It's been over a year since the Fyre Festival fiasco captured everyone's attention in spring of 2017, but founder Billy McFarland is still dealing with the legal fallout to his fraudulent decisions.
On Tuesday, the Securities and Exchange Commission announced in a press release that McFarland has admitted to defrauding over 100 investors out of $27.4 million, and agreed to settle charges. According to the SEC, McFarland lied about his personal and business financial success—even doctoring a brokerage account statement that made it look like he had over $2.5 million in personal stock holdings. In reality, he had less than $1,500. "McFarland used 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," the statement reads.
"McFarland gained the trust of investors by falsely portraying himself as a skilled entrepreneur running a series of successful media companies," says Melissa Hodgman, Associate Director of the SEC’s Enforcement Division. "But this false picture of business success was built on fake brokerage statements and stolen investor funds.
To settle the charges, McFarland has agreed to a permanent officer-and-director bar as well as a disgorgement of $27.4 million. Grant H. Margolin, his Chief Marketing Officer, and Daniel Simon, an independent contractor to his companies, Fyre Media, and Magnises agreed to the settlement without admitting or denying the charges. Margolin has agreed to a seven-year director-and-officer bar and must pay a $35,000 penalty, and Simon has agreed to a three-year director-and-officer bar and must pay over $15,000 in disgorgement and penalty, according to the SEC.
The settlement comes less than a month after two Fyre Festival attendees were awarded $5 million for compensatory damages in addition to an extra $1 million in punitive damages in their lawsuit against McFarland.
Despite the recent settlements, McFarland's legal troubles have not gone away. In June, he was reportedly arrested on an entirely new and unrelated set of charges related to a ticketing scam. He was charged with money laundering and wire fraud, which each carry maximum sentences of 20 years in prison.