The music industry has for long hosted festival events that attracted thousands to millions of audiences and millions to billions of dollars’ worth of investment. While majority of such events went on to achieve record success, some went down in history as the most famous planning and organizational failures. One such event with the unwanted tag is The Fyre Festival of 2017. Heralded as one of the most exclusive event of its kind, the luxurious event was scheduled for April 28–30 and May 5–7, 2017. The venue was the Great Exuma, and island in Bahamas. Founded by Billy McFarland and Ja Rule, the Fyre Festival attracted approximately 5,000 fans. It was approved and promoted on social media by notable models, later revealed to have been paid to market the event. The event faced monumental logistical, sanitation, food, and accommodation challenges in its inaugural week resulting indefinite postponement (Coscarelli & Ryzik, 2018). Following failure of the planners and organizers to account for thousands of dollar paid by each attendee of the event, class action suits and compensation for damages cases were brought against them. The organizers of the Fyre Festival were accused of defrauding ticket buyers. In 2018, Billy McFarland was convicted and sentenced to six years in prison. Consequently, the Fyre Festival became a case study of fraud in planning and organization of luxurious music events, and a comparative platform for success.
Execution of the Ponzi Scheme
In 2017, Harriet Alexander penned an article for the Telegraph likening the disastrous Fyre Festival to a massive Ponzi scheme. Critics of the organizers of the event observed that they demonstrated incompetence of the most inconceivable level. Billy McFarland, of Fyre Media, and rapper Ja Rule, the primary organizers of the event executed the scheme in a manner reminiscent of Ponzis – promise for paradise followed by failure to deliver. Review of the news coverage articles on the event reveled that McFarland and Ja Rule were discrete in their planning. Only the positive aspects of the plan were availed to the public and interested ticket buyers. The event was conceived from a noble idea of promoting the Fyre music booking app, but from the onset, the organizers withheld information that could have given ticket buyers clues to the prospects of the event being a success. For instance, the organizers agreed to lease the Island from its owners under the strict condition that no reference of its association with the drug warlord Pablo Escobar was to be made in advertising materials (Netflix, 2019). The organizers developed promotional footage featuring famous models who also marketed the event in their social media platforms without declaring that they were paid to perform the marketing roles. This is comparable to purchasing approval of an event from the marketing perspective.
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The falsehoods in the marketing of the Fyre Festival continued after its party of organizers was ejected from the island of Carlos Lehder Rivas for violating the initial agreement about featuring Escobar. Advertising and promotional material on social media continued to cite island of Carlos Lehder Rivas as the venue despite the event having relocated to the Great Exuma. As a result, interested individuals were hoodwinked into paying $1,500 for the cheapest ticket, based on the promises of luxury villas and gourmet meals. On the contrary, the planning and organization of the Fyre Festival was irredeemably affected by the logistical factors, making it impossible to deliver on its promise. The organizers never brought the emerging issues to the attention of the authorities for they had already received payment from ticket buyers, nor did they consider cancelling the event during the initial stages of planning.
Characteristics that Attracted Attention of the Authorities
The authorities involvement in the scheme became inevitable following widespread reports on mainstream and social media of the chaos that erupted from the event. The logistical challenges related to sanitation, accommodation, transportation, and food were highlighted by different parties, including the organizers who assumed responsibility for the disastrous outcome. However, the most critical issue was the amounts paid to the organizers by ticket buyers. Some VIP tickets were sold at $12,000 (Wamsley, 2017). While the commotion that followed the cancellation of the event may have passed as a normal occurrence from poor planning and execution, revelation of the prices of tickets and the number of ticket buyers who were to attend the Fyre Festival attracted relevant interest from different law enforcement and judicial agencies. The commencement of the lawsuits followed complaints by the affected ticket buyers.
Why People Were Conned
The Fyre Festival showed substantial disparity in what it promised and what it delivered. According to Levenson and Bloom (2017), the organizers of the event managed to scheme the fans and investors by wooing them through false advertisements. The promises of a luxury haven, despite the project facing numerous challenges, convinced many people to purchase the tickets. The over 5,000 people spent thousands on tickets for what they thought to be experience of a lifetime. McFarland scammed the people at least $26 million after marketing falsehoods about the Fyre Festival (Huddleston, 2019). It can be argued that tickets buyers were vulnerable because they failed to scrutinize the event, or engage third parties in the purchase process. The people believed in the marketing and promotional messages pushed by the paid influencers, and easily fell into the trap of the event organizers. McFarland has a reputation for organizing events. His past records of success may have convinced many ticket buyers. Moreover, as the founder of Fyre Media, a successful company at the time, McFarland easily won the trust of investors on the viability of the project. In case of Jarule, it can be argued that his reputation as an artist and musician endeared fans to him. Ja Rule’s relationship with artistes and groups scheduled to grace the event may have increased the perceived credibility of the event.
The Crimes and Victims
In my view, the crimes committed by McFarland and Ja Rule has many victims. It is important to look at the case from the perspective of the experiences of the people who attended the event rather than the money they lost in the scheme. From the reviews, it is evident that the cancellation of the event and the poor conditions at the site subjected thousands of people to traumatic experiences. For instance, a detailed statement by Fyre Media on its websites apologized for the confusion and called on attendees to desist from making personal transportation arrangement to the airport and back to Miami. The inconveniences caused to the people justify the assertion of the crimes having victims.
Relevance of Sentences to the Crime
The reports about the sentencing of McFarland to six years in a federal prison may have been welcome to many victims defrauded in the Fyre Festival, but the sentence raises important jurisdictional questions. The organizers of the Fyre Festival committed fraud through failing to disclose information, which is triable under common law of conspiracy to defraud upon conviction (The Sentencing Council, 2019). The maximum sentence is ten years; hence it can be argued that McFarland matches the crime. Application of the law on fraud is determine by the level of culpability, which in this case, was high because the fraud appeared to be premeditated by the organizers.
Evaluation of Appropriate Sentences for the Type of Crimes
In my view, evaluation of sentences for fraud by the courts should take into perspective the role of the offender in the whole set-up. This is necessary to ascertain whether they fraud occurred as means of exploiting a one-off opportunity. The Fyre Festival had significant potential to generate funds, and the organizers may have realized the opportunity, hence, persistence with the event even after ejection from the original site. Fraud may not have been the initial objective, but an outcome of the developments that followed the complexities in planning and execution. Therefore, the severity of the sentence must take into consideration the level of culpability.
Accountability and Responsibility of Banks in the Scheme
My opinion in reference to holding the banks accountable is that the argument is indefensible. Banks as transactional institutions were unlikely to have knowledge of the developments on the ground in relation to planning and execution. Given that the transactions were conducted through Fyre Media, a reputable company that had organized similar events in the past, the banks had no motive to suspect the event to be a fraudulent scheme.
Conclusion
The Fyre Festival remains one of the recent cases of poor organization and execution of events and a case study for management at this level. The conviction and sentencing of the organizers of the event shows the need for transparency and accountability when dealing with projects involving large amounts of money.
References
Alexander, H. (2017). Fyre Festival likened to 'post-Apocalyptic nightmare' Ponzi scheme in new lawsuit. The Telegraph. Retrieved from https://www.telegraph.co.uk/news/2017/05/09/fyre-festival-likened-ponzi-scheme-new-lawsuit/
Coscarelli, J., & Ryzik, M. (2017). Fyre festival, a luxury music weekend, crumbles in the Bahamas. New York Times . Retrieved from https://www.nytimes.com/2017/04/28/arts/music/fyre-festival-ja-rule-bahamas.html
Huddleston, T. (2019). Fyre Festival: How a 25-year-old scammed investors out of $26 million. CNBC. Retrieved from https://www.cnbc.com/2019/08/18/how-fyre-festivals-organizer-scammed-investors-out-of-26-million.html
Levenson, E., & Bloom, D. (2017). Fyre Festival: When a $12,000 luxury festival in paradise turns into chaos. CNN. Retrieved from https://edition.cnn.com/2017/04/28/entertainment/fyre-festival-disaster-trnd/
Netflix. (2019). Fyre: The greatest party that never happened. Retrieved from https://www.youtube.com/watch?v=uZ0KNVU2fV0
The Sentencing Council. (2019). Fraud. Retrieved from https://www.sentencingcouncil.org.uk/offences/magistrates-court/item/fraud/
Wamsley, Laurel (April 28, 2017). Paradise lost: luxury music festival turns out to be half-built scene of chaos. NPR . Retrieved from https://www.npr.org/sections/thetwo-way/2017/04/28/526019457/paradise-lost-luxury-music-festival-turns-out-to-be-half-built-scene-of-chaos
