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It was billed on the internet as a magical Lapland adventure, complete with huskies, elves and a jolly Father Christmas. But a winter wonderland on the Dorset border turned out to be anything but. Yes, South West families who visited the attraction say their children were left in tears by the experience and they weren't weeping for joy.
Families in southern England could hardly contain their excitement when advertisements for a Christmas theme park named Lapland New Forest began appearing in local newspapers in the autumn of 2008. Over 50,000 tickets at £25 each were sold in advance for the self-proclaimed Winter Wonderland, which was scheduled to operate for 26 days during the holiday season at Matcham's Leisure Park near the Hampshire and Dorset border.
The official website for Lapland New Forest contained all inspiring photographs of its many attractions and described the park as a place where "dreams really do come true." The website promised Hollywood-style quality special effects, interactive log cabins, an ice rink, a magical tunnel of light, a nativity scene, real-life reindeer and huskies, and a chance to meet Father Christmas. There would be gifts, toys, and playgrounds for the children, shopping markets, and pop-up vendors for the adults,
Fun for the whole family. The park officially opened on the rainy weekend of November 29th, 2008. Families lined up outside the gate in anticipation. Some of them had driven hundreds of kilometers for a one-of-a-kind experience with the Christmas spirit. But when the doors opened, what those families found was more akin to Halloween. The nativity scene was nothing more than a poorly painted billboard displayed on the inaccessible side of a muddy field.
The log cabins turned out to be cheaply decorated garden sheds, and the ice rink was unusable because they had completely melted due to a faulty power generator. One of the park's main attractions, the Tunnel of Light, turned out to be one six-foot net of light strung between two trees, not even close to what had been marketed to the public. Well, there's a tunnel of light, and I didn't even know I'd even gone through it until I said, oh, look, there's a tunnel of light, and he said, yeah, we've been through that. It wasn't very good.
The playground equipment was cheap and broken. There were only four stalls in the shopping market, which required an additional fee to access, and animals on display appeared mistreated and neglected. One visitor told the BBC, The majority of the huskies were chained up behind a fence, whining. Others were chained up outside some of the wooden sheds with no one looking at them. And the two reindeer, one with a broken antler, were clearly not enjoying their experience. The reindeer were not the only ones having a bad time.
One parent told a reporter that her son began crying when he spotted Santa with his beard pulled down around his neck, hiding behind a port-a-potty, smoking a cigarette. Speaking of Santa, the wait to meet him was reportedly two to four hours long. Children stood in the cold rain for hours only to be told that they were not allowed to sit on his lap when they were next in line. The final straw for one father came when Santa told him that they would need to join a different queue in order for his child to receive a present.
The father marched up to the man in the costume and punched him in the chin. That act of aggression was not an isolated incident either. Throughout the park, patients had been exhausted and tempers were flaring. Two other men exchanged punches in the gingerbread house over the last spoonful of chocolate icing. A worker dressed as a snowman received so much verbal abuse that he quit on the spot and walked out in full costume.
The 32-year-old woman who was hired to play an elf was slapped in the face by an angry man while being called a fraud and a money grabber. After reports of these assaults began to surface, the temp agency who had been hired to staff the park instructed 25 employees to vacate the premises.
On December 4th, just six days into its 26-day run, Lapland New Forest was shut down. It was absolutely appalling. I don't think I've ever been somewhere quite so bad. If you paid £5 to get in, you would think that you paid too much. Only 5,000 of the 50,000 tickets sold had been honoured. Visitors continued to show up to the park to find a large sign posted on the locked gate indicating that the park was closed.
The disappointed crowds and news media watched as trucks loaded with decorations and animals left the park one after another. One worker took a break from hauling packed boxes out of the cabins to address the onlooking crowd. She shouted through the fence, quote, Santa's gone home. Santa's fucking dead. The internet and news agencies were soon flooded with complaints from angry ticket holders, many of whom renamed the park from Lapland Winter Wonderland to, quote, Crapland Winter Blunderland. Peak British humor.
The nativity scene looked like it was plonked in the middle of a war zone, wrote one commenter. This is the biggest scam and a waste of money since the poll tax, wrote another. Many of the ticket holders who felt ripped off contacted the Dorset Trading Standards, a governmental agency focused on consumer protection.
Well, in the four and a half years that Consumer Direct has been going, I mean, this is the second biggest issue that we've encountered. I mean, it is very rare indeed for us to get the volumes of calls that we have had on one particular issue. The owners and operators of Lapland New Forest, brother Victor and Henry Mears, were blindsided by the public's reaction to the park. Victor, the park's director, told a newspaper, quote, On the first Saturday it was open, the weather was atrocious.
I think the public have been treated shabbily, but I do not believe that I'm the architect of that. I would like to point out that 95% of the people who come to Lapland New Forest are extremely happy with it. The concept was marvelous and the idea was brilliant. It was a success by virtue of the fact people spent more than a million pounds. 1.2 million pounds to be exact. But the Brothers Mears would not be keeping it all. After the park was closed, they directed the ticket holders that were demanding refunds to their website.
But instead of information on how to get their money back, visitors were greeted with a statement by Victor Mears that blamed the media and saboteurs for ruining the park. And he claimed that all of the company's funds were missing after having been illegally withdrawn from its bank account. A few days later, the website was taken offline. Of course, the Dorset Trading Standards were watching the Mears brothers' every move.
They were arrested and charged with five counts of engaging in a commercial practice, which is a misleading action, and three charges of engaging in a commercial practice, which is a misleading omission. Victor Mears, who was 67 years old, and his brother Henry, who was 60 years old, denied any wrongdoing. A friend of Victor's named David Bishop defended the brothers, telling the BBC, "...they haven't tried to cheat, they haven't tried to run, they haven't taken money out of the bank."
Victor was in floods of tears the other day when I was talking to him because he felt that he had done something wrong to kids. The trial, which began December 2010, featured both brothers on the stand. Henry Mears admitted that the Christmas market did not meet expectations. He told the jury that he was as surprised as anybody to find so few vendors on site on opening day. He also testified that with a little more work, the tunnel of light could have been as good or better than he and his brother had originally envisioned.
Even still, Henry called Lapland New Forest an exceptional value for the money, and he added, quote, Henry's brother Victor took the stand and repeated his claim from the statement posted on the park's website that the whole thing was sabotaged, and he named Charlie Cooper as the man responsible for it. Charlie Cooper ran a well-known car boot sale at the Matcham's Park site.
Victor Mears referred to him as the King of Gypsies and alleged that he convinced the other traders not to sell their wares at the Christmas festival. Cooper responded by calling Victor Mears a convincing con man and he claimed they had nothing to do with the park's poor planning. Even though he had a motive, Victor had never paid Cooper for the animals and labor that he had contributed to Lapland. "He is using me as a scapegoat," Charlie testified. "They have got the money. They have probably got it somewhere. It's probably under the bed."
At the end of the long nine-week trial, which cost Dorset County over 98,000 pounds in legal costs, Victor and Henry Mears were found guilty on all eight charges. Judge Mark Horton accused the brothers of not showing one scintilla of remorse. He added, "...the failure of Lapland New Forest was caused by the unrelenting greed shown by you and your desire to squeeze every drop of profit rather than build and create the winter wonderland you promised thousands of consumers."
Both of the brothers were sentenced to 13 months in prison and disqualified from serving as directors of any company for five years. About halfway through their sentences in October 2011, Victor and Henry received some interesting news. Their convictions had been thrown out after revelations surfaced that one of the jurors had been exchanging text messages with her fiancé who had been observing the trial from the public gallery. One of those texts consisted of a single word that read "guilty".
Other members of the jury saw the text and notified authorities, and when confronted, the woman admitted to communicating with her fiancé throughout the trial. So the convictions were ruled unsafe, and Victor and Henry Mears walked out of prison six months ahead of schedule. Lapland New Forest is not the first event that over-promised and under-delivered while the organizers stuffed their pockets, and it certainly won't be the last.
A more recent and a well-known example of such an event happened in the spring of 2017 when tech bro Billy McFarland and his shit-eating grin made national headlines as a result of blatant incompetence and horrifying mismanagement. A young entrepreneur gets in way over his head while organizing a failed music festival in the Bahamas at the expense of his investors on this episode of Swindled.
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He started his first company in 2004 when he was just 13 years old, in which he was selling overseas service space, mostly to porn websites, from his parents' house in Short Hills, New Jersey, a community that in 2014 was labeled by Time magazine as the richest town in America. Billy was educated at Pingree, the distinguished private prep school that has a current endowment of $86.9 million dollars.
His classmates remember him as being one of the cool kids. They say he was popular and likable, and he could get along with anybody and talk anyone into anything. After graduating high school, McFarland enrolled at Bucknell University in Lewisburg, Pennsylvania to study computer engineering. But he dropped out nine months into his freshman year when he dreamt up the idea for a new social media website called Spling. Billy envisioned Spling as a place where people could share what interests them.
Music and photos and videos would be passed around in circles of friends, and they would be served advertisements based on those interests. Billy was excited about the idea, and so were investors. Spling raised a significant amount of venture capital, and young CEO Billy McFarland was well on his way to becoming a successful entrepreneur. The site launched on April 15th, 2011. The company's offices were moved from Philadelphia to New York.
Billy was ready to connect the world. And then, two months later, Google+ happened. Kinda. Google+ was the search engine giant's new social media platform that organized friends and acquaintances into circles just like Spling. So, unfortunately for Spling and its stupid name, all interest was lost. But Billy McFarland landed on his feet. A little more than two years later, yet another entrepreneurial epiphany.
It's a card. It's more than that, but let's take it back to where it all started. Okay. So I'm a technology entrepreneur, but I've always really been interested in payment tools and credit cards. And I was at dinner with 10 or 15 other entrepreneurs. We all pull out our random debit and credit cards to split the bill. And I see this hodgepodge, these blue Chase cards, these red Bank of America cards. And I asked everybody how they chose their bank and how they chose their credit card. And every single person said they picked their bank based on location to their first apartment in New York City.
Okay. Tell me more. Who?
Who cares? Get to the point, Billy. So I think the most important thing to look at is you take someone my age, mid-20s in New York City, probably the only thing on us that we carry around that isn't relevant and doesn't reflect who we are is our debit or credit card. In August 2013, Billy McFarlane unveiled his latest creation, Magnesis, a credit card that wasn't really a credit card. It was more like a social club or something where all the members were young and hip and beautiful and New York.
It worked like this. Members who paid the $250 annual fee were given a black, heavy, stainless steel card that connected to their existing bank accounts. There were no lines of credit or reward system of any kind. A Magnus' card was completely for appearances. I'm sure the tired waitresses were very impressed, but handing over your Magnus' was not a display of financial clout.
The card's main purpose was to grant members access to an exclusive club, which included a concierge service that could help you score tickets to the hottest events in New York and reservations to the most exclusive restaurants. Magnesis members were also granted access to a private West Village townhouse that hosted parties, wine tastings, art shows, and dinners. Billy advertised that Magnesis was about community, except not everyone was invited.
Potential members filled out an online application that asked for your favorite restaurants and favorite places to shop. The next step was a phone interview and a thorough Google search of the applicant's name. If you made it to the next round, you would be invited over to the communal townhouse to hang out. After that, Magnesis staff would have a meeting of the minds to determine if you were "cool enough." The average Magnesis member was between 25 and 35 years old. Over half of them had attended top 50 schools.
More than 80% of them earned over $75,000 a year by working in glamorized industries such as fashion, finance, and tech. Magnesis wanted to fill its ranks with "experienced seekers and influencers" or as I like to call them, douchebags. And there are a lot of them, apparently. Three years after the launch, Magnesis had more than 40,000 members across New York, DC, and San Francisco.
members who thought their personalities and lifestyles were somehow enhanced by the type of credit card they had in their wallets. The company organized private concerts, networking events, fashion shows, and more, where its status-oriented millennial members were given the opportunity to rub shoulders with celebrities like Rosario Dawson, rapper Wale, and this guy. Remember him? That's Ja Rule, late 90s, early 2000s hip-hop sensation.
Billy took such a liking to Ja Rule, whose real name is Jeffrey Atkins, that he recruited him to help him promote the Magnesis brand. The two appeared together on Bloomberg TV and Fox Business and other networks to shed some light on what this was all about. It's a very unique situation. Whenever you can marry the affluent with the less fortunate, you get the birth child, which is called hip hop.
This is called the credit card. This is a credit card. But, you know, when you marry those two worlds together, you get something very special. Where is the affluent? Where is the less fortunate in this? Because this is... Go ahead. Hip-hop. Okay. It brands things in a different way because we speak to the less fortunate. We are the voices of the have-nots. But we are also those voices that came from something very dark and something very, you know...
There you go. Magnesis became profitable in 2015, but not even Ja Rule could keep everybody happy.
The crowdsourced review website Yelp was soon littered with negative reviews by several of its members, who warned of canceled trips and events, broken promises, scheduling issues, and unwanted charges to their credit cards. Pierce from Hoboken wrote, Rarely in life does a restaurant or service provider let you down so thoroughly and consistently that you rank them among your greatest regrets in your entire life, but that's truly how I feel about magnesis. No hyperbole.
Billy McFarland addressed the allegations and blamed Magnus' issues on its meteoric rise, saying, quote, We've hit some roadblocks along the way, and that's what happens when you grow really quickly, and that's on me. To make matters worse, the company was being sued for $100,000 by the owner of the Magnus' townhouse. The landlord was accusing his tenants of maliciously vandalizing the property and hosting, quote, blowout parties with up to 500 guests at a time.
The lawsuit alleged that most of the kitchen appliances had been damaged or destroyed and that overall the townhouse was in quote "a state of total disrepair, rubble and disarray." When asked to comment about the lawsuit, Billy replied, "We outgrew the space." Meanwhile, the customer complaints were growing louder and magnesis had been slapped with an F-grade from the Better Business Bureau. So naturally, it was time for Billy to expand into other industries.
Billy McFarland and his new buddy, Ja Rule, partnered to create Fire Media Incorporated in 2015. The new company introduced a smartphone app that streamlined the process of booking musicians, celebrities, models, and other entertainers for private events. With Billy's tech background and Ja Rule's entertainment connections, the duo had a sure winner on their hands. They just needed to come up with an idea on how to build awareness about their product.
As luck would have it, that idea came to them during a shared flying lesson in which they were forced to make an emergency plane landing in the Bahamas. While the plane refueled, Billy and Mr. Rule explored the scenic shoreline of the Great Exuma Island. You know what would make this place even better? Billy must have thought to himself. A bunch of noise and people. This place needed a music festival. But not just any music festival. It would be a luxury music festival.
A more elite Coachella that would attract those privileged millennials who were intoxicated on their own wanderlust. It would be the most Instagrammable event in history. It would be used to promote the Fyre Media booking app, and it would be called the Fyre Festival. It would be a complete disaster. On December 12th, 2016, the social media promotional campaign for the Fyre Festival was unleashed.
A promotional video featuring supermodels like Bella Hadid, Emily Ratajkowski, and Hailey Baldwin prancing around a tropical beach and sailing on a yacht with a dance music backing track went viral. Text appeared on the screen that read "Welcome to the Fyre Festival." It promised two transformative weekends of an immersive music festival on a remote private island in the Exumas that was once owned by Pablo Escobar. It promised the best in food, art, music, and adventure.
FIRE referred to itself as an experience and festival that was "on the boundaries of impossible," a statement that would later prove to be very prescient. The festival was scheduled to take place over two weekends in April and May 2017. Each day would begin with morning yoga classes and guided meditations on the beach. Festival goers would have access to massages, a henna tattoo booth, sound healing, and "chill out sessions."
But the main draw of the festival were the evening concerts featuring artists handpicked by Billy McFarland, a man who had his fingers on the pulse of musical culture. I think the most interesting thing about music right now is that everybody loves music. Okay, maybe not. Guests would be treated to headlining performances by artists such as Migos, Major Lazer, Pusha T, and Blink-182.
And believe it or not, people were actually excited about this. It's going to be a luxury experience with Blink-182, Migos, and a ton of great performers. And it's going to be the next coolest thing. And guess what? It's only 500 bucks.
I was like, dude, this looks like a total scam. I don't know. We looked into it a little bit more. It looked like a real legit thing. So we bought tickets on the spot and went. The cost to attend the fire festival ranged from the early bird group rate of $500 to the $12,000 VIP package, which included a private flight from Miami, meals prepared by celebrity chefs, and lodging in a modern eco-friendly geodesic dome on the beach.
Sales were good. Almost 5,000 tickets were sold as soon as they were available. More than 7,000 people were expected to attend. The promotional campaign for the festival was funded by investments that Billy had secured from people like Corolla Jane, the wife of a hedge fund manager who loaned Fire Media $4 million. Billy blew most of the funds almost immediately by leasing a luxurious office in Tribeca and hiring models for the video.
Kendall Jenner and other celebrities with large social media presences were paid up to 250 grand just to post a photo of the fire festival's flame logo that linked to the video. However, neither Jenner nor any of the other people hired to advertise the festival had disclosed that they were being paid to do so, which is a violation of federal law. So, to avoid any legal entanglements, most of the celebrities eventually deleted the post. Billy wasn't worried about money because he had something in the works.
Comcast, the global telecommunications company, was considering investing $25 million into the app in exchange for a 10% stake in ownership. Billy planned to use that $25 million to finance the Fyre Festival. The only problem was that Billy was unable to provide sufficient proof to Comcast that his company was worth the $90 million that he had claimed in his pitch. So Comcast backed out of the deal without investing a penny. But that didn't stop Billy from lying to his employees.
He went back to the offices of Fire Media and told everyone that Comcast had agreed to invest $20 million into the company. After already spending most of his funding promoting the event, Billy and his team turned their attention to planning and logistics. McFarlane had no experience staging a festival, so he began making calls to companies that did. When Billy was told that an overseas event of that magnitude could cost up to $12 million, he scoffed and hung up the phone. Billy would do it himself.
He opened Google on his web browser and searched for "how to run stage." One of the executives who had spoken to Billy about organizing the event would later describe the young entrepreneur as having a quote "complete detachment from reality." As the festival day drew closer, it became more apparent that the event was both doomed and completely mismanaged. Artists weren't getting paid. Tour managers were experiencing significant problems coordinating with the fire staff.
The company's payroll system was a mess. The caterer canceled. The website disappeared because they forgot to pay the web designer. And the site where the festival was to be held, the former property of Pablo Escobar, was discovered to not even exist. Instead, Bahamian authorities gave the festival access to a site at Roker Point, a developing area with very little infrastructure. Instead of privacy, the festival would take place minutes away from a sandals resort.
Instead of beautiful oceanfront access, workers were hired to create a beach by scattering sand over the rocky terrain. Sand that reportedly contained millions of sand flies that would bite anyone that crossed their path. Many of the fire staff members could recognize the inevitable train wreck and resigned, which forced Billy to finally recruit some help two months before the festival's first weekend.
In March 2017, Fire Media hired a veteran event producer by the name of Yaron LeVai, who was confident that he could bring Billy McFarlane and Ja Rule's vision to life, just not in the span of two months. LeVai recommended delaying the event until November, but Fire executives refused. LeVai was told that the Fire Festival would happen in the spring no matter what, so the event producer told the company that there was no way they would be able to build the temporary villas of geodesic domes in that time frame.
He told them that the festival goers would have to sleep in tents instead, and he told them to notify the ticket holders about the change. Fire media told LaVie that an email was being prepared, but it was never sent. Later in March, the fire crew arrived in the Bahamas for a final walkthrough of the festival site. After seeing the dilapidation with their own eyes, the event's organizers called an emergency meeting to further analyze the plan and the budget. They decided that the best idea would be to delay the festival until 2018.
But when this message was delivered to the executive team, it did not receive a warm response. Instead, a guy on the marketing team encouraged the executives to stay on course. He stood up and said, quote, Let's just do it and be legends, man. And then everybody jumped in the air to high five. Probably. The Fyre Festival was going to happen, and a fancy dinner was organized to celebrate this fact.
Ja Rule, who had spent most of his time in the Bahamas floating in a yacht offshore, raised a glass and recited me and Billy's favorite toast. And this is me and Billy's favorite toast. And it goes to all of us in the world. Here's to living like movie stars, partying like rock stars, Billy. And fucking like Marsar.
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On the morning of April 27th, 2017, festival attendees began arriving to Exuma International Airport on chartered flights from Miami. They were taken to an impromptu beach party away from the festival's main site that featured loud music and free tequila shots from hired models. Attendees were reportedly stuck there for up to 12 hours before they were finally transported to the festival grounds.
We got to the actual festival location, it was 10 o'clock. And right when we got there, we realized this was not going to be a real thing. Guests were forced to rifle through piles of luggage that had been dumped from shipping containers onto the unfinished gravel lot. Instead of gourmet meals, they were given pre-packaged sandwiches that consisted of nothing more than a slice of wheat bread and cheese and a couple of pieces of lettuce in a styrofoam container. There was no water and no medical staff, but there were plenty of feral dogs.
Guests were told they couldn't even swim in the ocean because of a, quote, rampant shark problem. There was no showers, there was no bathrooms, there was no running water. Basically the exact opposite of everything we were promised. They basically abducted us. There was no cell phone or internet service and only three working showers. No communal bathrooms, only plastic portable toilets, many of which had been knocked over from the prior night's storm.
the same storm that toppled many of the disaster relief tents where attendees were supposed to sleep. And the lucky few who were able to secure a tent walked in to find dirt floors and soggy mattresses and most of their belongings missing. At one point, Billy McFarland climbed on top of a table in an attempt to restore order, but actually accomplished the opposite by yelling for the crowd to grab any tent they could find. Mass chaos ensued as people scrambled for shelter.
Meanwhile, many of the artists scheduled to appear at the festival began canceling. Blink-182 sent out a tweet that said they would not be there because they were not confident they would have what they need to give their fans a quality performance. And surprisingly, they weren't referring to talent. Honestly, once we got there and we saw the reality, our main goal then became to get out and go back to Miami. At least that was my goal. Some of us did really make the best of it. But my goal was to get out of there and...
Some of the festival goers were able to make other arrangements like renting a house or a yacht to make the most of their time in the Bahamas. Others headed straight for the airport to find that most of the return flights had been cancelled. The first flight back to Miami did not depart until 1:30 in the morning. Passengers were stranded in the airport for hours. They were even locked inside with chains on the doors. The next morning it was announced that Fyre Festival had been officially cancelled.
The announcement tweet read, Due to unforeseen and extenuating circumstances, Fyre Festival has been fully postponed. After assessing the situation this morning and looking at the best options for our guests, we cannot move forward as we hoped we could. At this time, we will be working tirelessly to get flights scheduled and to get all travelers home safely. Before long, Billy McFarlane was on TV, giving interviews and making excuses, trying to explain to the world what exactly happened.
A big storm came through and busted our water system and affected half of the housing tents. We took a big jump here and a big risk and V1 has failed. But the world already knew what happened. The world was watching with glee as images of the inconvenienced rich flooded Twitter timelines and Snapchat stories. One user tweeted, quote, I can't figure out what Fyre Festival is, but it seems like rich people having a bad time, which I fully support.
Another woman tweeted, quote, I've always dreamed of building elaborate death traps that attract the 1%, but Fyre Festival actually went and did it. Kudos. One festival attendee fought back and wrote, We have been locked indoors with no air, no food, and no water. People are fainting and all you can make are rich kid jokes. He had a point. There was something disturbing about the widespread mockery of the festival attendees' misfortunes, even if it happened to be a group of the most fortunate.
As privileged as one would have to be to pay $12,000 for a fun weekend getaway, these people were still somebody's sons and daughters. Despite the circumstances, there were no deaths nor major injuries at Fyre Festival, a statistic for which the unlucky attendees should be commended. The festival goers behaved admirably in what was in reality a very scary and dangerous situation. Hours after the festival's cancellation, damage control was already underway.
Ja Rule took to Twitter to let everyone know that Fyre Festival was "not a scam" and that what happened wasn't his fault, but he planned to take full responsibility anyway. Billy McFarland told the New York Times that it was the hardest day of his life. He said that even though the media coverage had been sensationalized, he had underestimated the challenges of building a city out of nothing. Fyre Media posted an official statement on its website to blame the island's infrastructure for the festival's failures.
and it announced that all attendees would be given the choice between a full refund or VIP tickets to next year's festival. The Bahamian Ministry of Tourism also issued an apology for how the events unfolded, but it too claimed no responsibility. So a lot of people both saying we're sorry, but that really these events were beyond our control. I think what really did happen is utter disorganization, and all because of grief.
In early May, reports began to surface that neither fire employees or contractors had been paid. Contractors like Luca Sabatini, whose company supplied the sound systems and stage lighting, he claimed to have lost over $10 million worth of equipment during the fiasco. Ian Nicholson, a local Bahamian carpenter and father of three, had worked 18-hour days trying to ready the festival site and was never paid.
While Ian waited for the five grand he was owed from Fyre Media that never came, the lights and water service at his house were shut off. This was just the beginning of the Fyre Festival's financial fallout. It became public knowledge that Comcast had never invested in the company. Vanity Fair revealed that the festival was funded with seven million in loans that Billy had borrowed from multiple investors. One of these loans owned by investor Ezra Birnbaum contained heavy stipulations.
Not only was there a 120% interest rate, Billy had agreed to pay half a million within the first 16 days of the loan's inception. Business journalist Brian Burrow speculates that this loan was the reason that Billy proceeded with the festival in the face of insurmountable obstacles. Billy's plan to repay the loan was to market the festival as a cashless environment.
Instead of using cash or credit cards to purchase food and drink and merchandise while on the festival grounds, attendees were encouraged to preload their scannable wristbands with up to $1,500.
The six emails that McFarland had sent to ticket holders to persuade them to load their wristbands were effective.
He collected over $760,000 in prepaid cash that was never spent at the festival and was never refunded. Billy didn't even use the money to repay the first installment of the loan from Ezra Birnbaum as he had originally intended. The $760,000 just vanished. Only Billy McFarlane knows what happened to it. Ezra Birnbaum sued Fire Media when Billy defaulted on the loan.
It was the first of what would be a total of six federal and four individual lawsuits that the company would face as a result of the festival, including a $100 million class action lawsuit that is currently making its way through the courts. But lawsuits were the least of Billy's worries.
Billy McFarland, the founder of the Fyre Festival, has been arrested and charged with wire fraud. Prosecutors allege McFarland used false information to get investors to put in $1.2 million into the festival. On June 30, 2017, federal agents knocked on the door of Billy McFarland's $21,000 a month penthouse apartment in Manhattan and placed him under arrest. He was charged with two counts of wire fraud.
Prosecutors allege that Billy defrauded his investors by making false statements about how much FireMedia was worth. Billy claimed that his company was valued at $90 to $105 million, but FireMedia's true value was nowhere near that. Prosecutors allege that Billy's valuation was, quote, "...completely untethered to any financial reality."
Billy had a hunch that nobody would be willing to invest in the festival if they knew his company's true worth, so he falsified documents that showed millions of dollars in income from talent bookings when, in reality, Billy's company had only earned a little more than $57,000. He also doctored a personal Scottrade investment statement that said he owned 2.5 million in shares of a certain company. In reality, Billy's shares were only worth $1,500.
According to U.S. Attorney Christy Greenberg, the Fyre Festival was just the latest con in Billy McFarlane's long-running pattern of deception, dating back to his days running Magnesis, where he routinely overpromised luxury experiences that were never delivered. This time, he used the phony valuation of his company and inflated assets to secure $26 million in investments from 80 different investors. Billy McFarlane was facing up to 10 years in prison.
He posted the $300,000 bail the next day after he was arrested and he was released. Billy's partner, Ja Rule, was not implicated in any crimes. In March 2018, McFarland pleaded guilty to the two counts of wire fraud and agreed to forfeit $26 million. He apologized to his investors, his co-workers, and his family while he tried to explain his actions, saying, "...I grossly underestimated the resources that would be necessary to hold an event of this magnitude."
In an attempt to raise what I thought were needed funds, I lied to investors about various aspects of Fire Media and my personal finances. Those lies included false documents and information. Billy would remain free on bail until his sentencing date, which was scheduled for June. But instead of returning home and keeping his nose clean, Billy McFarland went right back to work.
He created a new company called NYC VIP Access to begin selling fraudulent tickets to high-end events like the Super Bowl and Burning Man and the Victoria's Secret fashion show. He was able to rip off 30 people for $150,000 in the short amount of time he was out on bail. When the FBI discovered his newest scheme, Billy's bail was revoked. He would remain in jail until he was sentenced on October 11th, 2018.
Billy was now facing three counts of wire fraud, one count of bank fraud, and one count of lying to investigators, which, in total, carried a maximum sentence of 20 years. Billy begged the judge for leniency. He told the judge that he had been recently diagnosed with bipolar disorder, which he said went untreated for years and prevented him from knowing the difference between right and wrong. Judge Buchwald dismissed that notion. She told Billy that his bipolar disorder did not excuse his behavior.
She told the court, quote, It is my conclusion, based on all the submission, that the defendant is a serial fraudster and that to date his fraud, like a circle, has no ending. Billy McFarlane was sentenced to six years in prison. The Billy I knew at the beginning changed entirely. At the beginning, he was this young kid from a nice family out in Jersey. He kind of progressed into somebody who was scamming and lying. It's sad.
You know, when they come to New York, the bright lights, some people can fake it till they make it. And other guys, well... Swindled is written, researched, produced, and hosted by me, a concerned citizen, with music by Ethan Helfrich. For more information about the show, visit swindledpodcast.com and follow us on Twitter, Facebook, and Instagram, at Swindled Podcast. If you want to support the show, you can do so by going to patreon.com slash swindled.
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where new stuff gets added all the time. So go check that out too. Finally, I'm excited to announce that Swindled will be at the first annual True Crime Podcast Festival on July 13th, 2019 in Chicago, Illinois. The festival is specially designed around your desire to meet some of your favorite podcasters from shows like Sword and Scale, Canadian True Crime, Southern Fried True Crime, The Fall Line, True Crime Finland, True Crime Sweden,
All crime, no cattle from Texas. That includes Shay, who helped me out for this episode. People are coming from all over the world. There will also be panel discussions and live episode recordings and cool stuff like that. For ticket and hotel information, you can go to tcpf2019.com. Prices do go up the closer we get to the event, so don't wait. And make sure you mention Swindled on the ticket registration survey. Thank you. I'll see you there. No pictures.
That's it. Make sure you stay tuned to hear promos from other independent podcasts and go support them. They're really good. Thanks for listening. I'm Jamey's mother. But what he says is lies.
Babies will be ripped away from their parents. It's hurtful to see them and know that their lives could have been much different in a home outside of there. In the power phone? Well, they'll be held accountable. As a district attorney, it's probably better for me not to come in. Survivors are not holding back, and the church is not backing down.
Many in the media have tried to get in front of the accused cult leader, Jane Whaley, and have failed. We have asked you to leave. But somehow, I got in. How are you, sir? Yeah, I'm here to speak with Jane Whaley. She invited me to service today. This season, we're going deeper into the Word of Faith Fellowship than ever before.
This story is on a collision course, and it's not going to end well. Why would anybody want to harm him? Sometimes we hurt other people by hurting people they love. Pretend Radio, Season 3, The Prophet. What's the matter with us? We're not going to burn. God, we are the prophet.
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