Billy McFarland, one of the founders of the botched Fyre Festival that took place in April in the Bahamas, has been arrested on federal wire fraud charges.
Federal prosecutors allege McFarland used fake documents to encourage people to invest over US$1 million in his company and the festival.
The U.S Attorney for the South District of New York said in a statement McFarland "put on a show, misrepresenting the financial status of his businesses in order to rake in lucrative investment deals".
"Thanks to the investigative efforts of the FBI, McFarland will now have to answer for his crimes."
McFarland will appear in Manhattan federal court on Saturday and could face up to 20 years in jail if convicted.
The arrest comes after multiple lawsuits were filed against the founders of the festival, including a US$100 million class action.
The FBI launched a criminal investigation shortly after the failed event, citing "possible mail, wire and securities fraud".
The Fyre Festival was organised to take place in the Bahamas across two weekends in April this year. It quickly turned into chaos after the high paying attendees, who forked out up to US$250,000 to attend the event, were forced to stay in sub-par conditions.
The Fyre Festival's co-founder, rapper Ja Rule, was not charged.
A lawyer representing Ja Rule, told The New York Times Ja Rule "would never participate in anything fraudulent; it's simply not in his DNA".
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