New Lawsuit Claims Disastrous Fyre Festival Was a Massive ‘Ponzi Scheme’

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By Nahema Marchal | 5:03 pm, May 9, 2017

Fyre festival was not only a complete disaster and an embarrassment to all involved but a massive “Ponzi scheme” that organizers would profit from even if they knew they couldn’t deliver their promise, according to a newly filed lawsuit.

The festival, held on a private island in the Caribbean on April 27, billed itself as a one-in-a-lifetime posh music event featuring “first-class culinary experiences and a luxury atmosphere” for well-heeled millennials.

But it turned out to be what has been described as a Lord of the Flies-style “post-apocalyptic nightmare,” with hundreds of revelers stranded for days without food, luxury cabins that turned out to be disaster relief tents and packs of robbers and feral dogs roaming around the island.

A festival goer reenacting a scene from Lord of the Flies on a festival subreddit. Source: Reddit

Since the fiasco, the organizers, which include rapper Jeffrey “Ja Rule” Atkins and Billy McFarland of Fyre Media have been slammed with at least six law suits.

The latest one, prepared by celebrity lawyer Mark Geragos who has previously represented the likes of Michael Jackson, Chris Brown and Kesha, was filed last week in LA on behalf of a client who had dished out $2,000 for his ticket and trip to the Bahamas.

It has since been amended and filed in a federal court for 300 people who seek a total of $100 million in damages.

In the court papers, Geragos describes the festival as “a get rich quick scheme” put together by organizers “merely [as] a front for a massive financial fraud akin to a Ponzi scheme in which the founders … misappropriated funds from attendees.”

The suit claims that despite knowing very well the event was doomed to failure months in advance, organizers went along with it anyway in hopes of making big bucks. In the weeks leading up to the event, court filings say, Fyre Media Inc, the company behind the festival, was still floating a shocking valuation of between $90 million and $105 million.

Geragos also said other defendants, including a prominent socialite married to an executive in one of the world’s largest banks, a social media personality and a venture capitalist, will later be identified as “Seed Series” investors and investigated to determine whether they were also defrauded or whether they were in on the ploy.

Seed investors normally have an active role and control over a new company and, according to court filings, could be found to have been “aiding or abetting.”

Fyre was widely promoted on social media by a score of Instagram influencers, and models including Kendall Jenner, Bella Hadid and Emily Ratajkowski. Jenner, notably, promoted the festival in a since-deleted Instagram photo for which she was paid $250,000, according to a Fyre employee who knew about the transaction.

Last week, Fyre Media was hit by suits from a North Carolina couple who shelled out $4,600 for a VIP villa at the Bahamas festival but never saw the color of it because they were stranded in Miami when the event was “postponed” indefinitely.

Ja Rule and McFarland have since apologized to festival goers and promised everyone would be “refunded in full.”

“We will be working on refunds over the next few days and will be in touch directly with guests with more details. Also, all guests from this year will have free VIP passes to next year’s festival” their joint statement said.

We are not sure anyone will want to return.