Investors jumped at the chance to try and score a huge profit from concerts like Kendrick Lamar, Kanye West, Jay-Z, and Pitbull, however, things all came crashing down when they found out it was all a giant scam.
According to the Orlando Sentinel, two Orlando men scammed multiple investors. From 2015 to 2017, Andres Fernandes, 38, and Edison Denizard, 39, raised about $20.7 million from at least 56 investors who were told that their money would be used to “produce and promote concerts at major venues by prominent musicians” as a part of their company, Kadaee Entertainment. Investors were told that they would receive their principal investment back in just a few months, along with 60 percent in profits and free tickets to shows.
In addition, Fernandez told investors that he was making a spin-off nationwide tour created by Ice-T dubbed “Art of Rap” from the rapper’s documentary Something from Nothing: The Art of Rap, as well as a music festival of the same name in California. He led investors to believe that he was also promoting concerts by artists like Ricky Martin, Enrique Iglesias, Kanye West, Pitbull, Jay-Z, Snoop Dogg, and Kendrick Lamar. However, the SEC claims that Kadaae Entertainment didn’t produce concerts for any of these artists nor have any involvement in the Art of Rap tour.
While Fernandez did not actually promote larger artists, he did promote a handful of lesser-known artists around the Orlando area, court documents obtained by the Sentinel stated Yet, only about $311,000 of the investors money was actually spent on concerts, gaining $327,000 in revenue. The rest of the money was spend on paying off earlier investors, rewarding sales agents, or kept for their own personal use.
In August, Fernandez pleaded guilty to wire fraud involving Kadaae Entertainment, while Denizard, who raised $10.4 million from another 78 investors, was not indicted as a part of the scheme but was named in a lawsuit by the SEC last week in the U.S. District Court of Orlando. The SEC is demanding a jury trial for Fernandez and Denizard in order to make them pay for a civil money penalty. A jury date has not been issued at this time.