Inside Fyre Festival Fraudster Billy McFarland’s First Big Millennial Scam
He’s currently serving six years behind bars for wire fraud related to Fyre Fest, but before that, the 27-year-old conned his fellow rich NYC millennials with Magnises.
January’s war of the Fyre Festival documentaries not only raised a number of ethical quandaries and launched a thousand memes about sucking dick for Evian water, but the Hulu and Netflix projects also unearthed new revelations about Fyre founder Billy McFarland’s first big scam.
Yes, before there was Fyre Festival, there was Magnises—a business that one Hulu talking head memorably likened to Parks and Recreation’s Entertainment 720. In the words of McFarland himself, the company was conceived of in 2013, when he looked at his debit card and thought, “Wow, what if I could make these cooler?” Some magnetic tape, a “sheet of metal from China,” and one made-up word later, Magnises was born.
For a $250 annual fee, Magnises members could experience the rush of paying checks with a heavy card. But more than that, Magnises billed itself as a social club for millennials, connecting their members through exclusive events and offering tantalizing deals to the aspiring American Express black card set. As per Magnises’ Facebook page, “Our members are the thrill-seekers, the hard-workers, & the go-getters. We are an international group of people looking to create and maximize our experiences.”
But as ex-Magnises employee Emily Boehm explained in Fyre Fraud, “The people who hung out there were not the people that they advertised. It was like guys who lived in Murray Hill that if they could join an out-of-college fraternity, they would.”
Michael*, a former Magnises member who asked to remain anonymous, immediately picked up on the disconnect between the image that McFarland was selling and the bros who populated the company’s original West Village townhouse. “I went to my first Magnises event and I quickly realized that I may not want to hang out with any of those people for longer than five or 10 minutes,” he told The Daily Beast. “It was at that townhouse that he ultimately destroyed—it was a Kentucky Derby party. It felt like a lot of dudes overselling themselves and trying to talk to attractive women, and those are not my favorite types of people.”
A source who also asked to remain anonymous recalled her experience visiting the Magnises townhouse with a group of friends, because one of them “told us he had a Magnises card, which gave him this insane perk of partying in a townhouse in the West Village,” she recalled. “The townhouse itself was nice but they served vodka and orange juice in clear plastic cups, which didn’t fit the general bougie atmosphere. Most of the other people there were prep school boys in their early to mid-twenties who also had Magnises cards. There were also some dudes just sitting on the couch and watching television.”
“I remember asking our friend how the cards worked, but he didn’t really know either. I remember a bunch of us making jokes about the improbability of there being any profit here—and we had only taken Econ 101 at this point. The whole thing just felt absurd… But not more absurd than the ridiculous lives of prep school boys.”
In 2015, Page Six reported that the owner of the townhouse at 22 Greenwich Ave. had sued McFarland for causing over $62,000 in damages to the space with his “blowout parties.” Magnises members found refuge in a new space but, according to legal docs, that was just the beginning of McFarland’s path of destruction.
Another former member, Antwaun Cook, was new to the city when he joined Magnises. “When I got there I already knew some prominent party promoters but I still wanted to have access to exclusive parties and VIP access to the hottest clubs and restaurants,” Cook told The Daily Beast. “They even advertised that Magnises owners would be able to use a BMW owned by Magnises as long as it was available. It never was.”
“The big kicker was the clubhouse on Greenwich that I used frequently for Wi-Fi access, to get out of the bad weather, and to do some work in between meetings,” he continued. “It was stocked with bottom-shelf liquor and a bunch of random people walking around as if they were roommates. Supposedly you could rent a room with a bed but for the life of me I couldn’t understand why you’d want to rent the room while everyone was perusing the rest of the house.”
For Cook, the “warning signs” became fairly evident “when they would advertise events and I’d RSVP but would get an email saying the event was already at capacity. Or they would advertise the event as included with Magnises but they’d ask for an additional fee to get tickets.”
“It was a lot of over-promising and under-producing in my opinion,” he concluded. “When it was time to renew I decided against it because I’d already met the right resources and was well known enough to jump line and get into the hot clubs without the Magnises backing.”
The first mention of a scam on Magnises’s Instagram account is a December 2016 comment, in which someone warns their friend and refers them to the business’s Yelp page. There, they could find posts like one from Pearce D., who ranked Magnises among his “greatest regrets” in his “entire life.” Pearce went on to detail his experience of trying to redeem a Magnises offer for Hamilton tickets.
“After booking in February for an October show, I had my friends book flights from Japan to come see the show. Fast forward to the day before the show. Despite confirming no less than five times over the course of the year, I receive an email from Magnises saying they can no longer fulfill the tickets and to reschedule. No further explanation nor retribution for the show.
“Like an absolutely ignorant, gullible idiot, I actually listen to them,” he continued. “I then have my friends pay the change fee to switch their flight to the new date in December. Fast forward to the day before and surprise, I receive the SAME exact email.”
The Better Business Bureau currently lists 28 customer complaints on Magnises’s business profile, earning it an ‘F’ rating.
In the Fyre Fraud documentary, former employee Emily Boehm cited the Hamilton tickets offer as “the worst ticket scam, in my opinion,” explaining that, “[McFarland] would sell things he knew people wanted even if he didn’t actually have them.”
According to the SEC complaint against McFarland, the entrepreneur told investors that Magnises “had strategic partnerships with certain entertainment and hospitality providers,” which allowed the company to give their clients access to tickets at reduced rates. “In truth,” the documents continue, “such strategic partnerships did not exist, and Magnises employees and contractors repeatedly purchased tickets for Magnises members at McFarland’s behest from public websites. Where tickets were unavailable from public websites, however, McFarland nonetheless would promise tickets to Magnises members, only to be unable to provide them.” This same complaint alleges that McFarland made further false statements to investors, including exaggerating the companies’ membership numbers and revenue.
Magnises’s social media accounts portrayed a thriving community—millennials who met up at horse races, went on group trips to the Hamptons and mingled with celebrities at VIP Manhattan nightclubs like Up & Down. Much like Fyre Festival, Magnises presented itself as an opportunity to not only live like—but to actually party with—celebrities. Their March 2014 launch party featured a performance by French Montana; Ty Dolla $ign and Action Bronson headlined their first anniversary party a year later. Magnises’s Instagram page boasts snaps of Kellan Lutz holding up a Magnises card and Sahara Ray giving them a shout-out, as well as one inexplicable fan selfie with Bill Nye the Science Guy (Bill Nye did not return The Daily Beast’s request for comment).
“Some people in Magnises joked that Billy was always on his cell with Ja Rule, which rang pretty true to me,” Michael recalled. “He always had a phone glued to his ear, and it seemed important that we knew he was friends with Ja...I was like, ‘Sorry, remind me who that is again?’ Like, do we care about Ja Rule?” Ja Rule’s representative has said that the artist had no operational role in Magnises.
Creative director Sean Glass DJ’d a 2013 Magnises party, a 30th birthday celebration for a friend of his. “The event was pretty ridiculous, Sugarhill Gang came and performed, with zero relevance to the event. It was kinda like a Bar Mitzvah vibe. They were also in the middle of some dispute over the name rights, so they made a speech about it, and were I guess rallying awareness around this. “
“I was so confused who was paying for this, or if they were just doing it for free because they thought we were ‘influential’ or something like that.”
“One of my friends got a card in an attempt to convince Billy to invest in another one of our friends’ new startup, so he had access to the Magnises space,” Glass continued. “That’s what Billy did. He leveraged his access to capital to get people to subscribe to Magnises. He leveraged his tables at night clubs, private jets, etc. He’d tell someone, ‘Sign up for Magnises and I will do X for you.’ Whether he did those things for people, I do not know, case by case. Mostly no, I imagine.”
“It was just so obviously a white-person scam,” Glass concluded. “White-person scam meaning, white guy with parents’ money and parents’ friends’ money doing some exploitative bullshit that’s main business model is based around scaling and raising more capital, which is probably the only thing they are capable of. I didn't know much around 2013, but I knew about this, and I talked about it… If I knew, everybody knew. And I know everybody knew because I talked to them about it. Anyone saying they were ‘taken’ by him is lying.”
A 2014 Billboard article by Carson Griffith focused on the musicians who were signing up for Magnises. “Rappers Wale and French Montana have not only performed at private Magnises events but are members themselves,” Griffith reported. Wale told Billboard that, “The team behind Magnises are some real Zuckerberg types,” adding, “Once I met them I knew they would be blowing up, so that’s why I got involved.”
Multiple former members cite positive press—even The New York Times wrote up McFarland’s “chunk of clout”—as part of the reason why they took Magnises seriously. “I remember seeing a news piece on CNBC about the new black card, so there was definitely some legitimacy with all of the Billy McFarland interviews,” Michael recalled. As someone who was fairly new to the city, he seized the opportunity to “get a few hundred bucks off of Broadway tickets here and there and get some free stuff at restaurants.” A Yelp reviewer wrote that they were “drawn to apply for a ‘membership’ after reading a glowing Business Insider article outlining the countless benefits.”
While Magnises proved to be a relatively positive experience for Michael, who enjoyed perks like discount Book of Mormon tickets, he remembered being confused by the company’s overall tone. “What was odd about Magnises was the pitch was, it’s for millennials on their way up. They don't have a black card yet. But 50 percent of the perks were for private jets and classic car clubs that are God knows how much a month, so I just didn’t really understand what they were thinking.”
“I can’t imagine what percentage [of Magnises’s millennial membership] was taking this 10 percent off Magnises deal for all of their private charter flights.”
In a January 2016 email that was reviewed by The Daily Beast, Magnises offered Michael a $4,000 long weekend experience at Norman’s Cay in the Bahamas—the original site for the Fyre Festival. The “Magnises Bahamas Trip” package boasted “gorgeous villas,” pig swimming, and “private, member-flown planes.”
“This to me looks like the Fyre pilot program, or the thing that maybe sparked the idea,” Michael told The Daily Beast.
An October 2016 missive, which was ironically marked as a potential scam email, informed Michael and other Magnises members that the heavy card company was going digital. “Starting December 1st,” the email announced, “we will stop issuing Magnises cards.” In retrospect, Michael thinks that that email could have been indicating “the beginning of trouble.”
“So this whole company was founded on the idea that we wanted to carry around these cool black heavy metal cards that clinked when you put them down to pay the bill,” he laughed. “And this to me was like, clearly they’re losing money somewhere, because now they’re trying to sell me that the coolest thing is to pull out your iPhone and just show this Magnises logo.”
In December, 2017, Michael sent an email “to every Magnises email that I had” to try and make sure that his account was cancelled. “I was starting to get worried that I was going to be like, paying into Billy’s pocket for perpetuity or something because I couldn’t get any confirmation if the company still existed.” He didn’t get a response. According to an August 2017 Bloomberg article, “Just weeks after [Fyre Festival] was scheduled to take place, Magnises terminated the lease on its Chelsea office.”
Both of the dueling Fyre Festival documentaries invoke McFarland’s aura of success; how, as a promising young entrepreneur, he was able to lure in—and eventually lie to—big investors. Presenting Magnises as an unimpeachable success was crucial to maintaining that mythos. According to legal documents, “Between December 2016 and May 2017, McFarland made numerous false statements and created fake documents to create the illusion that Magnises would be (and then was) purchased by a third party buyer for between $35 and 40 million. This scheme was undertaken in order to create the false impression for investors and potential investors that McFarland was a successful entrepreneur with a proven track record of success. In at least one instance, McFarland used the fictitious acquisition to solicit investment in the Fyre entities using the purported ‘post-sale’ value of Magnises as collateral.”
At one point McFarland even went so far as to create a name for the purported buyers, “Saddleback Media,” listing their address as Magnises’s New York City headquarters. In other words: McFarland claimed that Magnises’s fictitious buyer was located at Magnises’s own offices.
When artist Tripp Derrick Barnes visited the Fyre offices, he had similarly only heard McFarland referenced as a successful young entrepreneur. Barnes first met Ja Rule at a club, where he introduced himself to the rapper and his friend, Billy McFarland. “I didn’t know Billy at the time, but they were acting the same way that they do in that Netflix documentary—you could tell that Ja Rule is like the face of it and getting people riled up, and there’s Billy just kind of doing his thing and being an entrepreneur and shaking hands and slapping backs.” Ja expressed interest in Barnes doing a painting for Fyre, the company that he and McFarland were about to start.
Tripp eventually brought the finished piece to the Fyre headquarters, where he met “a handful of people from the documentary.” He described the office, including McFarland, as seeming “stressed out,” adding, “They might be stressed, but at the same time, who wouldn’t be stressed when you’re trying to put together a festival on an island in the middle of nowhere?” Ja Rule paid Barnes for the painting, he noted, which differentiates him from the many people who were financially screwed by McFarland and the Fyre Festival.
At another date, Ja and Barnes had discussed the idea of him doing a “PR kind of thing where I would paint underwater” at the Fyre Festival. “Like how cool would that be if there’s all these people on the beach listening to music, and then the next shot is like, all of a sudden you go underwater and then there’s this guy painting underwater with a bunch of fish around?” Tripp texted Ja Rule a few times asking about the project, but never heard back. “And then I saw that it was a total failure and I realized that it was probably because Ja knew something was up, or he was just super-busy with trying to make it work.”
“I mean shit, they were struggling to get enough tents, why would they pay any attention to me?”
Barnes concluded that, “My relationship was mainly with Ja Rule, and he was the man. He was a very honest and upfront guy that—I just felt for him when all that stuff went down. Unfortunately, Ja Rule partnered with the wrong guy. I honestly believe that.”
Michael also recognized a number of people from the documentaries, including Andy King, whom he met on a Magnises booze cruise. “There did seem to be some mentor figures like Andy who were clearly very reputable and good at their jobs, and I think that ultimately helped Billy keep going as long as he could,” Michael noted. “And I mean obviously watching the documentaries…I don’t know how long Andy knew Billy, but it’s almost like he’s his dad or something. I don’t know why he would go that far for this kid who’s clearly talking out of his ass and promising things he can’t deliver.”
He also called Billy’s interview for Fyre Fraud “staggering,” saying, “He’s like American Psycho 2.0 or something like that. He seems like every person in a Law & Order episode who’s lying on the stand. But all of the stuff about Billy and the [Magnises staff] rang pretty true.”
Sean Glass, who live-tweeted his viewing of both documentaries, told The Daily Beast that, “Anyone saying they thought it was all going fine and kept going is lying—everyone is complicit, everyone knew it was a scam.”
“Now they’re covering it up with massive PR campaigns and movies, letting Billy take the full fall. Billy deserves to be in jail for much longer, but so do others.”