NEW YORK• A few days after the spectacular collapse of the Fyre Festival, just as federal investigators began to circle the wreckage, the event's would-be mastermind, entrepreneur Billy McFarland, was still making promises.
His failed event was sold on social media, by the likes of model Kendall Jenner, as an ultra-luxurious musical getaway in the Bahamas. Scheduled for two weekends starting late last month, it was supposed to up the ante in the competitive festival market. Instead, Fyre had become a punchline for its aborted opening, with reports of panicked millennials scrounging for makeshift shelter on a dark beach.
Yet, speaking on May 2 with unnerved employees at his Tribeca office - with its US$30,000 (S$41,600) sound system and frequent fashion-model visitors - Mr McFarland deflected blame and vowed that Fyre would survive to mount another festival next year.
The coverage had been "sensationalised", he insisted, according to a recording obtained by The New York Times. (Fyre has attributed its cancellation to a combination of factors, including the weather.)
Rapper Ja Rule, Mr McFarland's celebrity business partner, looked on the bright side. "The whole world knows Fyre's name now," he said. "This will pass, guys."
Their company, Fyre Media, however, was already facing the first of more than a dozen lawsuits seeking millions and alleging fraud, breach of contract and more.
The endeavour has also become the focus of a criminal investigation, with the federal authorities looking into possible mail, wire and securities fraud, said a source with knowledge of the matter, who was not authorised to discuss it.
There are many potential victims: ticket buyers, investors and businesses, small and large, in the United States and the Bahamas. Punk rock band Blink-182, who were planned headliners, cannot get their equipment out of customs. Fyre employees have not been paid.
Ms MaryAnn Rolle, a restaurant owner in the Bahamas who catered daily meals and rented villas to the festival crew, says she is owed US$134,000.
Ja Rule was Fyre's famous face, but at the centre of the controversy is Mr McFarland, a brash 25-year- old with a gift for networking and buzzy social media. In his short career, he has persuaded people to buy or invest in whatever he was selling, leaving behind a trail of aggrieved customers and business partners. He could be the Wolf of Wall Street for the selfie set.
Interviews with more than two dozen people associated with him or the festival turned up few who were surprised by the ruins in the Bahamas and beyond.
Raised in Short Hills, New Jersey, by real estate-developer parents, Mr McFarland was already starting technology companies as a teenager.
With the creation of Magnises in 2013, he took on the profile of a budding New York entrepreneur. Modelled after the American Express black card, Magnises - "Latin for absolutely nothing," he once said - was a membership club for upwardly mobile millennials, offering discounts at select hot spots and access to a West Village town house.
But as Magnises expanded, members complained that offers, such as tickets, never materialised and annual dues were charged to their credit cards months early.
Some investors believe that his company was overstating its financial position. In January, Fyre Media said in company documents that it owned land in the Bahamas worth US$8.4 million and had US$21.6 million in revenue from December alone - claims that one investor, Mr Oleg Itkin, said in a lawsuit were probably fictitious.
Towards the end of last year, Mr McFarland became distracted by another project. A music festival in the Bahamas would combine what he called his three biggest passions - tech, rap music and the ocean - and, he told his staff, publicise an app Fyre Media hoped to build that would let people bid for celebrity appearances at their events.
Well into March, the event's website - which briefly vanished because its designer had not been paid - claimed it would take place on Fyre Cay, a private island that once belonged to drug lord Pablo Escobar. Ticket packages included the US$400,000 Artist's Palace, with four beds, eight VIP tickets and dinner with one performer. But there was no such island or palace.
Long after tickets had been sold, Mr McFarland was still nailing down a location. Early last month, the festival team finally set up at Roker Point, a largely unbuilt housing development on Great Exuma.
Weeks before the festival, Fyre told ticket-holders that the event would be "cashless (and cardless)", and encouraged attendees to put up to US$1,500 in advance on a digital Fyre Band to cover incidentals, according to one lawsuit. Those wristbands were merely a stopgap solution to help the company's cash flow, according to two employees.
Two days before guest arrival, Mr McFarland asked Mr Ian Nicholson, a carpenter who was working 18-hour days for the festival, how it was going. "I said, 'I don't think it's gonna be ready,'" Mr Nicholson said.
Senior staff members pleaded with Mr McFarland to cancel or postpone, several of those present said. But having just taken out yet another loan for US$200,000, according to a lawsuit, he responded that money can solve everything, one employee recalled.
Then a storm hit. At the festival site on April 27, guests lined up to be checked into their damp tents. The crowds bottlenecked and grew restless. Mr McFarland hopped on a makeshift table and tried to calm the masses. Just grab a tent, they were instructed, which created more chaos as people scrambled for dry - or any - form of shelter.
In the face of angry customers, Mr McFarland retreated. By the next day, the festival had been cancelled.
Several businesses are still awaiting the fate of their gear, which the Bahamian government is holding because Fyre owes more than US$330,000 in customs fees, according to a government document.
Mr Luca Sabatini, an owner of Unreal-Systems, which supplied the high-calibre sound systems and lighting, said his Miami-based company was out about US$10 million worth of equipment.
Workers, including Mr Nicholson, were left unpaid. A father of three, he is owed nearly US$5,000, and his lights and water have been turned off because he could not pay the bills. "It's killing me," he said.
At the May meeting in New York, rattled employees pressed Mr McFarland and Ja Rule on a troubling thought: They had committed fraud. "That's not fraud, that's not fraud," Ja Rule said, according to the recording. "False advertising, maybe - not fraud." Mr McFarland stayed silent.
NYTIMES
