The US tech entrepreneur admits to using “false documents and information.”
The tech entrepreneur admitted in a federal court in Manhattan on Tuesday (March 6) to defrauding 80 investors in Fyre Media, the company behind the luxury Bahamas festival, while using fake documents to claim a $3 million bank loan. Investors poured more than $26m (£18.7m) into the company.
With ticket prices ranging from $12k to $100k, McFarland’s private island getaway descended into chaos last April amid reports of “refugee-like conditions” from festival-goers. In May, the FBI began investigating Fyre Media for fraud charges. McFarland was arrested in June.
“I grossly underestimated the resources that would be necessary to hold an event of this magnitude,” he told US District Judge Naomi Rice Buchwald. “In an attempt to raise what I thought were needed funds, I lied to investors about various aspects of Fyre Media and my personal finances. Those lies included false documents and information.”
The two counts of wire fraud carry a maximum of 20 years in prison each. McFarland initially pled not guilty to the charges in November, but under the plea agreement would face a sentence of eight to 10 years, and a fine of up to $300,000.
On top of the fraud charges, McFarland and festival co-founder Ja Rule were hit with a massive $100 million class-action lawsuit in May. Ja Rule has reportedly not been arrested.
McFarland’s sentence is scheduled for June 21.