MUSIC mogul Lou Pearlman created the biggest boy bands of the ’90s — and one of the largest Ponzi schemes in history.
Read on to find out who the late music manager was, and why he was jailed.
Who was Lou Pearlman?
Lou Pearlman was the talent manager who discovered the Backstreet Boys and N’SYNC in the ‘90s.
He had even more success in the following years, forming and managing a number of top US bands and artists.
But Pearlman was jailed in 2008.
He was handed a 25-year sentence connected to one of the US’s most notorious Ponzi schemes, which saw him defraud investors of over $1 billion.
He died behind bars in 2016.
Which boybands did Lou Pearlman create?
Lou Pearlman started a talent search in the ‘90s for a new boyband to rival the success of US group New Kids on the Block.
The five young men he discovered became the Backstreet Boys, and they went on to become one of the best-selling boybands of all time.
They’ve sold over 100 million records worldwide, and were the first group since Led Zeppelin to have their first ten albums reach the top ten in the US Billboard chart.
Pearlman then went on to form Justin Timberlake‘s group N’SYNC, who went on to take the pop crown from the Backstreet Boys.
Their 2000 album No Strings Attached went on to become the second biggest selling of the decade in the US – beaten only by The Beatles’ greatest hits album, 1.
His success continued when he put together O-Town.
They were put together on MTV show Making The Band in 2000, and they went on to have a number of top ten hits in the US and around the world.
They were also named Breakout Artist of the Year at the 2001 Teen Choice Awards.
They split in 2003 – but have since reformed.
What Ponzi scheme is Lou Pearlman accused of?
In 2006, investigators discovered Lou Pearlman had defrauded investors out of more than $1 billion.
Concerns had been raised by the artists and bands he was managing, and he was sued in a federal court for misrepresentation and fraud.
They’d been promised vast amounts of money, but Pearlman and his company only awarded them a fraction of what they expected while he made millions.
It came to light he’d come up with a scam that encouraged people to invest in a company called Trans Continental International Inc.
The then 14 year old Aaron Carter filed a lawsuit in 2002 that accused Pearlman and Trans Continental of cheating him out of hundreds of thousands of dollars.
Pearlman used fake insurance documents to encourage investors to put their money into his scheme.
He also used fake financial statements to secure bank loans.
The increasing popularity and fame of his artists allowed him to expand this further and attract even more money.
The family of one of his investors grew suspicious when they looked through papers, and said they had solid evidence of fraud being committed.
They alerted others who’d put money into the company that they weren’t going to get any of it back, which led to Florida’s Office of Financial Regulation investigating things more closely.
When it came to light he’d been running a huge fraud, most of the money he’d collected from investors – at least $95 million – was gone.
Pearlman disappeared from the US, but was eventually arrested the following year after being spotted in Indonesia.
In 2008 he was sentenced to 25 years in prison on charges of conspiracy, money laundering, and making false statements during a bankruptcy proceeding.
Lou Pearlman my old manager died in prison… Rip Lou not the best business guy really at all but he did discover me karma is real.”
Aaron Carter
How to watch Dirty Pop: The Boy Band Scam
Dirty Pop: The Boy Band Scam is a documentary on streaming service Netflix.
It promises to uncovers Pearlman’s web of lies, revealing the harsh realities of fame, power, exploitation and greed.
It’s available to watch from July 24, 2024.
Netflix have a number of packages, including one that’s supported by adverts, or more expensive ones that are ad-free and offer improved picture and sound.
Viewers can watch shows through their Smart TV or through their phone or tablet.