The post that considers the curious tales of the wannabe festival founder, heiress and rock star.
I’ve noticed a recent trend in the news for incidents of fraud involving, more than anything else, the sale of a certain lifestyle. The people scammed were suckered in by the promise of glamour, excitement and luxury.
Whilst crimes preying on or motivated by people’s greed are by no means new, the last year seems to have seen a certain focus in the media on these stories.
Exhibit 1: The Fake Festival
Let’s start with what is probably the best known due to two documentaries being released about it this year: the 2017 Fyre Festival. For anyone who has been living in an apocalypse bunker for the past year, the Fyre Festival was the brainchild of Billy McFarland, with the rapper Ja Rule as a co-organiser and promoter.
It was billed as an extravagant festival experience like no other. Tickets cost up to $100,000. Guests were promised an exclusive party on a private island in the Bahamas. Instead guests arrived to find there were no musical acts, the luxury villas they expected were in fact a sea of rain-soaked tents, there was insufficient food for the weekend and there was no immediate transportation out of there. They were trapped and miserable.
People have been particularly fascinated by the Fyre Festival because of the famous names that promoted it. Whatever money McFarland had was seemingly spent on paying the likes of Kendall Jenner and Bella Hadid to post about Fyre on their Instagram accounts. The Fyre Festival certainly had the necessary buzz to make an event successful.
Unfortunately it had no substance. McFarland was hopelessly out of his depth. He had no experience of running an event of this size and certainly didn’t have the financial backing to pull it off. He ignored the advice of the event teams he’d hired and doggedly stumbled towards disaster.
There is mixed opinions on whether McFarland is an outright fraudster who never intended to provide the promised festival experience or whether he was just blind to his own limitations and refused to acknowledge when things started going south.
Personally, I straddle the two categories. McFarland is certainly a fraudster and a grade A scum bag, but he seemed to have a genuine (and staggeringly unrealistic) belief that everything would come good in the end. That didn’t stop him from being jailed for six years for fraud and ordered to pay back investors $27 million.
It is quite difficult to feel sorry for the people that shelled out stupid money for the festival. Schadenfreude was rife in the reporting of the Fyre Festival. The victims of the fraud were seen as vacuous “influencers” or over-privileged fools who deserved what they got.
I take a less harsh view as my general belief is that you are entitled to the products and services you pay for. And I understand that there were plenty of “ordinary” people at the festival who hadn’t purchased the super expensive tickets that also ended up out of pocket (although anyone who was duped into loading up thousands of pounds of funds in advance onto their festival wristbands needs their head examining).
However, my sympathy lies with the local community of Great Exuma in the Bahamas where the festival was held. Hundreds of builders and labourers who were never paid for their work. By far the saddest thing in the Netflix documentary, Fyre: The Greatest Party That Never Happened, was hearing the story of the local restaurant owner who used her $50,000 life savings trying to meet the catering requirements for the event.
Exhibit 2: The Fake Heiress
Over the last month the press has been awash with details of the fascinating case of Anna Sorokin, known in the glitzy New York social circles in which she moved for several years as Anna Delvey.
A jury in Manhattan recently found Sorokin guilty of four counts of theft of services, three counts of grand larceny and one count of attempted grand larceny. She will be sentenced next week.
During 2016 and 2017, Sorokin lived in luxury New York hotels and lived the high life of expensive restaurants and designer clothes. Most people believed her to be a wealthy German heiress, with the goal of setting up a swanky private members arts club. Sorokin used this illusion to ingratiate herself in the New York art scene.
Yet this was all a lie, Sorokin was born in Russia in 1991, moving to Germany in 2007. She was from a modest background. And inevitably the house of cards she had built up could not last for ever. The credit cards started getting declined and her friends began to get suspicious when they would foot the bill for things and Sorokin’s promises to reimburse them never materialised. One friend, Rachel Williams, got lumbered with a $62,000 bill after being invited on a luxury holiday to Morocco.
Sorokin was barred from the high-end hotels she had managed to scam for so long and was eventually arrested.
The full story is captured in a viral New York article.
The media has portrayed Sorokin as a wannabe socialite, but she rejects this characterisation. She insists that this was about a genuine desire to make a success of her arts club. One of her failed scams was using her contacts to apply for a $22 million loan from City National Bank. The loan was denied when the bank could not verify Sorokin’s documents.
Sorokin’s defence lawyer portrayed her as someone with a genuine belief that her business would work and she would be able to pay back everything she owed. She just needed time and a foot in the door.
Even during the trial, Sorokin was seemingly unwilling to let go of the image she was so used to portraying. She worked with a stylist during her trial to get the right courtroom look. She was even late to court one day as she was dissatisfied with her outfit (much to the exasperation of the judge).
The thing I find most fascinating about this case is how long it took the people around Sorokin to finally twig that all was not what it seemed. Yes she splashed cash around, but there were serious alarm bells. But people wanted to believe in the illusion, so ignored them.
Exhibit 3: The Fake Rock Star
The final story is perhaps less well known than the other two, but involves an equally desirable lifestyle: that of the rock star.
Jered Eames was an unknown musician performing under the stage name Threatin. He used paid Facebook likes and edited concert footage, amongst other tricks, to convince music promoters that he was the frontman of an award-winning band that had a sold-out US tour under its belt. Accordingly, he managed to secure a 10-date tour of Europe, including hiring bandmates who were clueless this was all a lie.
Unsurprisingly, given that Threatin was a nobody, the tour was a disaster. Night after night of empty venues until the last few dates were cancelled.
Threatin himself is a source of fascination. In this interview he gave with the BBC, he comes across as not the least bit sorry or embarrassed. As far as he’s concerned he did nothing wrong. He just filled all of the usual music industry roles (manager, publicist, booking agent) himself under various aliases. He’s a man obsessed with fame and appears to view it as his right to have a continent-wide tour in his name. The fact that he didn’t actually have the infrastructure behind him to make it a success, in his view, shouldn’t have mattered.
Even more extraordinary is the evidence that the whole tour, including the unmasking of Threatin as a fraud, was part of the publicity stunt. Threatin appears to have email accounts showing that he was the one who leaked the news of the “real” Jered Threatin to the media. However, when the BBC reporter covering the story followed this up, it seemed that this too was a lie, the date of the emails was doctored and they were actually sent after the media had already gotten wind of the story and the tour had collapsed. It’s difficult to see where the lies end and the truth begins.
If it was a publicity stunt it appears to have worked. Threatin’s music now has a couple of million views on You Tube. I listened to one of his songs, Living is Dying, and it’s kind of catchy. I certainly wouldn’t have come across it if I hadn’t read about him on the internet. Sure he’s no Jimmy Page, but Threatin seems to be proof of the truth in the saying that all publicity is good publicity.
A New Kind of Fraud
There’s nothing new about a fraud based on selling a particular dream. Preying on people’s desire to get rich quick and save them from the humdrum is as old as the hills.
There’s a few things that seem to be particular to this latest wave of fraud:
The impact of social media: Fyre was a product of social media promotion, Sorokin supported her lies with her Instagram account and Threatin used paid social media likes to trick the music industry that his band were successful. It hardly needs me to comment on how social media instils feelings of envy, FOMO and the desire to get something for nothing in large sections of the population. It’s inevitable that some people will take advantage of that.
The victim blaming: in almost all contexts we frown on victim-blaming. But here people seem to almost take delight in how naïve people got their “just desserts” (especially the Fyre Festival attendees)
Monetising the story: two Fyre Festival documentaries already out. Two potential TV series in the works about the Sorokin story with Lena Dunham and Shonda Rhimes having been linked to them. Rachel Williams has a book deal to tell her story. Threatin claims he has had movie and book deals offered to him (although who knows if that’s the truth).
What’s this got to do with finance?
Mostly I wrote this post because I thought they were interesting stories. However, I do think the financial independence path helps keep us immune from being duped by these kind of scams.
Financial independence is a “slow and steady wins the race” mentality. It tells us that nothing is going to be handed to you on a silver platter. You save what you can and let your wealth build over time. Supermodels who have been paid tens, even hundreds of thousands of pounds, for one post telling you to attend a music festival shouldn’t be trusted. A woman asking you to cover a $60k holiday bill with a promise she’ll pay you back, can’t be trusted.
I wrote last week about feelings of financial jealousy, and judging from the response, a lot of us with an interest in personal finance feel the same. But at least there’s usually something of substance behind what we aspire to. Building up funds in index trackers over twenty years may not be glamorous. But if we’re realistic about the risks and careful with our choices then (barring a complete collapse of the capitalist system) we shouldn’t find ourselves with egg on our faces.