Lou Pearlman Used Success with Boy Bands to Launch Ponzi Scheme
While he was most known for managing the success of the hit boy bands NSYNC and the Backstreet Boys, Lou Pearlman actually made the bulk of his wealth by running an illegal Ponzi scheme. All of the details were recently revealed in the YouTube Original documentary “The Boy Band Con.”
Boy Band Business
Nobody will argue that Pearlman was instrumental in the success of two of the most popular boy bands of all time. According to Pearlman, he provided the boys with everything that they needed to launch their careers, including tutors, vocal lessons, and choreographers.
However, the band members said that they were given pennies to live off as Pearlman profited from their success.
Entering the Ponzi Scheme
After Pearlman made the big bucks on the backs of the boy bands, he founded a business group by the name of TransContinental. He used this group to launder over $1 billion, making it one of the most profitable Ponzi schemes in history.
Pearlman broke no shortage of laws as he dove deeper and deeper into his Ponzi scheme. Included in the list of transgressions were false claims that investor money was insured by AIG, the FDIC, and Lloyd’s of London. Pearlman also falsified financial statements and tried to flee the country once he came under investigation.
Pearlman was eventually convicted and subsequently sentenced to 25 years in jail because of his illegal activities. He was convicted on conspiracy charges, money laundering, and more.
He passed away in 2016 while serving his prison sentence at a federal institution in Miami, Florida. He was 62 years old when he suffered a fatal heart attack.