WITH his private jets, huge Florida mansion and Rolls Royce, music mogul Lou Pearlman promised untold wealth to wannabe stars such as Justin Timberlake.
But the American businessman who turned NSYNC, Backstreet Boys and O-Town into superstars was funding their boyband dreams with what became the longest running Ponzi scheme in US history.
Over three decades Pearlman conned nearly £400 million out of families, friends, investors and big banks by forging documents and faking a lavish lifestyle.
He claimed to have a fleet of 50 private jets that he leased out, when in fact the one Transcontinental plane in the promotional picture was a toy which had been held up in front of an airport and photographed.
Pearlman, who died in prison in 2016 aged 62, was axed by both NSYNC and Backstreet Boys shortly after turning them into chart toppers when they realised he was pocketing millions and leaving them with tiny sums.
NSYNC later revealed it was two years of touring and chart success before they got their first proper cheque – presented with flourish at a lavish dinner with Pearlman’s family. It was for just £8,000 each.
Both bands sued him for fraud and solo pop star Aaron Carter accused Pearlman of criminal deception.
But Pearlman always found new acts and businesses which he could get people to fund, such as a model agency, pizza restaurant, a shopping mall, a yoghurt brand, a nightclub, American football team and the Chippendales.
His connections allowed him to help organise a Jackson 5 reunion and Britney Spears was briefly part of a girl group he set up with Timberlake’s mum called Innosense.
With his creditors closing in, he went on the run in 2007 from the FBI fleeing to Europe and then Bali with a singer in his boyband Natural.
Now a new Netflix documentary titled Dirty Pop: The Boy Band Scam, which streams tomorrow (july 24), reveals the depth of Pearlman’s deception which even led to one of his key employees committing suicide.
Chris Kirkpatrick, who formed NSYNC for Pearlman, says: “Lou was a snake.
“He was so busy seeing the shiny objects that he didn’t see who he hurt.”
Pearlman was an unlikely pop impresario, even though singer Art Garfunkel was his cousin.
While living with his parents in an apartment in Queens, New York, the budding entrepreneur persuaded companies to emblazon their logos on the side of his rented airships.
Even though they kept crashing, the wily Pearlman still profited thanks to insurance payouts.
The next venture for his company Transcontinental was creating the new New Kids on the Block.
Lou was a snake
Chris Kirkpatrick
Pearlman found five singers in 1993, hired New Kids’ managers Johnny and Donna Wright, paid for vocal training, had them rehearse in one of his airship hangars near Orlando, Florida and made them tour high schools.
Howie Dorough, from The Backstreet Boys, recalls: “We weren’t getting paid at that time, that’s for sure.”
They made it big in Germany, securing a top five hit with I’ll Never Break Your Heart, but struggled to become known in the US.
Pearlman decided to double his chances of success by asking Chris to find four singers to join NSYNC in 1995, picking a then 14-year-old Disney Mickey Mouse Club member Timberlake as one of them.
When both acts had hit albums in 1997 the businessman appeared to have the pop golden touch.
But Chris, who grew up in a trailer park to a single parent mum unable to afford to pay the electricity bills, was shocked by the size of his first paycheck.
He reveals: “Lou said I’m going to present you with your first check – 10,000 dollars.
“I thought there’s something incredibly wrong. Why are we working for nickels and dimes when he’s making millions?”
The Backstreet Boys felt the same way, taking legal action to get out of the deal they’d signed with Transcontinental.
They discovered that the man they’d called “big poppa” was taking 43 percent of the profits from the £150 million the boy band had earned.
A deal was struck whereby they paid Pearlman £50 million to sever ties with him in 1998.
It proved to be a good move because the Backstreet Boys are the biggest selling boy band of all time shifting over 100 million albums.
A year later NSYNC also came to an out-of-court settlement after claiming that Pearlman was taking half of the profits rather than the one sixth in the original agreement.
Timberlake once said he’d been “financially raped by a Svengali” during that time.
What none of them realised was that a huge chunk of the money was going to both bands’ original record label, BMG in Germany, and that Transcontinental was worth thousands rather than millions.
Pearlman’s extravagant spending on limousines, helicopter rides, huge meals and lavish gifts was also draining funds.
That was kept from investors thanks to Pearlman’s counterfeiting schemes.
He sent out healthy financial statements from the German Savings Bank and an accountancy firm named Cohen and Siegel, neither of which existed.
Transcontinental offered interest of over nine percent and people put their life savings in.
Pearlman’s reputation for exploiting teenage band members didn’t deter others from signing record deals with him.
In 2000 he searched for a new act via the reality TV show Making The Band.
The winners were O-Town, who reached number three in the singles charts with All or Nothing a year later.
He could identify your dream and sell it back to you
Michael Johnson
Aaron Carter, whose older brother Nick was in Backstreet Boys, was also having hits for Pearlman at this time.
The troubled child star got out of his deal in 2002, ended up bankrupt 11 years later and died in 2022 aged just 34.
Take 5, LFO, B4-4, Natural and Hulk Hogan’s daughter Brooke were some of the other acts who took their chances with Pearlman.
Michael Johnson, a singer with Natural, recalls: “He could identify your dream and sell it back to you.”
He told Natural they’d have a hit album within a year and 11 months later their record went gold.
There were longstanding rumours that eternal bachelor Pearlman was a bit too keen on viewing the abs of his young steeds.
In 2007 Vanity Fair magazine published an article claiming that Pearlman would get into bed naked with teenage male wannabe stars and show them pornographic movies.
Steve Mooney, one of his assistants, said: “I would absolutely say the guy was a sexual predator.”
Later Rich Cronin from LFO alleged that Pearlman had attempted to grope his private parts.
But Pearlman denied it, as do former associates in the Netflix documentary.
Patrick King, from Natural, who lived in his mansion for seven years, claims: “I never saw anyone stay the night there.”
With his new acts failing to reach the heights of the Backstreet Boys or NSYNC, Pearlman no longer had the funds to pay off his creditors.
In 2006 one of his closest business partners, Frankie Vasquez Jnr killed himself, aged just 45, after encouraging his mum to put her hard earned cash into Transcontinental.
His mum Julia says: “You don’t know how difficult it is to lose a son. Lou Pearlman took my son away from me.”
Around this time shady men started turning up at Pearlman’s sprawling Florida mansion asking for their money back and when articles appeared in the press about his dodgy deals so did everyone else.
At this point his Ponzi scheme collapsed because no one else was putting in the cash to prop it up.
With mobsters and the FBI on his tail, Pearlman flew to Dublin with Johnson, 41, who had started a TV business with him.
Michael recalls: “It turns out we were on the run from the FBI and he was a fugitive.”
After Transcontinental’s offices were raided in 2007, the music svengali’s face was all over the news.
A guest spotted him at a hotel in Bali, Indonesia, and he was arrested.
Pearlman pleaded guilty to conspiracy, money laundering, and false bankruptcy in 2008 and was sentenced to 25 years in jail.
The overweight convict died in a Miami prison following a heart operation.
Despite the trail of destruction he left behind him, Pearlman still has a remarkable legacy of turning unknown performers into megastars.
Chris concludes: “We should remember Lou as a crook who got what he deserved, but at the same time there was a crazy explosion in Orlando, Florida with an idea.”
Dirty Pop: The Boy Band Scam streams on Netflix from July 24.
East 17: Singer Brian Harvey was sacked after he proclaimed ecstasy was “safe” and “increases the love between people”.
Take That: Fell apart after amid Robbie Williams’ increasing abuse of drug and alcohol.He had a near-fatal overdose the night before the group was scheduled to perform at the MTV Europe Music Awards in 1994. He checked into rehab but quit the band in July 1995.
Backstreet Boys: Nick Carter admitted going off the rails after hooking up with Paris Hilton. “During the height of my problems, I did ecstasy, cocaine and drank a large bottle of vodka a night,” he later wrote.
Blue: The noughties legends had a slew of scandals including bankruptcy and substance abuse. Lee Ryan battled alcoholism, and admitted he drank a bottle of whisky a night. The band also admitted to taking magic mushrooms in their tell-all book Blue: All Rise, Our Story. Anthony Costa also found himself skint and sofa-surfing, at one point living on £45 a week.
