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Investments - Private
Investing in Music Concerts and Earning Heady Profits
By Howard Haykin
- 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.