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Imagine you see a video on Instagram: it’s Bella Hadid, Emily Ratajkwoski, Hailey Bieber,
and other elite influencers, all having the time of their lives in the Bahamas, with beach,
concert, and party scenes. Even if you don’t know it, you want to be there.
The video is an ad for the most luxurious and exclusive music festival ever: the Fyre
Festival. When Kendall Jenner posts about it, it’s officially an internet phenomenon.
It goes viral, social media goes crazy, and millennials get their bank accounts ready
to buy tickets for thousands of dollars, as they don’t want to miss out.
Weeks go by and no one hears news of the festival production, only more marketing goodness and
beauty. The day arrives and thousands of youngsters start heading to the island of Great Exuma,
in the Bahamas, filled with illusions and excitement.
But as they arrive, they discover one of the most infamous scams of recent times. The luxury
villas and just everything that was promised, didn’t exist. In exchange, they have to
fight for a tent to spend the night, trapped in an island where their dreams turn into
nightmares.
Welcome to Company Forensics: Fyre Festival.
Let’s start talking about the brain behind the Fyre Festival fraud, Billy MacFarland.
We have talked about some of the most iconic con artists of modern history in this show.
Bernard Madoff, Elizabeth Holmes, or Billy McFarland. They all have something in common:
a natural talent for getting tons of money out of nothing but lies.
Check out those episodes if you haven't. You'll find that these characters don't know how
to stop or take a no for an answer until they face federal justice.
But back in 2013, in his early twenties, Billy McFarland was something like a New York tech-bro.
An ever-excited startup CEO who had raised venture capital and was chasing the next big
thing.
The peculiar startup he ran by then was called Magnises, and looking back at it; things were
already sketchy by then.
Magnises was supposed to be the millennial version of the American Express black card,
except that it wasn't a credit card. It was nothing but a cool-looking, black metallic
duplicate of your good old plastic so that you could swipe with style at the club or
Starbucks.
For $250 a year, you'd get the Magnises card and access to an exclusive community of young,
beautiful business people, but also entertainment personalities, all hanging out in a townhouse
in West Village, New York, with free booze.
The townhouse was one of the main perks initially, and they held many parties and events there.
But, in mid-2015, they received a $100K lawsuit from the landlord, claiming that his residential
space had been used for commercial operations and had been trashed.
The company was not growing as McFarland hoped or said, and cash was running out. So, he
started showing his proficiency to lie and get money.
Among other hustles, he would get quick cash from selling tickets for exclusive events
that he didn't have. Naturally, reservations started being canceled up and down, customer
complaints and refund demands were left unanswered, and nobody was to hold accountable.
But instead of fixing the company, McFarland was already working on his next millionaire
idea: Fyre Media. By the time he met the rapper Ja Rule in those townhouse parties, the two
started working on Fyre as co-founders.
The Fyre Festival fraud was fully powered by social media and influencers. It ended
up being nothing more than an expensive commercial, featuring some of the most elite models and
influencers from Instagram.
In a way, that's how it all started. Billy and Ja Rule wanted to disrupt the music industry
and make a cultural impact with Fyre Media, so they came up with the Fyre Festival.
McFarland understood that they needed to be relevant on social media and put together
one of the most infamous marketing campaigns of recent times. But he didn't do it alone.
He did it by hiring the controversial marketing agency, FuckJerry, or Jerry Media. You may
remember them from the famous meme account on Instagram, now with more than 15M followers.
Yeah, the one that has been widely criticized for making a lot of its fame posting stolen
content.
They're among the firsts who started this thing called "influencer marketing," which
is just advertising your brand through people with large numbers of followers. So, they
got the most exclusive influencers to shoot a promotional spot for the festival.
It was like the Instagram dream came to life. They posted the video four months from the
date of the festival and took the internet by storm. The creatives at FuckJerry designed
a post for all these influencers to upload at the same time.
It was just an orange tile that visually disrupted regular feed posts and created much anticipation.
The #fyrefestival and the video went viral immediately. But the cherry on top of this
influencer madness was when they got Kendall Jenner to post about the festival.
Allegedly, they paid her $250K for a single post to expose the event to her more than
a hundred million followers. The campaign reached more than 300 million people total,
and naturally, tickets started selling like hotcakes.
But the festival planning hadn't even started, it was all in McFarland's head. Only a few
weeks from the date of the festival, there was no island, no villas, no confirmed shows,
no yachts, no catering, no nothing.
So, the production started a race against time to fulfill the promises, but it was evident
for the team that the whole thing was doomed. McFarland persisted and started running bigger
hustles to get money as he burnt it.
Meanwhile, the folks at FuckJerry kept the social media ship going until the very last
moment, despite allegations that they may have been aware that the production was a
disaster. Still, they kept posting quotes like "In 4 days you will be dancing on the
beach".
All this has raised the fair question of how responsible is the marketing agency for the
disaster they wildly helped promote. The Jerry Media agency has stated that they acted at
the Fyre team's command and were not involved in the production on site.
However, only a few days before the festival, people who had paid for tickets had many questions
and turned to the Fyre social media accounts for answers. There was no clarity about transportation
or hosting logistics, or pretty much about anything.
But the FuckJerry fellows had instructions to delete and block anyone who made questions
about the festival on their social media channels. So, if that's what your client wants you to
do, that's what you do. Right?
Just delete any hater comments or questions and block those users out of your social media
fantasy. Anything wrong with that? Nah. It's the cool guys at FuckJerry.
They seem to be so beyond good and evil that they even produced their film about the festival
failure, only a few months after it all blew up. Can we call that a self-redeeming move?
That’s right, the Netflix documentary, "Fyre," was produced by the same company that made
the festival go viral in the first place, and managed the social media behind the scam.
Some argue that the Jerry Media film portrays a lighter version of the issue, focusing on
anecdotes, and washing away the company's key role in the propagation of the fraud.
That is more evident when you compare it to the Hulu documentary on the same topic, "Fyre
Fraud," which makes a deeper analysis on the responsibility of social media and marketing,
in these events.
Now, guess which of the two documentaries got 4 Emmy nominations? Yep, the one from
Jerry Media. I guess we’ll have to hope that next time they worry a little more about
consumers, before they use their godly marketing to sell something.
Now, back to the mess of the festival production. Before it all started falling apart, there
was at least one thing that McFarland did have for the festival: a rented private island
in the Bahamas. But, he got kicked out of it before anything started.
Why? Just because he violated the contract terms by advertising that the narco kingpin,
Pablo Escobar, previously owned the island. But the current owner of the island explicitly
warned him not to market any relation between the island and Escobar.
So, after some emergency island-shopping, McFarland managed to get an under-developed
construction site outside of Sandals Emerald Bay Resort, in an island of the Great Exuma
cays. Nothing like the aspirational private island he had sold.
The place was far from the paradise locations shown in the marketing materials. There was
no infrastructure for electricity or plumbing, no access to the beach, and it was potentially
hazardous for thousands of hyped-up and drunk youngsters.
Red flags started popping up. Several contractors and employees alerted McFarland that it was
impossible to pull off such a festival, in such a short amount of time, with such precarious
conditions.
But the ship was already steaming ahead, tickets were selling, and the festival wasn't canceled
when it should've been. Instead, McFarland went back to his shady practices, on a bigger
scale, to pay for the expenses of the rushed production. So, what did he do?
He started selling even more expensive tiers to the festival, to get more cash. Packages
included luxury villas, private yacht rides with a personal crew, VIP access to shows,
meet and greets with the celebrities…
None of it existed, and he was still selling it for hundreds of thousands of dollars. But
it was still not enough.
So, McFarland started incurring full-blown wire fraud, tricking vendors, authorities,
and workers with bogus money wires. He also presented investors with false documentation
and an overblown company validation, managing to raise around $800K.
Then the rest was just the inevitable course of time, and what many workers on the festival
site have described as a shit-show. The luxury villas ended up being FEMA disaster-relief
tents that got all soaked because the night before the festival, there was a storm.
By the time the first festival-goers arrived, the crew was still setting up the stage. Tents
and mattresses were all over the place, getting dried under the sun, trucks coming and going
with cargo, and some kiosks full of boxes with liquor.
Planes with hundreds of attendees arrived, and more people were hanging around, waiting
for accommodation. But it would never happen, so at one point, McFarland stood on a table
and just instructed the masses to grab the first available tent they could.
What followed must have been nightmare material. Hoards of drunk and mad people, fighting for
a tent to spend the night, in a pitch-black location outdoors, surrounded by cliffs, without
water or toilets.
The next day, as people were escaping the island in the first plane they could, Fyre
would send them an email. It said that day one had a rough start, but the rest of the
festival would be the promised adventure.
McFarland was still trying to save the ship with more lies, but no one believed it at
this point. After the scandal blew in the media, the guy was arrested and soon was bailed
out for $300K. But he couldn't resist himself and shortly went back at scamming people.
Under the name of NYC VIP Pass, he and a new associate would target the Fyre Festival email
list and sell tickets for exclusive events. Does it sound familiar? That's right; it was
the same scam he had done since the early days of Magnises.
But soon, he got busted again, and in early 2019, faced a sentence to six years in prison
for wire fraud. Experts consider that he is still young and the sentence was reasonably
short. So, we should expect to hear from him again in the future.
What do you think? Will he come clean out of jail, or is fraud in his DNA?
One thing that you have to give him is his ability to convince people with his pitch.
I have no idea how he does it because I know for a fact that he's not our customer. But
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