Fay was born in St. Louis, Missouri. His mother, Randy, divorced his father, George, when he was eight. As a child, he was diagnosed with attention-deficit hyperactivity disorder which, his lawyer later claimed, made Fay not responsible for his eventual sentencing for vandalism in Singapore.
Although Fay mostly lived with his father after the divorce, he later moved to Singapore to live with his mother and stepfather, Marco Chan, and was enrolled in the Singapore American School.
In October 1993, The Straits Times, Singapore's main English-language newspaper, reported that car vandalism in Singapore was on the rise. Cars parked at apartment blocks were being damaged with hot tar, paint remover, red spray paint, and hatchets. Taxi drivers complained that their tires were slashed. In the city center, cars were found with deep scratches and dents. One man complained that he had to refinish his car six times in six months.
The Singapore police eventually arrested 16-year-old Andy Shiu Chi Ho, a Hong Kong citizen. He was not caught vandalizing cars, but was charged with driving his father's car without a license. After questioning Shiu, the police questioned several expatriate students from the Singapore American School, including Fay, and charged them with more than 50 counts of vandalism. Fay pleaded guilty to vandalizing the cars in addition to stealing road signs. He later maintained that he was advised that such a plea would preclude caning and that his confession was false, that he never vandalized any cars, and that the only crime he committed was stealing signs.
Under the 1966 Vandalism Act, originally passed to curb the spread of political graffiti and which specifically penalized vandalism of government property, Fay was sentenced on March 3, 1994 to four months in jail, a fine of 3,500 Singapore dollars (US$2,214 or £1,514 at the time), and six strokes of the cane. Shiu, who pleaded not guilty, was sentenced to eight months in prison and 12 strokes of the cane.
Fay's lawyers appealed, arguing that the Vandalism Act provided caning only for indelible forms of graffiti vandalism, and that the damaged cars had been cheaply restored to their original condition.
The official position of the United States government was that although it recognized Singapore's right to punish Fay within the due process of law, the punishment of caning was excessive for a teenager who committed a non-violent crime. The United States Embassy in Singapore pointed out that the graffiti damage to the cars was not permanent, but caning would leave Fay with physical scars.
Bill Clinton, then President of the United States, called Fay's punishment extreme and mistaken, and pressured the Singapore government to grant Fay clemency from caning. Two dozen United States senators signed a letter to the Singapore government also appealing for clemency. The Singapore government pointed out that Singaporeans who break the law faced the same punishments as Fay, and claimed that Singapore's laws had kept the city free of vandalism and violence of the kind seen in New York City. The Straits Times criticized "interference" by the United States government and found it surprising that President Clinton had found time to become involved, given the various foreign-policy and other crises it was facing.
Nevertheless, Ong Teng Cheong, the then head of state of Singapore, commuted Fay's caning from six to four strokes as a gesture of respect toward President Clinton. Shiu's sentence was later also reduced, from 12 strokes to six, after a similar clemency appeal. Fay was caned on May 5, 1994, at Queenstown Remand Centre.
Following Fay's sentence, the case received wide coverage by the American and international media. The New York Times, The Washington Post and the Los Angeles Times ran editorials and op-eds condemning the punishment. USA Today reported that caning involved "bits of flesh fly[ing] with each stroke." This latter detail was apparently taken from descriptions (originally derived from a 1974 press conference) of a much larger number of strokes, for more severe crimes such as rape and robbery.
Some commentaries treated the Michael Fay affair as a clash of cultures between Asian values and the differing view of human rights common in liberal Western countries.
Public opinion was mixed. A significant number of Americans were in favor of the caning, claiming that Singapore had a right to use corporal punishment and that the United States did not mete out severe enough punishment to its own juvenile offenders. Others pointed out that once Americans go abroad, they are subject to the laws and penal codes of the country they visit. The Singapore Embassy received "a flood of letters" from Americans strongly supporting Fay's punishment, and some polls showed a majority of Americans favored it.
After Fay's punishment was carried out, the Office of the United States Trade Representative said it would try to prevent the World Trade Organization's first ministerial meeting from taking place in Singapore.
After his release from prison in June 1994, Fay returned to the United States to live with his biological father. He gave several television interviews, including one with his American lawyer on CNN with Larry King on June 29, 1994, in which he admitted taking road signs but denied vandalizing cars. He also claimed that he was ill-treated during questioning, but had shaken hands with the caning operative after his four strokes had been administered.
Several months after returning to the United States, Fay suffered burns to his hands and face after a butane incident. He was subsequently admitted to the Hazelden rehabilitation program for butane abuse. He claimed that sniffing butane "made him forget what happened in Singapore." In 1996, he was cited in Florida for a number of violations, including careless driving, reckless driving, not reporting a crash, and having an open bottle of alcohol in a car. Later, in 1998, still in Florida, Fay was arrested for possession of marijuana and drug paraphernalia, charges to which he confessed but was acquitted because of technical errors in his arrest.
In 1995 the case inspired The Simpsons episode "Bart vs. Australia", in which Australia is to punish Bart via "booting" — a kick in the buttocks using a giant boot (later reduced to a shoe).
"Weird Al" Yankovic released a song based on the Fay case, called "Headline News"
During an interview with CCTV in June 2004, Lee Kuan Yew, the first Prime Minister of Singapore, said that Fay hit his father upon his return in the United States, which was suppressed by the American media. In June 2010, Fay's case was recalled in international news, after another foreigner in Singapore, Swiss IT consultant Oliver Fricker, was sentenced to five months in jail and three strokes of the cane for vandalizing a train.