The Securities and Exchange Commission announced on Tuesday that New York entrepreneur William Z. (Billy) McFarland, two companies he founded, a former senior executive, and a former contractor have all agreed to settle charges arising out of an extensive, multi-year offering fraud that raised at least $27.4 million from more than 100 investors.

If McFarland’s name rings a bell, it may very well be because he gained international notoriety after his Fyre Festival, marketed as an upscale music festival in the Bahamas, devolved into a disaster area with stranded attendees, no-show entertainers and celebrities, not enough water, and bologna sandwiches often substituting for the gourmet meals initially promised.

The SEC’s complaint alleges that McFarland fraudulently induced investments into his companies Fyre Media, Fyre Festival, and Magnises in connection with the so-called “once-in-a-lifetime” music festival.

With substantial assistance from Grant Margolin, his Chief Marketing Officer, and Daniel Simon, an independent contractor to his companies, McFarland induced investors to entrust him with tens of millions of dollars by fraudulently inflating key operational, financial metrics and successes of his companies, as well as his own personal success.

Investors were provided with a doctored brokerage account statement purporting to show personal stock holdings of over $2.5 million, the SEC alleges. In reality, the Commission said, the account held shares worth less than $1,500. McFarland, instead, used investor funds “to bankroll a lavish lifestyle including living in a Manhattan penthouse apartment, partying with celebrities, and traveling by private plane and chauffeured luxury cars.”

“McFarland gained the trust of investors by falsely portraying himself as a skilled entrepreneur running a series of successful media companies. But this false picture of business success was built on fake brokerage statements and stolen investor funds,” Melissa Hodgman, associate director of the SEC’s Enforcement Division, said in a statement..

The SEC’s complaint, which was filed in federal court in Manhattan, charges McFarland, Margolin, Simon, Fyre Media, and Magnises with violating the antifraud provisions of the federal securities laws. 

McFarland has admitted to the SEC’s allegations against him, agreed to a permanent officer-and-director bar, and agreed to disgorgement of $27.4 million, to be deemed satisfied by the forfeiture order entered in McFarland’s sentencing in a related criminal case. 

Margolin, Simon, Fyre Media, and Magnises also agreed to the settlement without admitting or denying the charges.

Margolin has agreed to a seven-year director-and-officer bar and must pay a $35,000 penalty. Simon has agreed to a three-year director-and-officer bar and must pay over $15,000 in disgorgement and penalty. 

The settlements are subject to court approval.