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Fyre Festival fraudster Billy McFarland said he scammed everyone because he’s bipolar. Prosecutors say he's a liar.

A desperate play for leniency before a judge sentences him to as much as 20 years in prison.

by Gabrielle Bluestone
Oct 4 2018, 6:36pm

Lawyers for Billy McFarland, the startup boy wonder turned felon who threw the infamous Fyre Festival, say their client shouldn’t be sentenced to up to 20 years in prison, because he is suffering from untreated bipolar disorder. Prosecutors say it’s simply the case of a liar trying to get a lighter sentence.

McFarland pleaded guilty to fraud charges stemming from the Fyre Festival in March of this year and then again in June, after he was arrested a second time for scamming people out of more than $150,000 through a sham ticket company called NYC VIP Access while he was out on bail for the first set of charges.

The mental illness claim was part of a filing in advance of McFarland’s Oct. 11 sentencing on both the Fyre and NYC VIP Access charges, and had not been raised before in his case. Prosecutors asked the court Wednesday to sentence McFarland to somewhere between 15 and 20 years in prison, a significant jump over the four to eight he had originally negotiated before he was arrested for the second time.

Read: Two Fyre Fest attendees were just awarded $5 million for their trauma

In all, prosecutors say McFarland stole more than $26 million from Fyre investors and contractors using “sophisticated means” to perpetuate the fraud, including the use of “a series of fictitious and forged documents to deceive investors.” They cite one example where McFarland paid two unwitting “large and reputable law firms” to draw up papers that detailed the fake sale of one of his companies for $40 million, which he used to entice new investors.

Suffering from "mania"

According to McFarland’s attorney, Randall Jackson of the Boies, Schiller, and Flexner law firm, McFarland was examined sometime after his June arrest by a licensed psychologist and a forensic expert, both of whom concluded he suffers from symptoms of mania or hypomania that may have been present while he was executing his various scams.

“In my opinion, at the time of the instant offenses, Mr. McFarland’s mental state was compromised by a combination of factors. He was experiencing symptoms of mania or hypomania due to an untreated Unspecified Bipolar and Related Disorder,” Dr. Cheryl Paradis wrote in a document submitted to the court. “He was not sleeping and felt exhausted and overwhelmed. He had a diminished capacity to foresee the consequences of his actions.”

Prosecutors called the diagnosis a “transparent” bid for leniency at sentencing.

“For the past five years, the defendant has been the consummate con artist. The defendant’s actions reveal a profoundly greedy, self-absorbed man focused exclusively on himself,” the filing says. “Whenever he needed more money, he lied to investors to get it. Whenever he wanted more money, he gave it to himself from business accounts. Whenever one scheme began to falter, he hatched a newer and more elaborate one.”

Read: Fyre Festival founder charged with scamming people out of $100,000 while on bail

Another mental health expert hired by McFarland’s defense team, Columbia University professor and forensic psychiatrist Dr. Andrew Levin, concluded Mr. McFarland suffers from both ADHD and Other Specified Bipolar and Related Disorder that “resulted in his pattern of undertaking on multiple projects accompanied by unrealistic appraisals of success.” Dr. Levin ultimately concluded in his report that McFarland “did not feel that what he did was wrong.”

From this diagnosis, Dr. Levin presented an alternate theory of McFarland’s motives in the Fyre Festival scam:

His success reinforced his grandiosity and distorted sense that there were ‘no boundaries.’ It was in this context that he developed the unrealistic plans for the festival. Despite input from others that he could not accomplish what he proposed, he clung to his grandiose plan until the end. His misrepresentation to investors grew out of an unrealistic belief that the festival would succeed and a fear of letting down those who had already invested. Following arrest, he had a brief period of lower mood and then reverted to his grandiose, unrealistic ventures. The ticket venture was grounded in his desire to make restitution. It failed because he over-estimated his ability to deliver tickets. Following his longstanding pattern of poor planning and grandiose appraisal. These patterns derive from his ADHD and mood disorder.

Prosecutors have a different view, noting in a filing Wednesday that McFarland couldn’t have canceled the festival, even if he wanted to, because he had lied about how much his companies were really worth to secure investments, and promised “investors would have the rights to payouts from Festival event cancellation insurance policies, when, in fact, no event cancellation policies had been executed.”

McFarland’s attorneys also contend he launched the subsequent NYC VIP Access ticket scam to reimburse his creditors. Prosecutors say that is also false, noting that, “McFarland spent approximately $60,000 on ticket purchases and paying NYC VIP Access employees, and kept approximately $20,000 of the NYC VIP Access ticket sale proceeds for himself.”

Living so large

During that time, according to court filings, he was living for free at a friend’s $31 million Manhattan townhouse.

McFarland’s attorneys also cited testimony from Dr. Levin that McFarland didn’t use any money for personal gain, though prosecutors say that, too, is false. According to expense reports, McFarland spent outrageous sums leading up to the festival that far exceeded the income he was making at the time. For example, prosecutors say, McFarland spent $215,090.59 on interior design and furniture between Jan. 1, 2017, and April 25, 2017, for two apartments that cost him more than $100,000 a year in rent.

Records show that even while he was bouncing checks to suppliers, producers, and staffers working on the festival, he was spending hundreds of thousands of dollars on personal expenses, including tens of thousands to a design firm run by the girlfriend of his CMO, Grant Margolin. The woman did not return a request for comment.

He also spent $41,359.41 on clothing at Barney’s over a four-month period in 2016, and dropped more than $100,000 on dining, entertainment, and hotels between May 2016 and April 2017, when the Fyre Festival took place, according to court documents.

Read: Fyre Festival CEO Billy McFarland faces charges for luring investors with fake artist deals

In all, prosecutors say, he spent at least $631,925.58 of other people’s money on himself in the year leading up to the Fyre Festival, including more than $30,000 on hotel rooms in the Hamptons during the summer of 2016. During that time period, Fyre Media made only $57,443, and McFarland was drawing a salary of $100,000 per year, according to court documents.

“Throughout the period of his fraud, McFarland received money, benefits, and perks, which enabled him to live an extravagant lifestyle, including maintaining a Manhattan residence, employing a private driver of a luxury vehicle, taking frequent trips by private plane, and making seemingly magnanimous donations to charitable interests and friends. These activities were funded, in substantial part, with investor money,” the sentencing document reads.

Dropping $42,000 at Ikea

McFarland’s credit card charges also shed new light on what he purchased for the festival, and when. For example, records show, he spent around $42,000 at Ikea a week before the festival. When Fyre Festival ticket buyers arrived to the event in the Bahamas, they found a small number of available tents that were sparsely stocked with wet Ikea furniture and mattresses, much of it still in boxes.

McFarland’s defense team has argued that a sentence of 15 years or more would be unconscionable, in part, because the perpetrators of the Madoff scheme received shorter sentences. This, too, was rebutted by prosecutors.

“McFarland’s egregious criminal conduct separates him from other run-of-the-mill fraud schemes. He is the sole criminal mastermind who ran sophisticated fraudulent schemes for three companies over the course of several years. McFarland’s schemes inflicted huge losses of over $26 million to over 100 victims. And even when he was caught, he persisted in telling blatant lies to cover up his wrongdoing,” the filing says.

Cover: Billy McFarland, the promoter of the failed Fyre Festival in the Bahamas, leaves federal court after pleading guilty to wire fraud charges, Tuesday, March 6, 2018, in New York. He faces a sentence of 8 to 10 years. (AP Photo/Mark Lennihan)

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