By: Nashrah Ahmed

Promoted as a luxury concert experience on the Bahamas’ island of Exumas, Fyre Festival was said to be “the unparalleled best in music, cuisine, design and hospitality.”[1]  In the months leading up to April 2017, the lineup boasted popular acts such as Blink-182, Migos, and Tyga, while the popular promotional video showed luxury villas and fine dining.[2]  The viral advertising campaign, involving young celebrities such as Kendell Jenner and Bella Hadid posting mysterious orange squares, took social media by storm.[3]  But when attendees arrived, they were stranded on a rocky island without any infrastructure to accommodate them and were met with disaster relief tents, soggy mattresses, little to no drinking water, no-show musical acts, and the now infamous cheese sandwiches.[4]  Social media posts from the festival went viral, showing the pandemonium that was occurring in real time and illustrating the organizer, Billy McFarland’s, clear incompetence and lack of experience.[5]  McFarland continuously lied about Fyre’s revenue, telling some investors that it was bringing in $44 million a year, when it had only made under $60,000 since launching.[6]  Hoping to get a $25 million investment from Comcast Venture, he valued Fyre at $90 million, despite having absolutely no proof of that.[7] 

Theranos, Inc. (“Theranos”), on the other hand, was a Silicon Valley-based lab testing company that boasted to have had revolutionized the healthcare industry by creating a machine that only needed a very small amount of blood to perform standard testing and disease screening.[8]  Theranos claimed that it would be able to perform almost 200 tests by just pricking a finger.[9]  The seemingly groundbreaking company had a $9 billion valuation just a few years ago in 2014, but everything fell apart quickly when The Wall Street Journal investigated and found that Theranos was using traditional blood tests machines rather than their supposedly revolutionizing methods because the science behind these methods simply did not hold up.[10]  It was not possible to perform this type of blood testing with such small amounts of blood.[11]  The founder, Elizabeth Holmes, had also been claiming that Theranos had annual revenues of $100 million, while it was barely making $100,000 every year.[12]

Some have called the American society’s fascination with crimes like these a “never-ending, all-weather scam season.”[13]  When both Fyre Festival and Theranos failed, and it became clear that it was fraud, they were enormous news stories that very quickly spread through social media.  America has become easily captivated by stories of young genius millennials rising to the top, but even more enthralled by their catastrophic ends, creating a unique new genre of entertainment.[14]  This genre is now extremely popular and extremely lucrative, especially after rival streaming companies Netflix and Hulu both rolled out competing documentaries in the same week.[15]  Netflix had announced that Fyre: The Greatest Party That Never Happened would be released on January 18, 2019, but Hulu’s Fyre Fraud surprise dropped only five days earlier, creating a second social media Fyre-storm.[16] 

But this new genre has also created even more legal battles:  Clarissa Cardenas, a Fyre Festival attendee who recorded video footage during the ordeal, filed suit against Netflix and Jerry Media, more commonly known as fuckjerry, for copyright infringement.[17]  She is alleging that her footage was used by the producers in the Fyre documentary without her permission.[18]  This is just one more case in the long list of lawsuits against various individuals involved in Fyre Festival and its aftermath.  Many different lawsuits, both individual and class action, were brought against many of the individuals involved, particularly focusing on Billy McFarland.[19]  While most of these are still proceeding through litigation, McFarland has already been ordered to pay back nearly $30 million in restitution.[20]

Similarly, ABC’s podcast about Theranos and the meteoric rise of Elizabeth Holmes, The Dropout has already seen great success.[21]  HBO’s upcoming documentary, The Inventor, is already being discussed heavily on social media, along with a feature film that is currently in production, rumoring to star Jennifer Lawrence as Holmes.[22]  Though this story is becoming increasingly popular, Holmes and Theranos are also being sued both by investors seeking to recover significant amounts of their money and by patients alleging that the inaccurate testing methods caused harmful results.[23]  Holmes has not yet been ordered to pay restitution or serve any sentence.[24]

Despite the American public’s fixation on both McFarland and Holmes, it is clear that they will be held accountable for their actions.[25]  The SEC has determined that Fyre Festival cost its investors more than $27 million, while Theranos cost its investors a total of $700 million.[26]  Both Fyre Festival’s founder, Billy McFarland, and Theranos’s founder, Elizabeth Holmes, orchestrated extremely intricate, years-long forms of manipulation, such as continuous lying about financial performance and company abilities.[27]  They both knowingly used extremely misleading statements and impossible promises in order to defraud both investors and consumers.[28]  As a result, both McFarland and Holmes were indicted on wire fraud charges in 2018.[29]  While McFarland pled guilty in March of that year and is currently serving a six year sentence in prison, Holmes pled not guilty in June and is still awaiting trial.[30]

---

[1] Alex Darus, Netflix is Getting Sued by Fyre Festival Attendee for Copyright Infringement, Alt Press (Mar. 1, 2019), https://www.altpress.com/news/netflix-fyre-festival-sued/.

[2] See Fyre Festival, Announcing Fyre Festival, YouTube (Jan. 12, 2017), https://www.youtube.com/watch?v=mz5kY3RsmKo.

[3] Ariana Brockington, In Case You Forgot:  Here are the Celebs That Were Tied to Fyre Fest, Refinery29 (Jan. 17, 2019), https://www.refinery29.com/en-us/2019/01/221812/fyre-festival-celebrity-instagram-endorsements.  See also Jeff John Roberts, Celebrity Influencers Face Moment of Truth in Fyre Festival Lawsuit, Fortune (May 7, 2017), https://fortune.com/2017/05/07/fyre-festival-lawsuit/.

[4] Mary Hanbury, These Photos Reveal Why the 27-Year-Old Organizer of the Disastrous Fyre Festival Has Been Sentenced to Six Years inPprison, Bus. Insider (Jan. 19, 2019), https://www.businessinsider.com/fyre-festival-expectations-vs-reality-2017-4.

[5] Id.

[6] Bryan Burrough, Fyre Festival: Anatomy of a Millennial Marking Fiasco Waiting to Happen, Vanity Fair (Aug. 2017), https://www.vanityfair.com/news/2017/06/fyre-festival-billy-mcfarland-millennial-marketing-fiasco.

[7] Id.

[8] Reed Abelson, Theranos Founder Elizabeth Holmes Indicted on Fraud Charges, The N.Y. Times (June 15, 2018), https://www.nytimes.com/2018/06/15/health/theranos-elizabeth-holmes-fraud.html?login=email&auth=login-email.

[9] Ken Alltucker, As Theranos Drama Unwinds, Former Patients Claim Inaccurate Tests Changed Their Lives, USA Today (July 5, 2018), https://www.usatoday.com/story/news/nation/2018/07/05/theranos-elizabeth-holmes-lawsuits-patients-harm-arizona/742008002/.

[10] Id. See also John Carreyrou, U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani, The Wall St. J. (June 15, 2018), https://www.wsj.com/articles/u-s-files-criminal-charges-against-theranoss-elizabeth-holmes-ramesh-balwani-1529096005.

[11] Abelson, supra note 8.  

[12] Id.

[13] Amanda Hess, Fyre Festival, Theranos, and Our Never-Ending ‘Scam Season,’ N.Y. Times (Jan. 30, 2019), https://www.nytimes.com/2019/01/30/arts/fyre-festival-billy-mcfarland-elizabeth-holmes-anna-delvey.html.

[14] Id.

[15] Scott Tobias, Fyre fight: The Inside Story of How We Got Two Warring Fyre Festival Documentaries in the Same Week, The Ringer (Jan 15, 2019), https://www.theringer.com/movies/2019/1/15/18183308/fyre-festival-documentary-netflix-hulu-billy-mcfarland-pay.

[16] Id.

[17] Darus, supra note 1.

[18] Id.

[19] Fyre Festival Flameout: What You Need to Know About the 6 Lawsuits, Forbes (May 10, 2017), https://www.forbes.com/sites/legalentertainment/2017/05/10/fyre-festival-legal-battles-a-guide-to-the-6-lawsuits/#397f142c5d08; Brad Hancock, Fyre Festival’s Legal Woes Rage On, Law360 (May 30, 2017), https://www.law360.com/articles/929127/fyre-festival-s-legal-woes-rage-on.

[20] Id.

[21] Hess, supra note 13.

[22] Id.

[23] Alltucker, supra note 9.

[24] Id.

[25] SEC Charges Failed Fyre Festival Founder and Others With $27.4 Million Offering Fraud, SEC, https://www.sec.gov/news/press-release/2018-141 (last visited Mar. 3, 2019); Theranos, CEO Holmes, and Former President Balwani Charged with Massive Fraud, SEC, https://www.sec.gov/news/press-release/2018-41 (last visited Mar. 3, 2019).

[26] Id.

[27] Id.

[28] Id.

[29] Andrew Flanagan, Fyre Festival Co-Founder Billy McFarland Sentenced to 6 Years in Prison, NPR (Oct. 11, 2018), https://www.npr.org/2018/10/11/656480640/fyre-festival-co-founder-billy-mcfarland-sentenced-in-manhattan; Abelson, supra note 8.

[30] Id.