McFarland had been charged with two counts of wire fraud. Each count carries a maximum sentence of 20 years in prison according to federal guidelines, but the actual sentence will be determined by the judge.
The first count alleged that McFarland misrepresented his company's financial health in order to secure investments for Fyre Media.
For example, the Fyre Media CEO provided falsified documents that claimed millions in income earned from talent bookings. But in reality, the company only earned $57,443 for that period. McFarland also presented documents claiming more than 2,500 confirmed talent bookings in one month, when only 60 were confirmed in an entire year.
The U.S. attorney's office said these misrepresentations created losses for at least 80 investors, totaling more than $24 million.
The second count alleged that McFarland provided false income statements to a ticket vendor in order to get $2 million for a block of advance tickets to future festivals. Based off those misstatements, the vendor entered into an agreement with McFarland and Fyre which unconditionally guaranteed $2.4 million from the sales of those pre-purchased tickets.
His sentencing is scheduled for June 21.
Legal representatives for McFarland did not immediately respond to CNBC's request for comment.
When charges were announced last summer, Joon Kim, then-acting U.S. attorney for the Southern District of New York, said in a statement that McFarland had "promised a 'life changing' music festival but in actuality delivered a disaster."
On Tuesday, McFarland said he had "grossly underestimated" the resources necessary to produce an event like Fyre Festival, insisting that his intentions were legitimate.
Billed as a luxury music event in the Bahamas, Fyre Festival went viral last year after festivalgoers shared images and stories of a weekend the fell far short of expectations.
Fyre promoted the event on social media using glossy ads featuring models like Bella Hadid and Emily Ratajkowski, though the event's website noted that the images and videos were "conceptual" and that "the actual site layout may vary."
Originally, catering at the festival was supposed to be provided by Starr Events, previously owned by 2017 James Beard Award winner Stephen Starr. Although some guests had expected gourmet meals, the caterer said its deal with Fyre Festival was terminated before the event. The celebrity chef sold the company in 2015.
One attendee shared a photo of his dinner, which was a couple slices of bread and cheese.
Although listed as "Private Luxury Villas," housing at the festival turned out to be USAID disaster-relief tents. Blink 182, Migos, Disclosure, Major Lazer and other artists were scheduled to perform, but many acts canceled.
Day passes for the festival started at $450, while VIP tickets cost as much as $49,000 per person for round-trip flights from Miami, backstage entrance and a dinner with an artist.
—CNBC's Michelle Castillo and Helen Zhao contributed to this report.