In yet another installment of the Bahamas saga that just won't quit, after numerous lawsuits and payment defaults the not-so-luxury Fyre festival is now being investigated by the FBI for fraud. It goes without saying that this will be the final nail in the coffin that is Billy McFarland and Ja Rule's credibility.
The Times released their full investigation yesterday into what exactly went down both pre and post the Fyre carnage and revealed federal authorities are looking for evidence of "possible" mail, wire, and securities fraud. The publication also obtained a recording from an interview with McFarland and Ja Rule, during which Ja Rule admitted to falsely advertising the festival, but asserts they never sought to defraud attendees and vendors.
When employees asked McFarland and Ja Rule about possible fraud, Ja Rule reportedly disagreed. "That's not fraud, that's not fraud," he said, according to the Times. "False advertising, maybe—not fraud."
The piece, written by Joe Coscarelli, Melena Ryzik and Ben Sisario, is chock-full of little nuggets of gold that give background to McFarland's wheeling and dealing, this one in particular is just incredible:
Mr. McFarland seemed flush enough. "He always had a few thousand dollars cash in his swimsuit," said Luca Sabatini, an owner of Unreal-Systems, which built the festival stages and supplied the high-caliber sound systems and lighting. If someone needed extra cash, Mr. McFarland would dole it out — "$500, crumpled up, a little humid because he went jet skiing with it," Mr. Sabatini observed.
How Fyre searched for liquidity as they desperately burned through funds was also revealed. The Fyre team encouraged ticket-holders to put roughly $1500 on wristbands as currency for the "cashless/cardless" system on the island. It turns out Fyre raised around $2 million via that route, which paid back part of a $3 million dollar loan. If that doesn't scream fraud, what does.
All in all it's a very bleak situation for everyone involved and this Fyre doesn't look like it will die down any time soon. Read the full New York Times story here.
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