The record producer who scammed boy bands, investors, and banks out of millions.
Lou Pearlman is the record producer behind boy bands Backstreet Boys and *NSYNC. He formed the groups and made them stars, while gaining their trust and acting as a father figure. Lou was accused of grooming and sexually abusing teen singers, as well as running off with their earnings before being prosecuted for his involvement in one of the longest running Ponzi schemes in history.
*This is not an exact transcript, but rather an outline of my notes.
Lou Pearlman is the record producer behind boy bands Backstreet Boys and *NSYNC. He formed the groups and made them stars, while gaining their trust and acting as a father figure. Lou was accused of grooming and sexually abusing teen singers, as well as fucking up their contracts and running off with their earnings before being prosecuted for his involvement in one of the longest running ponzi schemes in history.
My main sources for this episode are the documentary The Boy Band Con: The Lou Pearlman Story and a Vanity Fair article from 2007 called Mad About the Boys.
Lou was born in 1954 and grew up in Flushing, Queens. He really liked blimps growing up and by his 20s he started a business where he would buy old blimps or helicopters or jets and flip them like how people flip houses, and then he would lease them out like a taxi or an uber system.
In 1980, he formed a company he called Airship Enterprises Ltd. and persuaded the owners of Jordache Jeans to lease a blimp for advertising purposes. But Lou didn’t actually have a blimp or the money to buy one, so he instead purchased a used balloon “envelope” from a guy in California and hired an aluminum contractor to build a frame for it at a naval base in Lakehurst, New Jersey; the same place where the German zeppelin Hindenburg crashed in flames, in 1937.
On its inaugural flight on October 8, 1980, the blimp took off and made it less than a mile before losing altitude and forcing the pilot to crash-land in a garbage dump.
“Lou never intended to fly that blimp,” asserts Gross, who says the airship hadn’t flown anywhere near the number of practice runs required under federal law. “He could have been arrested if it had left that base.”
Lou was awarded $2.5 million dollars from the insurance company. He used this money to finance more aircraft and he takes money from investors to fund his lifestyle, which included taking people out and paying every tab to show off, hiring private jets and helicopters for every business trip; every meal seemed to be a dozen people on the company’s tab.
One way Pearlman protected himself was hiring inexperienced people. “None of these guys knew anything,” remembers Jay Marose. “If you needed a decision made, they would listen to you and go, ‘Uh-huh, uh-huh, uh-huh,’ and then go back to Lou.”
One of the bands that chartered his planes was New Kids On The Block, and Lou learned that they were grossing $100 million a year. He decided “I’m in the wrong business” and switched careers.
In early 1992, Lou placed an ad in the Orlando Sentinel, announcing auditions for teenage boys to form a band. One of the first to audition was A.J. McLean (15), who became the group’s first member. Hundreds of teenage boys went to audition at Lou’s home or at his hangar in Kissimmee in 1992-1993 . Eventually, four young men—Brian Littrell (17), Nick Carter (13), Kevin Richardson (21), and Howie Dorough (15)—were selected for the group. They all went to Lou’s home and sang a song together. They sounded fantastic. Pearlman came up with a name, the Backstreet Boys, after Orlando’s Backstreet flea market.
The Backstreet Boys performed their first show at SeaWorld in May 1993 before heading on tour appearing at amusement parks and malls. Within a year, they had a deal with Jive Records. Their first single was ignored in the US but their first album became a smash hit in Europe. Throughout these tours, Lou would act as a father figure to the boys and tell them they were all family, urging them to call him “Big Poppa.”
Before the Backstreet Boys really found success in the US, Lou decided to start a second group. Chris Kirkpatrick, JC Chavez, and Justin Timberlake got together to try and form a boy band. Joey Fatone joined them, and then Lance Bass and his mother were contacted. As soon as Lance landed in the airport in Orlando, Lou had him picked up in a Rolls Royce. He said that it was red carpet treatment right off the bat. When he got to Lou’s home, the group of boys sang the Star Spangled Banner together. When they were finished they looked around at each other with their jaws dropped. They all high-fived each other, like this last guy just appeared and suddenly they have this amazing boy band.
Lou told the NSYNC boys that he wanted to get a house for the boys to all live together so that they would be able to rehearse and not have to worry about work or school, all of their tutoring and their lessons could be done at their home. NSYNC was constantly training and rehearsing, and while Backstreet Boys were known for their singing and their harmonies, NSYNC was known for their performance and their dancing as well as their singing.
Both the Backstreet Boys and the NSYNC boys spent all of their time working. But Lou made life a dream. He would take them to fancy dinners and on trips in private jets. While these boys were teens or young adults, they couldn’t fathom the kind of success that Lou appeared to have.
When the Backstreet Boys got their success in the US it was unstoppable. MTV made shows like TRL where stars, like boy bands, would appear and fans went insane. They had singles all over the charts and were selling out all of their concerts.
Lou wasn’t ready to present NSYNC, so they started feeling like the redheaded step child. They worked as hard as they could just to even get their foot in the door. So one day the Backstreet Boys were offered a gig for the Disney channel but the guys were absolutely burnt out so they turned it down. The gig was then given to NSYNC who were happy to take their sloppy seconds. That Disney special changed everything. They blew up and were now able to compete with the Backstreet Boys. Of course, this was a huge conflict of interest because they had the same manager. Worse yet, Lou would pin them against each other by telling each band that the other band was talking shit or doing something to fuck the other band over. The band members would see each other often and it was so uncomfortable, they were constantly worrying about confrontations from the other band.
Before long, both bands were super successful. Again, Lou was taking them on fancy trips and dinners. Or rather, the boys are under the impression that Lou was “taking them out” to dinner. It was implied that everything the boys ever did was free, on top of their earnings from working. When the boys got their first paychecks, it was devastating. They made only $10,000, even though they had been working 18 hour days and touring for months. It wasn’t even minimum wage, they could’ve made more money working at Starbucks. But Lou made millions.
Lance Bass went back to the hotel and ripped up the check. The guys contacted a lawyer and the lawyer was basically like “this is one of the worst contracts I’ve ever seen in music history, you’ve got to get out of this.”
Apparently, Lou had made himself the 6th member of NSYNC, meaning he was making the same amount as all the other guys for doing none of the work. This was also the moment the boys learned the word “recoupable”. Essentially, they learned that they were actually the ones paying for all the fancy dinners and the flights and the marketing and the bills for their home and all the things they had been thanking Lou for. Plus they were paying Lou a 6th of their salaries and buying his dinners and flights and shit. So he was literally stealing from them.
The NSYNC guys were absolutely livid, and their mothers felt super guilty and wanted to kill him. At this point, they saw him as family. So everybody and their mamas confronted Lou, but he felt that he was entitled to everything he had taken. The boys were shook, Lou flipped a switch on them. Where he was charming and a loving family figure in the beginning, he was now this entitled narcissist who was like “I absolutely deserve 90% so d0 you want 10% or do you want nothing?”
They decide to file a lawsuit in 1999 and when Lou got word of their plan, he sued them. He sued them for the name NSYNC and said that he was NSYNC. They were at risk of losing their label now, after all of the hard work they had put in.
Fortunately the judge was like “my daughter has a poster of these guys in her room, idk who tf you are”. So she sided with NSYNC and they got out of their contract.
With the Backstreet Boys it went a little differently. They had put some money aside and paid Lou to get out of their lives.
Upon their release from their contract, NSYNC became really pumped about producing a new album on their own, their first album without Lou. Thus was born No Strings Attached, which is literally about severing their ties to Lou. The song Bye, Bye, Bye has been thought to be about a breakup but it’s actually about their separation from Lou Pearlman.
2000- Making the Band
Lou created the show Making the Band. Even though there was talk about the scandals with NSYNC and the Backstreet Boys, young teens were still really excited to work with him because they knew he could make them stars. The first season of Making the Band focused on the band O-Town.
The girl band Innosense also struggled with the same issue, where they were aware their contracts were garbage but they were hopeful that they would eventually become big names anyway.
As it turns out, the financial manipulation wasn’t the only misconduct the teens experienced from Lou.
According to Ashley Parker Angel from LFO, the lead singer Rich Cronin told him a story where Lou told him something like “I have a big opportunity for you guys in Europe. This could be the make it or break it moment for LFO, this guy in Europe could be what you guys are looking for. All he wants to do is touch your penis. That’s just how they do business over there. We can’t blow this deal and I don’t want you to get freaked out so I’ll tell you what, I’m gonna let you practice on me.”
He also tells them “I studied psychology so don’t worry, I’ll help you get through it. But don’t fucking tell anyone.”
“Honestly, I don’t think Lou ever thought we would become stars,” says Rich Cronin, lead singer of the Pearlman boy band Lyte Funky Ones (LFO). “I just think he wanted cute guys around him; this was all an excuse. And then lightning crazily struck and an empire was created. It was all dumb luck. I think his motives for getting into music were very different.”
The girl bands like Innosense were often encouraged to use the tanning bed in Lou’s home. What they didn’t know was that Lou had recording devices in the room and would show the boys the videos of the girls getting naked to tan.
It’s been said that there was an incident that occurred with Nick Carter, who in 1997 turned 17. What happened remains unclear, even to those in the group.
Denise McLean, A.J.’s mom said, “My son did say something about the fact that Nick had been uncomfortable staying [at Pearlman’s house]. 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.” Neither Nick Carter nor his parents will address what, if anything, happened, but Jane, Nick’s mother, referred to Pearlman as a “sexual predator.”
In a telephone interview, Jane Carter said “Certain things happened, and it almost destroyed our family. I tried to warn everyone. I tried to warn all the mothers. 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 asked 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.”
Nick Carter’s younger brother, Aaron, was also being managed by Pearlman. He started performing in 1997 when he was just 9 years old. In 2002, Aaron’s parents filed a lawsuit against Lou alleging failure to pay hundreds of thousands of dollars in royalties on Aaron’s 1998 album. The suit was settled out of court.
What’s interesting about this is that Aaron defends Lou with his every breath. Lance Bass fought to have him appear on the documentary The Boy Band Con, because he thought Aaron would have some stories about Lou. But in reality he’s like crying, saying that he can’t believe anyone would make up these stories about someone like Lou who did so much for all of their careers.
I’m going to play you a clip of Aaron. I don’t know if you guys have seen him in recent years but he’s been going through a lot. He’s been struggling with an eating disorder and drug addiction, he’s confused about his sexuality. In my brain, I think Aaron Carter is dealing with childhood trauma and the way he defends Lou Pearlman looks and sounds a lot like Stockholm Syndrome. Again I’m not a mental health professional but take a listen for yourself.
Aaron completely denies that Lou ever recorded things at his house, even though literally everyone else said that you could see cameras all over Lou’s home and the control room was in Lou’s bedroom. But Aaron’s like “well then where’s the footage?! My mom made sure there was nothing weird, and my dad too!” He sounds childlike when he says this.
Interestingly, Aaron also hung out with Michael Jackson as a child and strongly defends him as well.
“As a mother, you kind of put two and two together,” remembers Denise McLean, A. J. McLean’s mother. “Yet there was always that fine line where you sat back and went, ‘O.K., is this a guy who always wanted to be a father or an uncle? Is this all innocent? Or is it more?’ I kind of thought that there might have been some strange things going on. But you just didn’t know.”
Ashley Parker Angel discusses an occurrence where Lou called him to his room to “talk about his performance”. Against the advice of others, Ashley went. Lou would tell him things like “You’re the next Justin Timberlake, or the next Nick Carter….. But you’ve got to stay in shape.” Then he’d take it a step further, “I minored in Physical Therapy in college, I can give your muscles a pump without you even working out. Let me rub your muscles.” And then it became a strange massage, and Ashley started to realize what was going on. Suddenly the phone rang and Ashley got the hell out of there. He says that’s the most that’s ever occurred between him and Lou.
Tim Christofore, who joined Pearlman’s third boy band, Take 5, at the age of 13, remembers a sleepover when he and another boy were dozing and Lou appeared at the foot of their bed, wearing only a towel. Lou performed a swan dive onto the bed and began 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 called Lou to say they were coming to his home to play pool. When they arrived, Lou opened the door naked, explaining he was just getting out of the shower. Christofore also recalls being shown footage of the Innosense girls sunbathing topless, and an incident where the guys were all watching Star Wars and Lou suddenly switched it to a porno. At the time, Christofore says, “We just thought it was funny. We were kids. We were like, ‘Great!’”
Tim’s mother, Steffanie, says “No one ever complained. 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.”
Later, one of the mothers of two of the boys in Take 5 found out that Lou took one of her sons to a strip club.
“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.”
This kind of behavior is a perfect example of grooming, by the way. He’s constantly trying to be one of the kids and make them comfortable around him, while simultaneously being the cool adult who lets them watch porn and go to strip clubs. He confuses these kids by behaving like a peer, while gradually teaching the boys to become comfortable becoming aroused around him. It’s a process.
Among the few who will discuss Pearlman’s behavior in detail is one of his former assistants, Steve Mooney. In 1998, Mooney was a handsome 20-year-old with flowing blond hair. He was trying to get started as a singer when he was approached at a mall, where he was working at an Abercrombie & Fitch store. He was invited to audition for Pearlman in his Sand Lake Road offices, but instead of a singing job, Pearlman offered him a job as his personal assistant, explaining that JC Chasez of ‘NSync had gotten his start this way. (I don’t think that’s true). Mooney took the job, and Pearlman invited him to live in his home. The whole time, Lou implied 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.”
Right off the bat, 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 closed, 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.” (Vanity Fair)
“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.’
“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, Pearlman kept putting his hand on Mooney’s 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 money and fame, it’s like Lou’s got this mind control over people.”
Mooney remembers having a conversion with a singer in a second-tier Pearlman band. “I said, ‘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.’”
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. 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. That’s just the way it was.”
According to Mooney, matters came to a head in 2000 during the final stages of the O-Town selection process. Pearlman was discussing the selection process with Phoenix Stone when he decided to call up Mooney, telling him 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, thinking that was the end of that. But after he left, Lou called Mooney again. He insisted that Mooney come to his mansion at 2 a.m. When he arrived, he found Lou in his office, wearing a white terry-cloth bathrobe. A long argument ensued and Mooney finally demanded “What do I have to do to get in this band?” Pearlman smiled.
“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.’”
It’s important to note that other than these short statements from the LFO guys and Jane Carter, nobody’s directly coming forward and accusing Lou of abuse. It’s a sensitive topic among the former members of the 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.
“None of these kids will ever admit anything happened,” said one attorney who has sued Pearlman. “They’re all too ashamed, and if the truth came out it would ruin their careers.”
Lou expanded TransContinental into numerous other businesses, many of which expanded beyond music. He bought Chippendales, TCBY Yogurt, etc. and grew TransContinental into a global entity. He purchased an internet based talent agency, OptionsTalent, which was already under investigation for fraudulent activity when he bought it.
The company was believed to be scamming people, as they were approaching people in shopping malls and stuff telling them that they could be models, and they would set them up with a photographer, and the person would spend all the money on the pictures and then nothing would ever come from it. So a lot of consumer complaints were made and an investigation began. The FBI was constantly interrupting business meetings to interview Lou.
Somewhere along the line, a new Attorney General, Charlie Crist, came into the picture. Lou was a supporter of Crist’ campaign so Crist was the beneficiary of some of Lou’s contributions, either in cash or services.
Suddenly the investigation was dropped. Charlie Crist went on to become a US Congressman.
Meanwhile, all these people were investing money into TransContinental Airlines and seeing none of the money they were promised. They tried to contact Pearlman, but he was completely unreachable.
There were multiple investors who owned only tiny lots of Trans Con Air stock. Lou told people that the majority of the stock was controlled by a guy named Theodor Wüllenkemper. Only one person, Julian Benscher, was able to buy a significant stake in the company, about 7 percent. In the late 90’s Benscher complained that he wasn’t receiving dividends on his Trans Con stock, and Lou blamed Wüllenkemper, saying the German magnate was refusing to pay out. Benscher flew to Germany in November 1998 to get answers from Wüllenkemper.
As Benscher remembers their meeting, “Wüllenkemper said, ‘What are you talking about?’ I said, ‘Trans Continental Airlines.’ He said, ‘What’s Trans Continental Airlines got to do with me?’ I said, ‘You own it. You own 82 percent of it.’ He starts laughing.
[I said], ‘Trans Con Air? Forty-nine airplanes?’ He said, ‘I have planes, but not this Trans Con Air. Julian, this has nothing to do with me.’ I went cold inside. Everything I had believed for eight years was a lie. I didn’t know what to do.”
There was no Trans Continental Airlines.
Stunned, Benscher investigated how many airplanes Pearlman actually owned. He found precisely three, and all appeared to belong not to Trans Con but to a small charter service Lou had formed in 1998. “Trans Con Airlines existed only on paper,” Benscher explains. “But it was always so believable. There was always a plane or helicopter there whenever he wanted. When we flew to L.A. on MGM Grand Air, Lou said the jet was one of his. When he said he owned the plane, well, how could you tell he didn’t?” Benscher struck a settlement agreement with Pearlman in which he promised not to publicly disparage him, and he has never revealed his discovery to a soul until now.
Lou also had a photo of a massive “Trans Continental Airlines” 747 landing at what appears to be New York’s La Guardia Airport on the Trans Con Air brochures he had been showing investors for years.
“Look closer,” Gross says, eyeing the photos. “You notice you can’t see the entire airplane. You can’t see the tail numbers. You know why? Because that’s where Lou was holding his fingers!”
“It’s a model!” he guffaws. “It’s one I built for him. Louie was using those fake pictures all the way back in the late 70s to try and raise money. Can you believe it? People thought it was all real!”
He literally took a model airplane to the airport and held it in the air and took photos of it and fooled people into thinking it was a real plane taking off.
So basically since the 80’s, Lou Pearlman was taking peoples’ money under the guise of investing it into businesses that didn’t really exist. Then he took that money and used it to create the Backstreet Boys and NSYNC, and then he used them to tell people “Look what I can do with your money, give me more” and people would invest in the boy bands, believing they actually owned stock in these bands, like he would tell people “now you own part of the Backstreet Boys”. Essentially, he used the boy bands to continue scamming people. So then he uses his new money to pay back old investors, but as people start asking for their money back, he can’t catch up.
With the bank fraud and the investor frauds, the debt was around half a billion dollars. Almost all of the victims lost all of their investment funds.
A financial writer named Helen Huntley began receiving letter after letter asking about Lou Pearlman and TransContinental Airlines. They sent her their paperwork and she could tell right away that there was something fishy happening.
A lawyer sued Lou Pearlman and the judge ordered him to pay $16.5 million. He arranged a bank transfer from an account in Munich, Germany and it never arrived. With everything crumbling around him, Lou fled. He disappeared and nobody could find him.
Until Helen Huntley received an email saying that someone spotted him in Bali. They didn’t know where to look so they just went and got breakfast at a restaurant and coincidentally, Lou was there eating his breakfast too. Pearlman pleaded guilty to one conspiracy to his investment-fraud scheme and to commit mail-fraud and wire-fraud, and a second conspiracy related to his bank-fraud scheme. He also pleaded guilty to money laundering and to committing bankruptcy fraud while on the run.
In 2008, he was sentenced to the maximum of 25 years, which was one of the longest in a fraud case. Lou had all these ideas to come up with money in jail, if they would just give him access to phones and the internet, he could start a new band and pay all the money back. Of course, that didn’t happen.
In 2010, just two years into his sentence, Lou Pearlman had a stroke and died behind bars.
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