Lou Pearlman, the disgraced impresario behind the Backstreet Boys and ‘NSYNC who was serving a 25-year prison term after being convicted of running a half-billion-dollar Ponzi scheme, died on Friday night.
‘NSYNC member Lance Bass tweeted word of the news on Saturday, August 20, writing,
“He might not have been a stand up businessman , but I wouldn’t be doing what I love today without his influence.“
On the back of those boy bands’ success, Pearlman turned his businesses into an empire in the 90s, but it was all built on fraud, and he was sued by every act he represented, bar one.
But before and after his fall, rumors were rampant about Pearlman’s relationships with some of the male groups on his roster. NSYNC’s Lance Bass told The Hollywood Reporter in 2014,
“We would hear things, for sure. He would always have young boy limo drivers for Trans Continental Records. Those limo drivers would always be put into different boy bands. Then I’d hear rumors that he would molest the boys before they would even get into the groups. I don’t know how much of that is true, but to me, where there’s smoke, there’s fire.“
Louis Jay Pearlman was born in Flushing,New York in 1954, the only child of a dry-cleaner. His first cousin was Art Garfunkel who attended Pearlman’s bar mitzvah in June 1967, giving him an early taste of music superstardom. According to THR,
Pearlman got his entrepreneurial start in the late 1970s, after graduating from Queens College with a degree in accounting, by founding a helicopter taxi service in New York City. He later moved into blimp leasing. After the maiden voyage of the newly minted Airship International crashed in New Jersey in 1980, Pearlman aligned himself with a penny-stock operation. An initial public offering in 1985 for Airship International (ticker symbol: BLMP) raised $3 million in a widely suspected “pump and dump” scheme. By 1989, he was traveling in a private jet and had relocated to temperate Orlando.
All the while, Pearlman quietly was convincing would-be investors to get in on the ground floor of a flourishing — and fallacious — fleet of planes. Trans Continental would become the cornerstone of Pearlman’s Ponzi scheme of 84 businesses of varying degrees of legitimacy, in which investors contributed to the company’s Employee Investment Savings Accounts (EISA) program.
After a string of blimp accidents in the early ’90s, Pearlman soured on the airship business, remembering the time he chartered a plane in the late 1980s for money-minting New Kids on the Block. He placed a classified ad for teen male vocalists in the Orlando Sentinel in 1992 and fondly recalls “the days when we had the auditioning process, when we put it all together, trying to get a record deal,” Pearlman told The Hollywood Reporter.
Backstreet Boys were not an overnight hit, but Pearlman proceeded to sink millions into the group, assigning management duties to Johnny Wright and wife Donna. Success came with the 1997 hit “Quit Playing Games (With My Heart),” which helped fuel album sales of ultimately 14 million copies. They repeated the formula with NSYNC, and Pearlman proceeded to build his Trans Continental entertainment empire based in Orlando, Fla., containing a string of boy-band-type acts: O-Town, LFO, Aaron Carter, Jordan Knight, Take 5, and the girl group Innosense (which briefly included a pre-fame Britney Spears).
Yet it all unravelled in the late 1990s, with every act under Pearlman’s domain except one (the minor boy band US5) ultimately suing him for misrepresentation and fraud.
Indeed, Pearlman’s entire Trans Continental empire was built on fraud, and after investigators discovered in 2006 that his Ponzi scheme had defrauded investors out of at least $300 million. He fled the country and was arrested in Indonesia in June of 2007, and was sentenced to 25 years in prison for conspiracy, money laundering, and making false statements during a bankruptcy proceeding.
He said in 2014,
“You know, I deeply regret what happened. And I’ll be back.“
Lou Pearlman was 62. (via THR)