07:54, February 21 258 0 abajournal.com

2019-02-21 07:54:06
Why millennials should beware the Fyre Festival, fraud and failed ambition

Ja Rule and Billy McFarland promoting the Fyre Festival. Netflix photo.

Disclaimer: I’m technically a millennial. Even though I’m on the cusp of the starting point for the generational nickname, I fall in the age range ascribed by the Pew Research Center. Admittedly, being on the precipice of the group’s starting points has its pros and cons.

Let’s start with the unfavorable aspects: Merely mentioning the term “millennial” often elicits a negative response. Part of that is due to an ongoing perception that the generation as a whole is narcissistic, entitled and arrogant, all the while being equally cast as impetuously lazy. Millennials are characterized as feeling overtly “special” and often cast as continuously demanding confirmation of that special status.

Nevertheless, there are positives to being a part of what may become the most successful generation of our time. Millennials have a vast understanding of technology and teamwork. They have grown and matured alongside the internet, computers, tablets and smartphones. They are able to multitask at a level few other generations ever imagined. During their formative years, millennials withstood world-altering events such as 9/11 and the Great Recession.

Date ranges for the generational tag vary by source, but the Pew Research Center lists the period as those born from 1981 to 1996. Although it’s a small sample size, I don’t think it’s fair to lump someone born in 1981 in the same category as someone born in 1991. Exponential technological developments created two entirely distinct experiences in those decades.

Think about it: In 1989, few people had home computers and even fewer had “internet” (the world’s first provider of dial-up internet access didn’t even appear until that year). In 1999, however, peer-to-peer file sharing was a reality through services such as Napster and others. Those are two entirely different worlds in the eyes of a child or young adult.

Consequently, many individuals in the earlier half of the generational grouping resent association with those born in the back end. Millennials born closer to the end of the categorized period are tough to handle. They come off as extraordinarily self-absorbed and overly obsessed with how they appear to others. They have a ridiculous need to be seen, heard and appreciated.

Regardless, they are incredibly tech-savvy and very resourceful when necessary. Their confidence and optimism can appear boundless, yet it sometimes teeters on the edge of recklessness.

I wasn’t aware of the Fyre Festival when its initial advertising promos went viral in 2017. To be fair, I don’t have an Instagram account. As far as I can tell, the event gained most of its initial traction from that platform. But, as is often the case, I was finally introduced to this dumpster fire of an event through the use of streaming media.

This year brought mainstream audiences two separate documentaries depicting the Fyre Festival fiasco. You can currently view Fyre Fraud on Hulu and you can watch Fyre on Netflix. I watched both as I prepared for this column. If you have to choose one over the other, I would suggest the Hulu presentation.

Hulu’s Fyre Fraud takes a more objective look at the festival, including what led up to it, how it failed and the fallout that ensued. Netflix’s Fyre, on the other hand, seems more focused on drawing a line in the sand between Billy McFarland, the event’s creator, and the people he hired to help him. Some have even claimed that the Netflix iteration is a fraud as well, noting that the festival’s marketing agency also co-produced the film.

Regardless, both shows share one thing in common: their central character. McFarland is a millennial, tried and true. He was born in December 1991. He comes off as incredibly arrogant and narcissistic. Most importantly, from the perspective of this column at least, he was an extremely talented con man. In fact, he was involved in a few suspect enterprises before joining forces with late 1990s rap icon Ja Rule to launch Fyre Festival.

The occasion was touted as a luxury music festival. Event-goers were promised an extravagant experience on a private island once owned by Pablo Escobar. The festival billed various famous rap, hip-hop and pop artists. It offered food catered by first-class chefs. The amenities were advertised as top-notch. The problem is, the festival didn’t exist.

The festival promotors promulgated a belief that the event would be this generation’s Woodstock. However, there was no infrastructure and almost no planning involved prior to advertising and selling tickets. In a society based on flash and split-second attention grabs, it was easy to put the cart before the horse.

The starting point for advertising was a promotional video shot on the island where the festival was to occur. McFarland and his team rented some of the world’s top models for the video and photo shoot. Bella Hadid, Hailey Baldwin, Chanel Iman and others took part in the initial promotion. They also continued to promote the events by posting pictures taken during the shoot on their Instagram and other social media accounts leading up to the festival.

The promotion company McFarland employed to advertise the event used a “stop the internet” tactic to promote the festival. They hired social media “influencers” (individuals with mass followings who are only famous for being famous) to push the event and promote it through their own personal platforms and accounts. Kendall Jenner was reportedly paid $250,000 for one single Instagram post advertising the event. The promotion company was able to get many influencers, and in turn all of their followers, to post an orange tile on their feeds as a form of “visual disruption.” Once you clicked on the tile, you were directed to the Fyre Festival promotional video starring all of the models as they partied in paradise.

The technique worked like a charm. In an environment in which one has no more than a fraction of a second to catch someone’s attention, the visual disruption created a viral storm. Everyone wanted to be a part of the event. “Influencers” influenced other “influencers.” The festival was able to sell 95 percent if its admission tickets within 48 hours.

The problem is, none of the models or influencers promoting the event did their due diligence.

I approached the Hulu documentary with absolutely no background information regarding McFarland or the festival. I watched the tale of a try-hard 20-something who smoothed his way into funding for endeavors that appeared far outside his ability, knowledge and experience. McFarland touted his team as problem solvers who would find a way to make the event happen. All they needed was funding, and everything else would work itself out.

I lost track of how many times people in both documentaries made comments to the tune of “I don’t know how they thought they could pull this off” while admitting they felt that “someone will figure it out … it will be fine.” In the end, though, they didn’t pull it off, and no one was able to figure it out until it was too late.

If McFarland admitted the festival was not shaping up as promised, he would have definitely been a failure, but he would have not been a crook, necessarily. There is nothing wrong with dreaming big. Ambition has led to some of the greatest achievements man has ever known. McFarland was not willing to give up, though, and his desire for success (and likely his greed in general) resulted in criminal activity.

He began sending fake wires to vendors to keep them working until more cash flow arrived. McFarland would send the vendors screenshots with the confirmation numbers cut off. He submitted doctored loan documents to investors and fraudulently secured hundreds of thousands of dollars in additional funds.

When he realized general-admission ticket sales alone would not bring in enough cash flow to move them to the next step in the plan, he began selling packages to the event including villas that didn’t exist. According to some, they planned to build the villas on the fly after the fact. According to others, it was merely another attempt to get cash flow so the train could keep rolling.

With the festival fast approaching, McFarland’s uber-optimism became nothing more than rank desperation. He was stuck in a pattern of paying for today’s meal with tomorrow’s earnings. When he ran out of ideas to sell, he ordered emails sent to all ticket holders instructing them that the festival would be a “cashless” event. In order to purchase anything, event-goers had to “load up” a bracelet that would act as their debit card while at the festival. That alone netted approximately $2 million more in fraudulently obtained funds for the operation.

Leading up to the festival, McFarland and his team of promoters and attorneys were able to use social media to create an absurd amount of buzz for the event. They harnessed that same method to ensure that there was no “buzz kill” as a result of adverse publicity or negative commentary. If and when frustrated or angry customers voiced their displeasure via social media, the Fyre team simply deleted the comments. They sent cease and desist letters. They outright lied.

As further proof that karma is real, though, McFarland was ultimately investigated by the FBI and charged with wire fraud, bank fraud and giving false statements to law enforcement. In October 2018, a federal judge sentenced him to six years in prison. He was also ordered to forfeit about $26 million. On top of the criminal penalties, McFarland was also sued by the Securities and Exchange Commission and various individuals; in fact, one law firm brought a class action lawsuit against him—on behalf of the ticket buyers—demanding $100 million in damages.

Luckily for the models, influencers and promoters, they were all able to escape criminal liability. Although they no doubt had a part in contributing to the breadth of the scheme to defraud, the government apparently did not believe any of them intentionally aided in furthering the fraudulent activity. One individual likened the scenario to working on an ad campaign for a BMW commercial, only to find out after the commercial airs that the vehicle has a faulty engine.

Maybe we’ll see a burgeoning area of practice as a result: social media mitigation litigation.

Regardless, the Federal Trade Commission has had to step in during the aftermath and issue a reminder for social media advertisers and influencers regarding the guidelines they must follow … and for good measure too. It is far too easy to defraud individuals on social media in today’s environment. We live in an era of information overload, and everyone wants to be first with the big news and the big plans. People are more than happy to jump in line to make sure they aren’t passed up, even if they don’t know what they are waiting in line for.

FOMO (Fear of Missing Out) is referenced often in both documentaries. It’s an epidemic for many millennials. According to the narrative, it is becoming increasingly more common for millennials—and those members of the subsequent Generation Z—to focus entirely too much on “fitting in.” No one wants to be left behind. No one wants to miss out. As a result, consumers in that demographic are easy targets for slick tricks.

As noted in Hulu’s Fyre Fraud: “It’s a great time to be a con man in America.”

Adam Banner

Adam R. Banner is the founder and lead attorney at the Law Offices of Adam R. Banner, a criminal defense law firm in Oklahoma City. His practice focuses solely on state and federal criminal defense. He represents the accused against allegations of sex crimes, violent crimes, drug crimes and white collar crimes.

The study of law isn’t for everyone, yet its practice and procedure seem to permeate pop culture at an increasing rate. This column is about the intersection of law and pop culture in an attempt to separate the real from the ridiculous.