Lou Pearlmans Billion Dollar Disgrace and fall from grace part 2.

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It was during this period, in 1997 and 1998, that the first allegations of inappropriate behavior involving Pearlman appear to have surfaced. One incident centered on the youngest of the Backstreet Boys, Nick Carter, who in 1997 turned 17. Even for many of those closest to the group, what happened remains unclear. “My son did say something about the fact that Nick had been uncomfortable staying [at Pearlman’s house],” Denise McLean says. “For a while Nick loved going over to Lou’s house. All of a sudden it appeared there was a flip at some point. Then we heard from the Carter camp that there was some kind of inappropriate behavior. It was just odd. I can just say there were odd events that took place.”

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Neither Nick Carter nor his divorced parents, Robert and Jane Carter, will address what, if anything, happened. But at least two other mothers of Pearlman band members assert Jane termed Pearlman a “sexual predator.” Phoenix Stone says he discussed the matter with both Nick and his mother. “With Nick, I got to tell you, this was not something Nick was comfortable talking about,” says Stone. “What happened? Well, I just think that he finally, you know, Lou was definitely inappropriate with him, and he just felt that he didn’t want anything to do with that anymore. There was a big blowup at that point. From what Jane says, yes, there was a big blowup and they confronted him.”

 

In a telephone interview, Jane Carter stops just short of acknowledging Pearlman made improper overtures to her son. “Certain things happened,” she tells me, “and it almost destroyed our family. I tried to warn everyone. I tried to warn all the mothers.” Told that this article would detail allegations that Pearlman made overtures to other young men, she replies, “If you’re doing that, and exposing that, I give you a big flag. I tried to expose him for what he was years ago.… I hope you expose him, because the financial [scandal] is the least of his injustices.” When I ask why she won’t discuss it further, Carter says she doesn’t want to jeopardize her relationship with Nick. “I can’t say anything more,” she says. “These children are fearful, and they want to go on with their careers.”

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Since Pearlman’s financial collapse, a number of his onetime band members have told Vanity Fair they experienced behavior that many would consider inappropriate. Much of what is described occurred at Pearlman’s two Orlando-area homes, the white house he owned on Ridge Pine Trail and, after 1999, the sprawling Italianate mansion he acquired from Julian Benscher, in suburban Windermere. Tim Christofore, who joined Pearlman’s third boy band, Take 5, at the age of 13, remembers one sleepover when he and another boy were dozing and Pearlman appeared at the foot of their bed, clad only in a towel. According to Christofore, who now runs a small entertainment business in St. Paul, Minnesota, Pearlman performed a swan dive onto the bed, wrestling with the boys, at which point his towel came off.

 

“We were like, ‘Ooh, Lou, that’s gross,'” Christofore recalls. “What did I know? I was 13.”
On a separate occasion, Christofore and another band member telephoned Pearlman to say they were coming to his home to play pool. When they arrived, Pearlman met them at the door naked, explaining he was just getting out of the shower. Another time,

Christofore remembers, Pearlman showed him security-camera footage of his girl group, Innosense, sunbathing topless. On still another occasion, Pearlman invited all five band members to watch the movie Star Wars in his viewing room. At one point the film switched off and was replaced by a pornographic movie. At the time, Christofore says, “We just thought it was funny. We were kids. We were like, ‘Great!'”
“No one ever complained,” says Tim’s mother, Steffanie. “Most of the stuff, we learned about only after the group broke up [in 2001].

 

Lou played this game of trying to alienate the parents. Every time he dropped the boys off, it was ‘Don’t tell the parents anything.’ They pretty much had a pact with him and they kept it.” Only later did Merrily Goodell, who had two sons in Take 5, learn that Pearlman had taken one to a strip joint. “Did Lou rape my boys? No, he didn’t,” she says. “But he put them, and a lot of others, in inappropriate situations. I know that. To me, the man is just a sexual predator.”

To this day, the question of Pearlman’s behavior remains a sensitive topic among former members of his boy bands. For every young man or parent who says he experienced or saw something inappropriate, there are two who won’t discuss it and three more who deny hearing anything but rumors. More than a dozen insiders told me they heard stories of Pearlman’s behavior while insisting they experienced nothing untoward themselves. Asked who might have been targets of Pearlman’s overtures, the names of seven or eight performers are repeatedly mentioned. Only two of these men would talk to me, and while one acknowledges hearing stories from other boys of inappropriate behavior, both strenuously deny experiencing it themselves.

 

“None of these kids will ever admit anything happened,” one attorney who has sued Pearlman told me. “They’re all too ashamed, and if the truth came out it would ruin their careers.”

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Among the few who will discuss Pearlman’s behavior in detail is one of his former assistants, Steve Mooney. In 1998, Mooney, then a strapping 20-year-old with flowing blond hair, was trying to get started as a singer when a Pearlman aide approached him at an Orlando mall, where he was working at an Abercrombie & Fitch store, and told him, “The big man wants to see you.” Mooney visited Pearlman in his Sand Lake Road offices and performed a Michael Jackson song, but instead of a singing job Pearlman offered him a job as his personal assistant. Pearlman explained that JC Chasez of ‘NSync had gotten his start this way. Mooney signed on, and Pearlman soon invited him to live in his home. All the time Pearlman held out the chance that Mooney could join one of the groups he was planning, called O-Town. According to Mooney, Pearlman told him, “By this time next year, you’ll be a millionaire.”

 

From the outset, Mooney noticed how Pearlman enjoyed hugging him, rubbing his shoulders, and squeezing his arms, usually in conjunction with one of his odd pep talks. “He would say, ‘Do you trust me?’ [And I would say], ‘Of course I trust you, Lou,'” Mooney recalls. “He always said, ‘I want to break you down, then build you up, so we can be a team together.’ Then he would say, ‘Your aura is off,’ so he begins rubbing my back. I was like, ‘Whoa!’ And he’s going, ‘It’s O.K., we’ve got to get your aura aligned.'” It got to the point, Mooney says, where every time they were alone Pearlman would rub his muscles. “As soon as the elevator doors close, he would grab you and rub your abs,” he recalls. “The first few times, it’s O.K. But it gets to be too much. It’s like you have this creepy friend who’s always touching you.”

 

“That was the line, the ‘aura,’ I definitely heard that aura bullshit,” says Rich Cronin, lead singer of the Pearlman band LFO. “It took everything in me not to laugh. He was like, ‘I know some mystical fricking ancient massage technique that if I massage you and we bond in a certain way, through these special massages, it will strengthen your aura to the point you are irresistible to people.’

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“I swear to God,” Cronin goes on, “I had to bite my cheeks to stop from laughing. I mean, I now know what it’s like to be a chick.… He was so touchy-feely, always grabbing your shoulders, touching you, rubbing your abs. It was so obvious and disgusting.… He definitely came at people. He came at me. In my situation I avoided him like the plague. If I went to his house, I went with somebody. I would never go with him alone. Because I knew every time I was over there by myself it always led to some weird situation. Like he’d call late at night to come over and talk about a tour, and you’d get there and he’d be sitting there in boxers. The guy was hairy as a bear.”

 

Steve Mooney shared his concerns with his father, who joined the two for dinner. While they ate, Mooney says, Pearlman kept putting his hand on his leg. Finally he asked him to stop. Afterward, he was surprised when his father said Pearlman seemed O.K. “It’s weird,” Mooney says. “But when you start talking about the money and fame, it’s like Lou’s got this mind control over people.”

 

Mooney remembers having a heart-to-heart talk with a young man I’ll call “Bart,” a singer in a second-tier Pearlman band. “I said, ‘[Bart], does he ever grope you?,’ and he said, ‘Yeah, all the time,'” Mooney recalls. “[He said] Lou once grabbed him ‘down there.’ I said, ‘Well, what do you do about it?’ [He said], ‘Look, if the guy wants to massage me, and I’m getting a million dollars for it, you just go along with it. It’s the price you got to pay.'”

 

On several occasions in the late 1990s, Phoenix Stone says, he felt obliged to confront Pearlman over his behavior. “We were trying to build a company, you know, build a brand, a worldwide brand,” says Stone. “And this kind of thing, I mean, it looks bad for your reputation. We didn’t want the reputation of Lou as a predator.… So, yeah, I did have a conversation with him. I was worried about the under-aged kids. He never admitted to being gay or anything. I said, ‘Look, I know exactly what time it is with you, and I don’t care whether you’re gay or not, but this is a business, and you can’t come on to these guys like this. And if you do, none of them can be under-aged.’ He just kind of laughed and said, ‘I got it all covered, I got it all covered.’ This was still at the height of [his fame].”

“I tried to protect the kids,” says the publicist Jay Marose. “You’d see Lou kind of moving in on one of them, and you’d just tell someone, Get that kid away from Lou before it’s too late.”

 

Living at Pearlman’s home, Steve Mooney believed he saw firsthand the price many young men were paying. Pearlman’s bedroom lay behind a pair of double doors, and when they were closed, Mooney knew not to intrude. More than once, he says, he encountered young male singers slipping out of those doors late at night, tucking in their shirts, a sheepish look on their faces. “There was one guy in every band—one sacrifice—one guy in every band who takes it for Lou,” says Mooney, echoing a sentiment I heard from several people. “That’s just the way it was.”

 

As Mooney tells it, matters came to a head in 2000, during the final stages of the O-Town selection process. Pearlman was resisting his entreaties to join the group. According to Phoenix Stone, who consulted on the selection process, he and Pearlman were at his home late one night discussing Mooney’s future when Pearlman telephoned Mooney, explaining he needed someone to take out the garbage.

 

“It was very clear to me what was going on,” Stone recalls. “I stopped it right then and there. When Lou called Steve, they had an argument. Steve got very mad, you know, [saying], ‘I’m not coming over.’ [I said to Pearlman], ‘If it’s about the garbage, there’s plenty of people who can take out your garbage. If it’s not, well, leave the kid alone. It’s late.'”

 

Stone left, believing the matter had been resolved. In fact, Mooney says, there was a second phone call. At Pearlman’s insistence he drove to the mansion at two a.m. and found Pearlman in his office, clad in a white terry-cloth bathrobe. A long argument ensued. It climaxed, Mooney says, when he beseeched Pearlman, “What do I have to do to get in this band?” At that point, Mooney says, Pearlman smiled.

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“I’ll never forget this as long as I live,” Mooney says. “He leaned back in his chair, in his white terry-cloth robe and white underwear, and spread his legs. And then he said, and these were his exact words, ‘You’re a smart boy. Figure it out.'”
Mooney says he left the house without further incident. He knew, however, that his days with Pearlman were numbered. Afterward, in an effort to protect himself, he says, he returned to Pearlman’s office when Pearlman was out. He had perused Pearlman’s private files in the past, curious to see what they contained. Now he removed three items he had seen before: a photo of a longtime Pearlman aide posing as a Chippendales dancer; a photo of Pearlman and one of the Backstreet Boys on a ski vacation, apparently alone; and a photo of a young singer naked in Pearlman’s sauna, his hands covering his genitals.

 

After making copies of the photos, Mooney says, he contacted the aide who posed as a dancer. “I went to [him] and showed it all to him,” he says. “He’s like, ‘Listen, all you got to do is keep your mouth shut and you’re in this company for life. That photo? I’d burn it.'” When Pearlman learned of the theft he confronted him. Mooney says he turned over the copies and resigned. Today he sells real estate in Orlando. “Nobody will talk about this stuff,” Mooney says, “but plenty of guys were willing to go along to get what they wanted.”

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In late 2000, Phoenix Stone and Sybil Hall say, they took an odd phone call from Pearlman: he said he had found a listening device in his home. The two joined Pearlman in an impromptu grilling of an assistant, a young man I’ll call “Jeremy,” who according to several people had begun an affair with Pearlman. Stone and Hall say Jeremy admitted to placing the device because he was jealous of the attention Pearlman was lavishing on another young man, whom I’ll call “Peter,” a member of one of Pearlman’s bands. “He told me that he and Lou were in a relationship and that he thought Lou was cheating on him with [Peter],” Hall recalls. “He wanted to find out what they were doing.” Jeremy couldn’t be located for comment, but after his dismissal—Hall and Stone say he received an Escalade to keep quiet—Peter continued to work for Pearlman for years.
Despite innuendo that dogged him for years, Pearlman faced the prospect of public allegations only a handful of times.

 

Once, an unidentified male singer—there may have been more than one—made it clear to Pearlman that he was about to go public. Pearlman’s longtime attorney, J. Cheney Mason, of Orlando, confirms that he turned the matter over to the F.B.I. for investigation as a possible extortion. No charges were ever brought, the boy or boys never went public, and Mason, despite filing suit against Pearlman for unpaid legal fees, says he never heard a single reliable account of improper behavior on Pearlman’s part.

 

Almost from the moment Pearlman achieved his first real success in the music industry, in 1997, the foundations of his little empire began to quake. It started when one of the Backstreet Boys, Brian Littrell, couldn’t understand why he was seeing so little income from their nonstop touring and European record sales; Littrell hired attorneys who calculated that, while Pearlman had taken in several million dollars in revenue since 1993, the five singers had received barely $300,000, about $12,000 per member each year. Littrell sued, and in May 1998, his bandmates joined the litigation; during discovery they learned that, among other things, Pearlman was paid as the sixth member of the band.

 

“He totally deceived me,” Kevin Richardson told Rolling Stone in 2000. “It’s ‘We’re a family, we’re a family,’ then you find out ‘It’s about the money, it’s about the money, it’s about the money.'” Pearlman and the band eventually reached a series of settlements, details of which were never disclosed. In general, the band got cash and its freedom; Pearlman retained a portion of its future revenues.

 

In the wake of the Backstreet lawsuit, Pearlman’s bands began to realize how much of their income was flowing to Big Poppa. One by one they sued or disbanded. Despite success in Europe and Asia, Take 5 broke up in 2001; LFO, after two top-10 singles, did the same. The biggest loss by far was ‘NSync, whose members sued, settled, and broke all ties with Pearlman in 1999, a struggle memorialized by the title of their platinum-selling 2000 album, No Strings Attached. None of ‘NSync’s members would comment for this article, but in a 2006 interview, Justin Timberlake said the band felt it “was being financially raped by a Svengali.”

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After that, the lawsuits just kept coming. The Backstreet Boys’ first managers, Jeanne Williams and Sybil Hall, sued. Phoenix Stone sued. Pearlman ran up $15 million in legal bills with just one lawyer, J. Cheney Mason. Yet even with all the legal fees, Pearlman, who retained royalty interests in both ‘NSync and the Backstreet Boys, was still swimming in cash. He bought the 12,000-square-foot lakeside mansion in suburban Windermere, along with two condominiums in Orlando, a waterfront condo in Clearwater, two Las Vegas penthouses, a house in Hollywood, and an apartment in Manhattan. He had at least two Rolls-Royces.

 

The slowing of the boy-band craze in 2001 and 2002, however, meant Pearlman needed new income streams to keep paying his investors. He signed a slew of new artists, but none, other than Nick Carter’s brother, Aaron, a solo act, had any real success. Pearlman tried to break into Hollywood, developing a script titled Longshot, written by Tony DeCamillis, the once banned stockbroker. As its stars Pearlman cast one of his singers, a teenager named Joey Sculthorpe, more than a dozen Trans Con artists, and Britney Spears, the Rock, and Justin Timberlake in a series of cameos. Released in 2002, Longshot was a complete flop. According to one source, the movie cost $21 million and brought in barely $2 million.

 

Chastened, Pearlman next attempted to capitalize on his image as a molder of young talent, co-producing the successful Making the Band series for ABC and MTV and, in September 2002, acquiring a controversial talent-scouting bureau known as Options Talent. The Options acquisition proved a nightmare; several of its executives had criminal records, and its clients, mostly young people seeking careers in acting and modeling, had filed hundreds of complaints with Better Business Bureaus around the country alleging they had received little in return for fees they paid.

 

Under Pearlman, Options endured a series of name changes, a lengthy Florida state investigation into its methods—Pearlman was never charged with any wrongdoing—and a 2003 bankruptcy before emerging as a new company called Talent Rock, a small and rarely profitable business that held open casting calls for singers, actors, and models at venues around the U.S. and Mexico.

 

While Pearlman’s celebrity dimmed, he remained a star in Orlando, where he was given a key to the city and named an honorary sheriff’s deputy. In 2003 he used this goodwill to strike a deal with the city council to assume control of the Church Street Station complex, a cluster of historic buildings in downtown Orlando. Promising to refurbish the complex and create 500 jobs, Pearlman relocated all his businesses there, and, despite construction delays, the opening of several restaurants and stores in the next several years slowly brought Church Street back to life.

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Still, by 2004, Pearlman had yet to find anything to replace the income lost from Airship International, ‘NSync, and the Backstreet Boys. He continued pumping out new singing groups, including a Latin boy band and a Euro boy band called US5, but none caught fire. Yet his hundreds of investors still needed to be paid.

 

In time he faced the squeeze every Ponzi scheme ultimately confronts—where to find new cash to pay the old investors. In 2003, with his cash crunch growing worse by the month, he began taking out bank loans. In the next three years, in 13 separate loan packages, Pearlman pledged every asset he possessed in return for cash: the condominiums, the mansion, Church Street, his three airplanes, even his shares of band royalties. In return he received about $156 million. Just as important, he gained time.

 

The mind-boggling thing is that not one of Pearlman’s new banks discovered that the emperor had no clothes. Not one realized that his largest asset by far, Trans Con Air, didn’t exist. Not one realized that his financial statements and tax returns were a tissue of lies. In hindsight, these deceptions should have been easy to discern. All it would have taken was a single phone call to Harry Milner, the attorney who signed Pearlman’s returns. Milner wouldn’t have come to the phone.

Because he was a dead man.

 

For Pearlman, the beginning of the end came in mid-2004, when 72-year-old Joseph Chow succumbed to pancreatic cancer in a Chicago hospital. Over the years Chow had become Pearlman’s dream investor, a virtually unlimited source of money with total faith in Pearlman’s promises of future riches.

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The loans, however, were a source of tension within the Chow family. “From the very beginning, my mom was very skeptical of Lou Pearlman,” recalls the Chows’ 32-year-old daughter, Jennifer. “She didn’t trust him. My parents argued about it quite a bit. She had me talk to my father a number of times, to see if we could get some money out. Or slow it down. My father would get very defensive. He just had so much confidence in Lou and everything he told him. He was always promising to expand into TV, movies, recording studios, the charter-airline business. He was always promising there would be an I.P.O.”

When Joseph Chow died, his family, faced with a large bill for estate taxes, had an uncle approach Pearlman about repaying the loans. “He told my uncle that he would think about it and try to work out a payment plan,” Jennifer says. “My uncle essentially responded, ‘What’s the situation with the I.P.O.?’ Lou sounded skeptical. That’s when Lou said to him, ‘If anything, Joseph’s investments are worth maybe 10 cents on the dollar.’ We were pretty stunned. Then Lou comes back and says he could repay a hundred thousand every quarter or so until the full $14 million was paid down. That wasn’t really acceptable.”

 

The Chows hired a lawyer. Before they could do more, however, Pearlman sued them, in a Chicago court, seeking to stop the family from demanding repayment. “We get sued and I’m scratching my head: why the hell does this guy want to be in my jurisdiction instead of Florida?” remembers the Chows’ attorney, Edwin Brooks. “It turns out the courts down there all have his number. They’re all sick of him.”

Filed in late 2004, the centerpiece of Pearlman’s lawsuit was what’s called a “forbearance letter,” in this case a one-paragraph note signed by Joseph Chow saying, in essence, that his loans could be forgiven if Pearlman didn’t feel like repaying. To Brooks the letter made no sense: why would anyone forgive $14 million in loans? “What really got me, late one night, poring over all these documents, was that Joseph Chow’s signature looked familiar,” Brooks recalls. “And so that’s when I started going through the notes my client had signed.

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Then I saw it. I grabbed one of the old letters, with his signature, held it up to the light, and compared it to the forbearance letter. The signatures were identical. Absolutely identical. You lay them over the top of each other, it’s one signature. At that point I realized I was looking at a forgery.” It would take another year, however, Brooks says, to gather the original loan documents, hire experts, and prove it.

 

In the meantime, after a counterclaim against Pearlman was filed, discovery got under way. Needing to study Pearlman’s finances, Brooks subpoenaed the accounting firm that had certified his financial statements. The firm’s name was Cohen & Siegel; it was the same firm that had been furnishing Pearlman’s statements since at least 1990. But when Brooks dispatched a process server to the firm’s Coral Gables headquarters, “the process server calls back and tells me, ‘There’s no accounting firm at this address, just a secretarial service,'” Brooks recalls. “At which point I realized I was onto something.”
Brooks deposed the woman who ran the secretarial service. She said Cohen & Siegel had no offices or employees she knew of; Pearlman had simply paid her to take calls on its behalf.

 

When a call came in, she forwarded it to Pearlman himself. “He paid for the whole thing,” Brooks says. “I realized there was no accounting firm.” Not long after, Brooks discovered a Cohen & Siegel Web site, apparently a new one. “Lou claimed it was a German accounting firm, but it was a joke,” Brooks says. “It had no contact information. We hired investigators to find it. It didn’t exist.”

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By the middle of 2005, the Chow family and its attorney had solid evidence Pearlman had perpetrated a massive fraud. Other investors, however, knew nothing of this and continued to shovel money Pearlman’s way. He needed it—badly. By 2006 few if any of his remaining businesses—a handful of obscure bands, Talent Rock, Planet Airways, the recording studio, the delis, and a few restaurants—were making money, yet Pearlman, thanks to bank loans, kept mailing interest checks to hundreds of investors. He was able to borrow from an Indiana bank as late as August 2006, but by then he was all but broke.

 

Soon after, investors stopped receiving their checks. That September, Steven Sarin, the dentist, heard rumors of the Chow family’s litigation. Sarin’s family had given Pearlman so much money—$12 million—that he still lived in a studio apartment, awaiting the day Pearlman went public. When Sarin telephoned, Pearlman dismissed the Chow litigation as a mix-up.

 

A few weeks later he went to Queens and met Steven Sarin and his brother, Barry, at their usual spot, Ben’s Deli, in Bayside. Barry demanded his money back. “Lou said, ‘No problem—I can pay you back with one hubcap from my Rolls-Royce,'” Steven recalls. “He showed us a financial statement showing we’re doing phenomenal. He told us Trans Con had 60 jets. It was only after the meeting was over, I remember, I noticed for the first time in 22 years he didn’t use a credit card for the meal. He paid in cash.”

 

The Sarins would never see their money again. Nor would many of Pearlman’s aides, including Frankie Vazquez Jr., who had been at his side since boyhood; Vazquez’s father had been the super at Mitchell Gardens. In early November, when Vazquez sought to withdraw a portion of the $100,000 or so he had with Pearlman, “Lou told him he was on his own, the money was gone,” recalls Kim Ridgeway, a friend of Vazquez’s. “After all the years Frankie had devoted to Lou, he turned his back on him. Frankie, I knew, felt totally betrayed.”

 

Afterward, Ridgeway says, Vazquez grew distraught. He couldn’t sleep. On November 11, a neighbor heard a car running for several hours in his garage. Police were called. Opening the garage, they found Vazquez sitting in his white 1987 Porsche, the motor running, a T-shirt wrapped around his head, dead.

 

The state of Florida’s Office of Financial Regulation began examining Trans Con’s eisa program after investors started complaining in the fall of 2006. Pearlman did his best to delay state auditors, but when word of the probe leaked to the press in mid-December, he knew the end was near. According to one report, he attempted to buy an apartment in Berlin, but the purchase fell through. He began selling or giving away his automobiles, including a Rolls, and laying off Trans Con employees. He stopped paying his banks, and they began to sue. Every day last January seemed to bring a new lawsuit. Just days before the state filed its own lawsuit charging Pearlman with operating a Ponzi scheme, a group of banks petitioned an Orlando judge to place Trans Con in bankruptcy. An attorney named Jerry McHale was assigned to begin liquidating Pearlman’s assets.

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By the time McHale entered Trans Con’s offices on February 2, there had been no sign of Pearlman for weeks. “The situation was a disaster,” McHale recalls. “There were actually no employees left when I arrived. It appeared that everyone was aware that this thing was falling apart and had just left.” That same day, Pearlman wrote an e-mail to the Orlando Sentinel from Germany, where the night before he and his band US5 had attended an industry awards show. While declining to comment on the allegations against him, he said, “My executive team and I are working hard to resolve the issues.”

 

It was over. In mid-February the F.B.I. raided Pearlman’s mansion, hauling out cartons of documents and quizzing his assistant when he drove up in Pearlman’s last Rolls, a bright-blue model with “LP” license plates. At the same time, Jerry McHale gained entrance to Pearlman’s office computers and realized the enormity of the scandal. All told, McHale identified $317 million in missing money that was supposed to be in Trans Con’s eisa accounts, not to mention the $156 million in vanished bank loans.

 

There was no money left. McHale got busy selling Pearlman’s remaining real estate and his last functioning business, Talent Rock, for next to nothing. His only real success came when he received an anonymous tip that Pearlman, wherever he was, was attempting to transfer $250,000 from an account at the Bank of New York to Germany. McHale managed to get the money frozen before it left the U.S.

 

By the time McHale wrapped up his work, in April, there had been no reliable sighting of Pearlman for six weeks. There were reports he had been seen in Israel, Belarus, and Brazil. Every day more angry investors thronged to one of several blogs dedicated to the scandal to pour out their rage and hatred. But Big Poppa was gone.

 

Thorsten Iborg, a 32-year-old German computer programmer, arrived on the Indonesian island of Bali on June 9, checking into the five-star Westin Nusa Dua resort for a scuba vacation with his wife. After a day or two, Iborg noticed a pale, overweight American on the terrace. Back in Germany he had seen a newsclip about boy bands, and he was certain the man was Pearlman. Later, Iborg found himself sitting beside the man in the hotel’s Internet café. It was him. He was sure.

Pearlman arrives at court in Orlando, Florida, on July 11, 2007.

At breakfast on June 14, Iborg secretly snapped a photo of the man. Scanning the Internet, he found a blog written by a St. Petersburg, Florida, newspaper reporter, Helen Huntley, which was jam-packed with articles and complaints written by people Pearlman had scammed. Iborg uploaded the photo and e-mailed it to Huntley.

 

Huntley turned everything over to the F.B.I. Agents attached to the American Embassy in Jakarta appeared at the Westin the next day and led Pearlman away; he had been registered under the name “A. Incognito Johnson.” His passport stamps indicated he had spent time in Panama before arriving in Bali. U.S. marshals loaded him onto a plane to Guam, where he remained in jail for nearly a month before being returned to Orlando in mid-July.

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At the end of June, federal prosecutors had announced his indictment, on three counts of bank fraud and single counts of mail and wire fraud.
Pearlman sat in Orlando’s Orange County Jail. Repeated calls to his court-appointed attorney went unreturned.

 

Indeed, Pearlman’s entire Trans Continental empire was built on fraud, and 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.

“You know, I deeply regret what happened,” he told THR in 2014. “And I’ll be back.”

In 2016, Lou Pearlman died he was 62.

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