The United States Security and Exchange Commission announced Tuesday (7/24) it has settled charges against Fyre Festival founder Billy McFarland and his associates. New York entrepreneur McFarland, along with two companies he founded (Fyre Media and credit card company Magnises), a former senior executive and a former contractor were charged with fraud for misleading over 100 investors into providing at least $24.7 million for their failed businesses.
The SEC’s complaint alleges that McFarland — with substantial help from Chief Marketing Officer Grant H. Margolin and independent contractor Daniel Simon –fraudulently persuaded investors to dump money into his companies in connection to the destination Fyre Festival set to take place last April in the Bahamas.
Fyre Festival was touted as a luxury destination festival set for two weekends between April and May of 2017. Promoted by Fyre Media and rapper Ja Rule, the event fell short of its promises of extravagant VIP accommodations, curated culinary offerings and much more when attendees arrived at the unorganized event on the island of Great Exuma.
The complaint adds that McFarland and company convinced investors to entrust them with tens of millions of dollars by “fraudulently inflating key operational, financial metrics and successes of his companies, as well as his own personal success.”
According to the investigation into the fraud charges, McFarland deceived investors by providing doctored account statements showing personal stock holdings of $2.5 million when in reality the account only held shares worth under $1,500.
“McFarland gained the trust of investors by falsely portraying himself as a skilled entrepreneur running a series of successful media companies. But this false picture of business success was built on fake brokerage statements and stolen investor funds,” said Melissa Hodgman, associate director of the SEC’s Enforcement Division in a release.
The SEC claims McFarland used investor funds to bankroll a lavish lifestyle of living in a Manhattan penthouse, partying with celebrities and traveling via private planes and chauffeured luxury cars.
McFarland has admitted to the charges against him and has agreed to pay back the $24.7 million he illegally gained. In addition, McFarland agreed to a permanent officer-and-director bar, meaning the failed entrepreneur will never again be allowed to hold an officer or director position at a public company.
Margolin, Simon, 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 repay over $15,000 in illegally obtained funds and penalty.
This article originally appeared on Billboard.