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Customs ‘On Hook Too’ Over $10m In Fyre Festival Gear

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Minister of Finance yesterday said Customs will not release $10 million of equipment imported for the ill-fated Fyre Festival until thousands of dollars in outstanding taxes are paid, adding: “We’re on the hook, too.”

K P Turnquest told Tribune Business that event organisers, hip hop artist, Ja Rule, and his friend, William McFarland, needed to “meet their commitments” to the Government as the persons responsible for importing the impounded items into the Bahamas.

He was speaking after the co-owner of a Miami-based production company, which supplied Fyre Festival with $10 million in stage, lighting and sound equipment, expressed concerns to the international music press that the Government might auction off his gear to recover the outstanding Customs duties.

Luca Sabatini, co-owner of Unreal-Systems, pegged the Customs duties owed by Ja Rule and McFarland at $390,000, and said he was as much a victim as the attendees and Bahamian vendors.

Mr Turnquest said that while he sympathised with Mr Sabatini and others caught up in the fiasco, there were taxes due and owing to the Government that needed to be paid.

“I’m certainly sympathetic,” the Deputy Prime Minister told Tribune Business, “but we are on the hook just as well as they are in terms of outstanding monies due. What we know is that Customs duties are due on the imports, and that’s what we’re concerned with.’

Mr Turnquest, while not confirming the amount of import taxes (Customs duty and VAT) outstanding, said the obligation to pay rested with the importers - namely Fyre Festival organisers, Ja Rule and McFarland.

Given that McFarland has said he is unable to pay staff at the organising company, Fyre Media, there is considerable doubt as to whether the organisers can meet their other obligations, including the monies due to the Government, Bahamian vendors and local staff.

Mr Turnquest declined to comment on whether he had confidence the Fyre Festival organisers will honour their Bahamian obligations, but said he expected them to do so.

“It’s a matter for Customs,” he told Tribune Business. “There’s an outstanding bill that needs to be paid, and we’ll expect them to meet their commitments.

“The Customs Department is actively engaged in this matter, and there are some regulations on the importation of equipment that need to be met. Where it goes from here, Customs has its procedures and I’m sure they will handle the matter in the most appropriate way.”

Mr Turnquest indicated that while he had been briefed on the situation, neither himself nor the Ministry of Finance had gotten involved, instead leaving it to Customs.

“They have an obligation to the Department of Customs and the Bahamas Government,” the Minister reiterated of the Fyre Festival organisers.

“They would have understood the circumstances when they imported the goods, so Customs would expect to be compensated for the amount outstanding.”

The fate of the stage equipment suggests that the Fyre Festival casualty toll continues to mount, with numerous victims - both in the Bahamas and US - unpaid by organisers of a fiasco that collapsed into chaos and continues to threaten this nation’s tourism reputation.

Mr Sabatini told the international music press that he was losing significant income from Customs impounding the equipment in the Bahamas, as it cannot be redeployed at other festivals in the US.

And he revealed that Unreal-Systems was being hit with numerous late fee payments, as some of the equipment the Bahamas has retained was leased from other companies.

Sabatini was also quoted as saying that Exuma homeowners, who rented out their homes to Fyre Festival production staff, along with labourers who worked to prepare the site, have yet to be paid by the organisers.

And another Miami-based company, Eventstar, which supplied Fyre Festival’s tents, was said to be in the same position as Unreal-Systems - equipment impounded in the Bahamas due to non-payment of import duties.

The Customs situation contrasts with the glowing picture painted by Ja Rule and McFarland, who in a ‘question and answer’ pamphlet for attendees assured they had taken care of all Customs and Immigration requirements.

The document, which has been seen by Tribune Business, said “the Bahamian army” - presumably meaning the Royal Bahamas Defence Force (RBDF) - would provide security at the festival site.

That did not happen, and there were even suggestions that Fyre Festival had arranged for attendees to be ‘pre-cleared’ by Immigration while in mid-air en-route to Exuma.

Meanwhile, further doubts on Fyre Festival’s claim to have been “given” $8.4 million worth of Bahamian land in exchange for holding the festival were case by the island’s Chamber of Commerce president.

Pedro Rolle, who is a realtor on Exuma, told Tribune Business “there’s no way” the claim can be true, adding that “a hell of a lot” of land and beach would be needed to reach that valuation.

A private placement memorandum (PPM), or offering document, that Fyre Festival’s organisers were using to pitch the event to potential investors in their search for additional financing claimed: “Fyre has been given $8.4 million of market value land on Black Point, Exuma, in exchange for hosting the festival and advertising the island.”

This assertion was described as “absolute bull s*” by the Minister of Tourism, Dionisio D’Aguilar, and Mr Rolle agreed with this assessment.

“I can’t envision that being true; it’s not true,” he said of the $8.4 million claim. “They just cleared down the land they used. There’s nothing special about it. To have $8 million of land it’s got to be a hell of a lot of land and a hell of a lot of beach. There’s no way that’s possible.”

Mr Rolle said he understood that Fyre Festival leased a portion the land it was using from a local Bahamian, meaning that it did not own the property.

Yet one investor, Oleg Itkin, is alleging that he loaned McFarland and Fyre Media some $700,000 on the basis of written representations that the event organisers had been granted Bahamian real estate worth $8.4 million.

Itkin’s lawsuit alleges that the land’s valuation was more than 25 per cent, or one-quarter, of Fyre Media’s claimed assets.

“It’s impossible for them to produce any document showing they have ownership of the land,” Mr Rolle charged. “I can’t see how that could be on any balance sheet, because leasing it, how can that be considered an asset?”

He added that the Government needed to “give more credence” in future to concerns being raised by persons “on the ground” when it came to Fyre Festival-type events, as there had been warning signs one to two months out that the Festival was headed for disaster.

“It didn’t make any sense to us,” Mr Rolle said.

Comments

chairarranger 1 year, 11 months ago

How about this...

https://www.foodyou.today/single-post...">https://www.foodyou.today/single-post...

It alleges that a Ministry of Tourism employee created a business with her sister from the University of the Bahamas to cater the Fyre Festival event, they received payments in cash from festival Organizers, and the chefs they recruited were paid none of it.

If this story is correct then there are major questions to be asked of both the Ministry and the University concerning nepotism, undeclared conflicts of interest and cash payments received by their (public servant) staff.

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OMG 1 year, 11 months ago

Really simple. Large auction held to sell the impounded goods before they deteriorate or disappear .

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