app promoter for $100,000,000 in lost ticket fees and damages.
“It was sold as this luxury festival. Attendees were told that this was a private island owned by Pablo Escobar.”
Fyre Festival victims paid anywhere from $1,500 to $100,000 to attend the supposedly exclusive festival, but the scammers didn’t stop there.
Promoters planned a cashless festival, and sold “Fyre Bands” as a form of pre-paid debit card to be used on the remote isle of Exuma in the Bahamas. The California lawyer told me:
Attendees were told you can’t bring money to this island. You can only use this bracelet, the “fyre bracelet.”
They were loading up funds until the very end.
Millions were lost.
Some participants suffered heat exhaustion while stuck on the island situated — just a mile from Sandals Resort — and others left with bacterial infections.
But the Fyre Festival’s organizers plan wasn’t about a single scam, but about leveraging their horrific branding to obtain a major corporate investment, which according to the LA-based Super Lawyer honoree, Fyre Media’s founders were pitching a $90–100 million valuation for their bogus company.:
“What our subsequent investigation has revealed is that the founders of Fyre Festival — Billy McFarland and Ja Rule — as with the help and assistance of certain seed investors, were out for a bigger gain here.”
Fyre Media took out loans with “interest rates of 40% but compound daily with an actual interest rate closer to 100%” and they tried to pay off those personal guarantee loans — to loan sharks and some legitimate creditors — with money from the attendees.
“At the very end of the day, their hope and their goal was that they were going to get this $25 million dollar series A investment from Comcast.”
Shamefully, McFarland and Rule lied to their employees when they didn’t get the big score, and told them that the money had arrived.
Ultimately, Meiselas believes that some of Fyre’s investors may find themselves being held culpable, or potentially some of the highly paid social media influencers who advertised the “festival” without disclosing payments to their followers.
“The critical thing is following the money in terms of who really aided and abetted Fyre Media’s operation.”
Listen to the complete interview here:
