Great frauds in history: Billy McFarland – the man behind the Fyre Festival
Around 5,000 people paid Billy McFarland up to $100,000 each to attend the lavish Fyre Festival on a Caribbean island. They arrived to find accommodation consisted of little more than some emergency tents.


Billy McFarland was born in New York City in 1991. At the age of 13 he founded an online company selling web space to mainly adult websites. By the time he finished high school he claimed to have founded two other companies. He briefly attended Bucknell University before dropping out to raise venture-capital funding to develop a social-media site where friends could share music and videos. He then set up Magnises, an invitation-only club based on a charge card, offering invitations to exclusive events. Despite receiving funding from energy tycoon Aubrey McClendon, McFarland became bored with the venture and founded Fyre Media instead.
What was the scam?
Fyre Media was based on a website that would make it easier to book artists and celebrities for events. The firm made less than $60,000 from 100 bookings between July 2016 and April 2017, so McFarland presented investors with false financial reports that portrayed the company making millions of dollars from thousands of bookings. He also forged brokerage statements to claim that he had $2.5m-worth of Facebook stock that he could use to personally guarantee some of the larger investments.
What happened next?
To publicise the website, McFarland planned the Fyre Festival, a lavish event on an island in the Caribbean that was to run in April and May 2017. A clever social-media campaign, involving various celebrities and supermodels, lured around 5,000 people, paying between $1,200 and $100,000 each, to buy in. Instead of the promised luxury experience, revellers arrived to find accommodation consisted of little more than some emergency tents. The subsequent media storm led to an investigation by the FBI and McFarland was charged with fraud in June 2017. He was sentenced to six years in jail.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Lessons for investors
The failure of the Frye Festival generated the most publicity, but the biggest losers were the investors who had put a total of $27.4m into the company, including fashion tycoon Carola Jain, who loaned McFarland $4m. Many start-ups fail, but there were several red flags here, including the fact that many of the artists who had supposedly signed up to the website were already represented by other agencies. Another investor pulled out after realising that the “private island” where the festival was due to take place was actually part of an undeveloped resort.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
Half of UK homeowners will need to tap housing wealth to pay for retirement
Unlocking property wealth could inject £21 billion each year into UK economy by 2040, according to new research
-
When will M&S take online orders again?
Shoppers have not been able to place orders on the M&S website for more than two weeks, following a cyberattack. Meanwhile, the retailer’s share price has plummeted by 15%. When will things get back to normal?
-
Who will be the next Warren Buffett?
Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Lorne Michaels: the ringmaster at Saturday Night Live
Lorne Michaels created Saturday Night Live, a cultural phenomenon that launched the careers of countless stars in America.
-
'Rachel Reeves' plan to force pension funds into UK assets won't work'
Opinion Hustling pension fund cash into British assets sounds like a good idea. It would be better to make Britain an attractive place to invest, says Matthew Lynn
-
Elliot Grainge: the music mogul of the TikTok age who will now helm Atlantic Records
Elliot Grainge, the entrepreneur behind the upstart music producer 10K Projects, has taken over the top job at Atlantic Records, the label synonymous with musical greats. Can he transform its prospects?
-
Supersonic travel: How China could 'leapfrog' US and Europe's commercial aviation industry
Opinion Innovation in commercial aviation has been stuck for 60 years. A commercial supersonic jet might be back on the market soon, but will China get there first?
-
How British businesses can tackle Trump's tariffs
The majority of British businesses are likely to take a hit from the chaos caused by Trump’s tariffs to reorder global trade. Companies in the firing line face some difficult decisions, says David Prosser
-
Ben Cohen: The Ben & Jerry’s co-founder who wants to break away from Unilever
Ben Cohen of Ben & Jerry’s ice cream is seeking to break away from Unilever, the conglomerate he sold out to in 2000. It’s a battle for the soul of the brand synonymous with corporate do-gooding.
-
Trump wants to colonise Mars – will it happen?
Donald Trump wants to plant the US flag on Mars. Could humans really live there?