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Why did the Fyre Festival's founder go to jail?

If you've been online lately, you've probably heard the buzz surrounding the Fyre Festival -- the famous concert "experience" for wealthy, influential Millennials that wasn't. Two documentaries about what happened there have recently landed on Netflix and Hulu.

The Fyre Festival was an example of how social media and marketing could create a belief in an unproven venture that was strong enough to hook people -- including experienced investors -- for thousands of dollars. It was also a fantastic example of how reality sometimes fails to live up to social media hype. Ultimately, after failing to provide the concert experience that was supposed to be somewhere along the lines of Coachella and Burning Man, the Fyre Festival's founder went to jail and is permanently banned from being an officer or director of a business again.

Why? Concerts fail to meet expectations or get canceled all the time without anybody going to jail, right? What made this case different is that the Fyre Festival's founder pleaded guilty to wire fraud.

Essentially, if you use the internet (or some other means of communication) as part of a multi-state scheme to defraud someone of their money or valuables, that's wire fraud. Some examples include:

  • Solicitations for fake charities
  • Phony debt collection scams
  • Fake inheritance scams
  • Loan schemes (including those "Nigerian prince" ones)
  • Using someone's credit or bank account without permission for purchases
  • Sending doctored financial documents to investors

In the Fyre Festival case, its founder doctored financial documents to convince investors that he had top-name acts under contract to perform. He also sold tickets to customers for things that weren't in existence -- like luxury tents adjacent to the performance grounds and concierge travel service. While on bail awaiting his trial in that case, he organized another scheme to sell tickets to exclusive events -- tickets that he didn't have and couldn't get.

Much of what happened at the Fyre Festival would have prodded just about any unhappy attendee into suing in civil court -- but it was wire fraud with investors that ultimately brought agents from the Federal Bureau of Investigation knocking on its founder's door.

If you're being investigated for wire fraud, you need to take the situation extremely seriously. Get experienced legal advice as quickly as possible.

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