This was a case that I found very interesting when I heard about this man being arrested. Every now and then you will read about some fake concert promoter setting up a show and selling tickets, and then people get upset with the artist when they don't show up, only to find out that they never even knew about it. Mike Wady of Pheonix, AZ took this to a whole new level. He was convicted of 5 counts of wire fraud and 5 counts of transactional money laundering. In addition to his 9 years in Federal Prison, he now has to pay $30 million in restitution, and perform 250 hours of community service. Wady posed as a promoter for the Rolling Stones, Mariah Carey, and over 40 other major touring artists. He convinced investors to give him money for these shows with a promise of repayment once the net profits were finalized. Since Wady had no connection to any of these artists, he would use the money to finance his lifestyle, then return parts of it to the investors as their repayment. Approximately 240 investors lost over $30 million throughout the course of this scam.
Now Why does this case concern me? As someone who is entering the world of being an independent concert promoter, Someone pulling off a scam on this scale stands to threaten that entire industry. When stories like this make headlines, potential investors become more and more suspicious of newer independent promoters, and are much less likely to give their funds to a promoter that is not already well established in the industry. This will force new promoters to start on a much smaller scale and work their way very slowly by building a solid reputation. Hopefully investors will realize that not all independent promoters are scam artists and will be willing to give them a chance.
http://www.fbi.gov/phoenix/press-releases/2011/man-sentenced-to-prison-and-ordered-to-pay-over-30-million-in-restitution-for-multiple-concert-promotion-ponzi-schemes
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