Co-living company Ollie hired five former employees of Magnises, the black-card startup founded by Fyre Fest mastermind and accused fraudster Billy McFarland.

Ollie’s co-founder Chris Bledsoe was adamant that his firm is merely hiring former Magnises employees to help run events and is not acquiring Magnises. The distinction matters because McFarland was arrested on fraud charges last month.

Magnises, founded in 2014, bills itself as an elite membership platform that gives its users access to exclusive events in return for a $250 annual fee. In January, Business Insider reported that the platform had almost 40,000 members, mostly in New York.

Ollie, which is backed by real estate developers Jonathan Simon and Matthew Baron, had signed a contract with Magnises to offer residents at its buildings monthly events, such as happy hours and food tastings. Bledsoe said he now hired the employees to be able to continue offering events.

McFarland became infamous earlier this year when the Fyre Festival, a music festival in the Bahamas he promoted along with rapper Ja Rule, took a disastrous turn, leaving attendees stranded in makeshift tents on a remote island. Attendees later filed several lawsuits against the promoters, and in late June, McFarland was arrested for alleged wire fraud. Prosecutors accuse the promoter, who is out on bail, of lying to investors.

Magnises, too, has had its share of controversy. Business Insider reported that several members accused the company failing to deliver on its promises and charging them unwanted fees. “We’ve hit some roadblocks along the way, and that’s what happens when you grow really quickly, and that’s on me,” McFarland said at the time. In 2015, a Greenwich Village landlord sued McFarland for allegedly hosting “Animal House” parties for Magnises that damaged the townhouse he was renting.

Representatives for Magnises could not immediately be reached for comment.

Former Magnises employees hired by Ollie include Alexis Heller, formerly Magnises’ head of membership and customer experience and now Ollie’s member coordinator, according to Linkedin.

Ollie, founded in 2016 by brothers Chris and Andrew Bledsoe, currently operates one New York property — the serviced, Furnished Microapartment Building Carmel Place in Kips Bay — along with properties in Pittsburgh, Los Angeles and Jersey City. It plans to open a co-living space next year in Long Island City at 29-26 Northern Boulevard, a building owned by Simon and Baron’s firm, Simon Baron Development.