For Billy McFarland, the man behind the Fyre Festival, it seems as though there's always another layer to the deception and grift. McFarland entered bankruptcy late last year and pled guilty to fraud charges in connection with the Fyre Festival in March, but his scams didn't end there.
On Tuesday, soon after VICE News published an investigation into sketchy email offers for luxe vacation spots and VIP event tickets which appeared to be using an email list sourced from McFarland's past ventures, McFarland was arrested again on charges of wire fraud and money laundering.
Late last month, some folks started receiving invitations to a wholly different kind of exclusive event: an NYC pop-up shop claiming to have genuine merchandise left over from Fyre Festival. I attended the event and wrote about the experience, as did reporters from Buzzfeed and the New Yorker. Everyone who spoke to the event's organizer, a man who identified himself only as Chris, heard the same story about how the pop-up shop came to be:
Chris, a wealthy investor, purchased tickets to Fyre Festival in 2017, only making it as far as Miami before the disarray at the Bahamas-based event came to light. Just days before the date of the pop-up shop, Chris was made aware of a storage unit auction for the unsold stock of Fyre Festival commemorative merchandise. Chris won the goods at auction and set up the pop-up shop in order to make back his losses from the festival tickets, as well as promising to donate a portion of the profits to a charity he operates dedicated to building homes in Bangladesh.
From the start, Chris seemed hesitant to back up his version of events with evidence. When I asked him to give me more information about the storage unit auction and to provide proof of a donation to his charity, Chris declined to say anything more, stating that he wanted to avoid negative attention from the internet.
My account of the event, published the next morning, included a call for any tips that would help determine the authenticity of the Fyre Festival merchandise. Later that week, I received an anonymous tip that included Chris's last name, or last names: while Chris operates certain social media profiles under the name Chris Helmsley, his real name appears to be Chris Khan.
A Boston College grad and former employee of enterprise blockchain company R3, Khan's Facebook, Instagram and Twitter profiles reflect the luxe millennial lifestyle that the advertising for McFarland's Fyre Festival was designed to appeal to — expensive cars, Supreme apparel, flights on private jets. Chris's LinkedIn profile included a vague mention of charity work, but in using ProPublica's nonprofit explorer I was unable to find any non-profit that claimed Khan as a founder or employee.
What I did find was a history of Khan's enduring fondness for his membership in Magnises, the faux-Black Card/social club/"VIP" ticket-selling business that Billy McFarland started prior to founding the talent-booking company Fyre Media and planning its disastrous sister Festival.A yearly $250 fee promised Magnises members invitations to exclusive events, the opportunity to purchase discounted tickets to in-demand shows and unfettered access to a Magnises clubhouse in NYC — all this on top of a black card that cloned the magnetic strip from your actual credit card. Magnises attracted high-profile investments and was the first venture of McFarland's to receive serious media attention, much of it positive at first.
Magnises launched in 2014, and Billy McFarland was unafraid to cop to the physical card's seeming lack of significance as he developed the company's reputation, insisting that "it's about the people that have it." His appeal to "work hard, play hard"-minded millennials who wanted to network and party worked perhaps too well at the outset — Magnises operated their first members-only clubhouse out of a townhouse in Manhattan's West Village for about a year before the landlords sued McFarland and company over damages. The case settled in January of 2016.
Khan joined Magnises in its earliest days in 2014, posting a screenshot of his acceptance email to Twitter two days before Business Insider ran its first profile of the company. By August of the next year, Khan was invited to join the $1,000-per-year Magnises Plus membership level. Later that fall, Khan attended a dinner alongside other Magnises Plus members at Talula's Garden in Philadelphia during that year's Forbes Under 30 Summit.
One of Khan's dinner partners, Emir Bahadir, is an heir to a Turkish real-estate fortune who describes himself as an "entrepreneur and lifestyle connoisseur" on his website — Bahadir was named as an adviser to Magnises in a 2014 New York Post profile of Billy McFarland, and his own real-estate website names him as an investor in the company. Also pictured in the pile of Magnises Plus cards at Talula's is a card with the spaces for the membership number and name left mysteriously blank. When I contacted Bahadir over the phone, he acknowledged that he knows Chris, but said he did not know whether Chris knew Billy. Bahadir also denied involvement with Magnises (the company has been defunct since September of 2017).
A 2016 article written by Jana Kasperkevic for The Guardian opens with an anecdote from Khan about missing out on a Magnises-organized trip to the same Bahamas island McFarland would later select as the site for the Fyre Festival. Khan goes on to speak glowingly of his experience as a Magnises member:
"After graduation it sounded like the perfect thing to be a part of. It's a network that you are paying for," he explains. When he is in New York, he attends at least two events a month and often uses the 24/7 live concierge services offered by Magnises to book restaurants and figure out where to go for coffee, lunch or dinner. "The cool thing about it is takes the guesswork out of your social life."
In the same article, Kasperkevic notes that "Most members that the Guardian interviewed, knew [McFarland] by name." By many published accounts of McFarland's involvement in the Magnises community, it seems extremely unlikely that an enthusiastic Magnises user like Khan would not have had the opportunity to meet McFarland.
I was able to place Khan and McFarland together at at least one event. On July 26, 2016, Magnises hosted a launch party event at its penthouse at the Hotel on Rivington in Manhattan's Lower East Side, intended to replace the old West Village location as the main Magnises clubhouse. Magnises had a photographer present at the event and posted the photos from the party on their official Facebook page. Khan is visible in several photos, including one placing him a few feet away from McFarland. This photo alone does not stand as proof of a personal or business relationship between McFarland and Khan — but it does make clear that, at the very least, McFarland and Khan ran in the same circles.
Having exhausted the extant social media profiles for Khan, McFarland and Magnises, I reached out to former Magnises members and to the two models pictured in Khan's announcement email for the pop-up shop, hoping to find out more about a possible connection between Khan and McFarland. None of the Magnises members who were willing to respond to my requests for comment socialized much with other members, and did not know Khan or McFarland. The pop-up shop models did not respond to my inquiries.
Meanwhile, I began looking into the intersection between Chapter 7 bankruptcy procedure and state laws governing storage units. Fyre Festival LLC was forced into bankruptcy last September, and in December McFarland was named as the responsible debtor. On the day of the pop-up shop, Polly Mosendz, a reporter for Bloomberg who has extensively covered the legal fallout of Fyre Festival, contacted the bankruptcy trustee's lawyer, who asserted that if an auction for these goods did take place it was in no way related to McFarland's Chapter 7 bankruptcy case. Assuming the story Chris told was true, and assuming the merchandise he sold had originally belonged to McFarland, I reasoned, several other points would need to be true in order for his purchase of the Fyre Festival merchandise to be legal.
In Chapter 7 bankruptcy, the debtor is subject to an automatic stay, which puts a halt to collection actions against the debtor's property. If McFarland kept the Fyre Festival merchandise in a storage unit, in order for the storage unit owners to auction the merchandise in the middle of McFarland's bankruptcy proceedings, they either would have had to take possession before the automatic stay went into effect or, for some reason, be granted an exception from the stay. That would require the storage unit owners to file for a motion of relief from the stay, which would appear in the court docket — we checked available documents via pacer.gov and were unable to find a motion of relief filed by a storage unit company. McFarland could have neglected to disclose to the court that the merchandise resided in the storage unit. Alternatively, the story about the goods residing in a storage unit could be a fabrication, or Chris's claims about the authenticity of the goods could be false. (Again, Khan declined to provide any record of the auction when asked.)
If, hypothetically, McFarland had possession of the merchandise and transferred it directly to Khan for the purposes of the sale, that could possibly violate bankruptcy law. Under Chapter 7, the debtor divides their assets into exempt and nonexempt categories, then forfeits the nonexempt assets to the bankruptcy trustee in order to pay off their debts. While ordinary necessities and other non-luxury goods could qualify as exempt for McFarland, it seems unlikely that McFarland would be allowed to claim business-related assets like unsold merchandise as exempt property. In the event McFarland did possess the merchandise and was allowed to keep it as exempt under Chapter 7, it is possible that a transfer of those goods to Khan for the purpose of a sale would not violate bankruptcy code. I reached out to Gregory Messer, the bankruptcy trustee for McFarland and Fyre Festival, and to his representatives in the hopes of finding whether the Fyre Festival merchandise was accounted for in the bankruptcy proceedings. They didn't respond to repeated requests for comment.
None of this stands as definitive proof of wrongdoing on Khan's part or on McFarland's. It's possible that some of what I uncovered is lacking in crucial context. It could be true that Khan was both a dedicated Magnises member and got burned by Fyre Festival, prompting him to seek out the merchandise and set up a legitimate, legal sale of the goods in order to recoup his funds.
When I published my initial article, Khan reached out in a friendly manner to correct an observation I made about his wristwatch. In that same email, he offered to show me proof of his Fyre Festival ticket. When I reached out again later to ask for evidence of the ticket and any further information to back up his claims about the storage unit and charity, Khan politely declined ("I'm going to stay out of the spotlight for a bit, but thanks for reaching out"). I emailed again to request comment on what I was able to collect on Khan's history with Magnises, the seeming consistencies in his story about the storage unit, and on the apparent absence of a link between Khan and a Bangladesh charity. At the time of publication, Khan did not respond to multiple requests for comment. Khan also locked down his Twitter and Instagram accounts after I reached out.
I also reached out to two of McFarland's lawyers, Tallen Todorovich (who stepped down the day after McFarland's most recent arrest) and Randall Jackson, in hopes of establishing the path the merchandise took from Fyre Festival LLC to Khan. No party responded to repeated requests for comment.
In my attempts to uncover a link between McFarland and Khan, one of the former Magnises members who never met Khan or McFarland mentioned that they, too, had received the pop-up shop email. Given the peculiar formatting used for their name in the email, the source determined that the contact information that the pop-up shop email list had perfectly matched the contact information they provided when they signed up for Magnises — in the new criminal complaint against McFarland, it notes that former Magnises members were targeted for emails from NYC VIP Access, the new venture that got McFarland charged with new counts of wire fraud and money laundering.
As I mentioned in my original article, two Digg employees received the announcement emails for Khan's Fyre Festival merchandise pop-up shop. At the time, we struggled to figure out why only those two employees were emailed, as neither could recall signing up for emails related to Fyre Festival. When I asked those two coworkers earlier this week if they had applied for membership in Magnises, both were able to provide emails proving that they had.
McFarland is currently awaiting sentencing on June 21 for the two counts of wire fraud he pled guilty to in March — both carry a maximum sentence of 20 years. We will update this post as more information becomes available.