Fyre Festival founder arrested and charged with wire fraud

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Fyre Festival founder Billy McFarland was arrested and charged with one count of wire fraud Friday for allegedly defrauding investors with his disastrous music festival that left hundreds of well-heeled millennials stranded in the Bahamas and millions of dollars in investments and ticket sales unaccounted for.

McFarland, the 26-year-old CEO of Magnises, a concierge company, and Fyre Media, an app to book performing artists for private events, will spend the night in jail. He is expected to be arraigned before a judge on Saturday, Joon Kim, the Acting United States Attorney for the Southern District of New York, said in a statement.

 “As alleged, William McFarland promised a ‘life changing’ music festival but in actuality delivered a disaster,” Joon said. “McFarland allegedly presented fake documents to induce investors to put over a million dollars into his company and the fiasco called the Fyre Festival. Thanks to the investigative efforts of the FBI, McFarland will now have to answer for his crimes.”

Prosecutors allege McFarland began the criminal scheme in late 2016, right around the time he announced the Fyre Festival through a well-orchestrated marketing campaign involving hundreds of so-called Instagram “influencers,” including Kendall Jenner, Bella Hadid and Hailey Baldwin.

According to the criminal complaint, filed in the Southern District of New York, McFarland lied to at least two investors about how much the company was worth, eventually inducing them to invest around $1.2 million in the festival based on assertions that Fyre was making millions of dollars in revenue. In fact, prosecutors say, the company had earned only $60,000 over the past year.

McFarland also allegedly doctored a stock ownership statement to convince one of those unnamed investors that he held more than $2.5 million in shares in an unnamed company to use as collateral in the deal.

Though the complaint doesn’t specifically list the stock or the investor, a brokerage statement purporting to show McFarland as the owner of $2,565,079.18 in Facebook stock is listed as an exhibit in a civil suit filed by investor Oleg Itkin, who gave McFarland a $700,000 loan. Prosecutors say McFarland did own shares of Facebook stock — but only about $1,400 worth.

It’s not clear who is representing McFarland, who was dropped by his legal team Hughes, Hubbard & Reed LLP, on Wednesday. Michael Levine, a Westchester attorney, is listed as McFarland’s incoming attorney in a signed affidavit in the Itkin case. But reached by phone Friday night, Levine denied any involvement in the criminal case and said he was merely involved in the civil case as local counsel for a California firm which he declined to name.

Here’s a promotional video for the ill-fated Fyre Festival, which was canceled soon after it began in April:

Cover: Billy McFarland and Carol Mac attend The 23rd Annual Watermill Center Summer Benefit & Auction at The Watermill Center on July 30, 2016 in Water Mill, NY. (Photo by Patrick McMullan/Patrick McMullan via G Images)

Sourced From – https://news.vice.com/story/fyre-festival-founder-arrested-and-charged-with-wire-fraud

Should Avvo’s Legal Services Be Considered An Ethical Form Of Fee Splitting?

Avvo has argued that the fee-splitting prohibition could be a violation of the First Amendment.

A few days ago, three committees appointed by the New Jersey Supreme Court jointly ruled that its lawyers cannot participate in Avvo’s Legal Services program because it engages in unethical fee splitting with non-lawyers.

Avvo’s Legal Services program works like this: A lawyer who signs up for the program will have a chance to be connected to a client seeking a 15-minute consultation. The client pays $39.95 to Avvo which is deposited to the attorney’s bank account. Soon after, in a separate transaction, Avvo debits $10 from the attorney’s bank account as an “marketing fee” for that client.

Does the above make Avvo’s Legal Services program a fee-splitting scheme? Yes. You can call it a “marketing fee” or some other name that doesn’t include the words “fee split with non-lawyers.” But it does not change the fact that a lawyer is getting paid and a non-lawyer is getting a cut of that pay. And it’s not just New Jersey that thinks this way. The state bar ethics committees of Ohio, Pennsylvania, and South Carolina also ruled that this was impermissible fee splitting. I am very confident that other states will rule the same way.

Some argued that this system is no different than a credit card processing company charging a fee based on a percentage of the money received from a credit card transaction. There is a big distinction. The credit card processing company is not providing the clients. The processing company does not care whether the client is happy with the lawyer’s service. Avvo sets up a caller with an attorney. I do not know how Avvo matches up callers with attorneys, but I think it’s safe to assume that if callers are consistently unhappy with a particular attorney, that attorney will stop getting connections.

Full Article – http://abovethelaw.com/2017/06/should-avvos-legal-services-be-considered-an-ethical-form-of-fee-splitting/?rf=1

FDA Wants To Stop Pharma From ‘Gaming’ Generic Drug System

The U.S. Food and Drug Administration moved on Wednesday to prevent pharmaceutical companies from “gaming” the system to block or delay entry of generic rivals.

FDA Commissioner Scott Gottlieb said in a blog post that the agency plans to hold a public meeting on July 18 to identify ways pharmaceutical companies are using FDA rules to place obstacles in the way of generic competition.

“We know that sometimes our regulatory rules might be ‘gamed’ in ways that may delay generic drug approvals beyond the time frame the law intended, in order to reduce competition,” he said in the blog post. “We are actively looking at ways our rules are being used and, in some cases, misused.”

The move comes as President Donald Trump and lawmakers in Congress search for ways to lower the cost of prescription drugs. Trump is preparing to put out an executive order on drug pricing, according to media reports, and last week U.S. Senator Ron Wyden introduced a bill to require companies to explain the reasons for significant price increases.

Full Read – http://www.nbcnews.com/health/health-news/fda-wants-stop-pharma-gaming-generic-drug-system-n775151

The new face of Trump’s legal team has never done anything like this — and allies think he’s the perfect fit

When Jay Sekulow found himself backed into a corner during a heated interview with Fox News host Chris Wallace on Sunday, he pulled out his inner Trump.

The host of “Fox News Sunday” was pressing Sekulow on President Donald Trump’s Friday tweet, in which Trump wrote: “I am under investigation.”

Wallace and Sekulow, a big time conservative lawyer who is quickly becoming the face of Trump’s legal team, went back and forth on the issue. Sekulow, while trying to explain why Trump wasn’t personally under investigation by special counsel Robert Mueller, found himself saying that Trump was under investigation. Twice.

“You’ve now said that he is being investigated,” Wallace said.

“No, Chris,” Sekulow replied. “Let me be crystal clear so you completely understand: We have not received nor are we aware of any investigation of the president of the United States.”

“Sir, you’ve just said two times that he’s being investigated,” Wallace said.

As the president has done on many occasions, Sekulow then doubled- and tripled-down on his point even while his rhetoric from just moments before contradicted it. Trump was not under investigation, he reiterated time and time again.

Read Full – http://www.businessinsider.com/jay-sekulow-new-face-trump-legal-team-russia-2017-6

Cosby team triumphant, but sex crime retrial, lawsuits loom

In one of the more unusual scenes to play out at Bill Cosby’s sexual assault trial, the judge questioned Cosby under oath as jury deliberations wore on to be sure he knew the mistrial he sought could lead to a second trial.

Cosby, the actor and comedian known as “America’s Dad,” turns 80 next month facing just that ordeal. Legal experts believe prosecutors will reshape their case for Round Two, although it’s not yet clear why jurors couldn’t reach a verdict, or how close they came.

District Attorney Kevin Steele could ask the judge to let more of Cosby’s 60 accusers testify or disclose to jurors that accuser Andrea Constand is gay. That never came up in her seven hours of testimony. The defense had hoped, if it did, to introduce evidence she had previously dated a man.

Read Full – http://www.miamiherald.com/entertainment/celebrities/article156821314.html