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Crimes

Investing in Music Concerts and Earning Heady Profits

September 25, 2019

By Howard Haykin

 

 

AAAHH … the allure of investing in music concerts headed by famous artists!  A music promoter told investors that he had years of experience in the concert business and they could expect returns of 30% to 50% within 60 to 90 days … if they invested in his planned concerts. IF THAT DEAL SOUNDED TOO GOOD TO BE TRUE, THAT'S BECAUSE IT WAS.

 

 

From January 2015 through March 2017, two Florida-based music promoters cheated investors out of more than $30 million.

  • Andres Fernandez (and his companies, Kadaae, LLC and Kadaae Entertainment Corp.) raised $20.7 million from at least 56 investors.
  • Edison Denizard (and his company, Ahead of the Game, LLC) raised $10.4 million from at least 78 investors.

 

HOW THEY DID IT.    Using fake contracts and other false documents, Fernandez and Denizard and their sales agents convinced investors that the companies were under contract to produce specific concert events with specific artists. The biggest event was to be the 2016 “Art of Rap Tour,” which would consist of 21 shows featuring major artists such as Jay-Z, Snoop Dogg and Kendrick Lamar, and would generate over $20 million in gross profits. Investors also received free tickets to concerts that they supposedly invested in. [Tickets were actually bought on Ticketmaster and other resale sites.]

 

In the end, only about $311,000 of the $30 million invested was actually used to produce a handful of concert events – which generated no more than $327,000 in revenues. The rest of the money was largely spent on the promoters’ own personal expenses, commissions to sales agents, and to making payments to investors in Ponzi scheme fashion.

 

POSTSCRIPT.    The ring-leader, Andres Fernandez, pleaded guilty to 12 counts of wire fraud and awaits sentencing - he faces up to 20 years in federal prison on each count.

 

 

Perhaps the best advice to aficionados (and wannabe aficionados) of the music scene to is stick to iTunes (for buying/downloading your favorite songs) and Ticketmaster (for buying hot concert tickets).