He was known as the sixth member of NSYNC, but the reality behind Lou Pearlman was far more sinister than the American pop group ever imagined.
A new Netflix documentary, Dirty Pop: The Boyband Scam, has uncovered the dirty truth behind the American music mogul who founded some of the biggest pop acts in the ’90s, including the Backstreet Boys.
But while the talent manager was busy distracting the masses with a stream of noughties hits, he was running one of the longest running Ponzi schemes in American history, convincing banks, and individuals to invest into his bogus company.
Pearlman made millions from young musicians lacking knowledge about the inner workings of the music industry, allowing him to pay the Backstreet Boys just $35 (£27) per day while selling 70,000 records in their heyday.
Now, the tell-all docuseries recounts the fraudster’s journey to dizzying heights, and his fall from grace that saw him sentenced to 25 years in prison for conspiracy, money laundering, and false bankruptcy proceedings.
The murky past of American talent manager Lou Pearlman (pictured in 2005) is the topic of Netflix’s latest docu-series, Dirty Pop: The Boyband Scam
Before entering the world of music, Pearlman first ran a plane hire business, according to the Guardian.
But when chartered a plane for boy band New Kids on the Block in the mid ’80s, he saw how much cash was in the industry and decided to change his career.
He moved from New York to Orlando and advertised himself as ‘Big Poppa’. Hungry for cultural and financial capital, Pearlman launched a hunt for his own baby-faced protégés and held self-funded open auditions.
He started his record label – Trans Continental Records – to imitate the business model of New Kids of the Block, hoping to find similar levels of success with different heartthrobs.
In 1992, Lou put an ad in the Orlando Sentinel to source male singers to make up his first ever band, according to Vanity Fair.
One year later, he found all five male singers to form Backstreet Boys, with his wife Donna and the former New Kids on the Block manager allocated the task of managing them.
From the get-go, Pearlman spoiled the boys as if they were already the world’s biggest stars, splashing out on private jets and other luxury modes of transport when touring around shopping malls.
The group, formed by Nick Carter, Howie Dorough, AJ McLean, and cousins Brian Littrell and Kevin Richardson, became of the best-selling boy bands of all time, hitting gold, platinum, and diamond in almost 50 countries.
Pearlman helped NSYNC find global fame (pictured: Lou Pearlman poses with N’Sync Chris Kirkpatrick, JC Chasez, Lance Bass, Joey Fatone and Justin Timberlake seen at N.Y.P.D. pizza in Miami, 1996)
From Backstreet Boys to NSYNC and O-Town, Pearlman helped form some of the biggest boy bands of the ’90s (pictured: Lou Pearlman poses with boy band O-Town, Jacob Underwood, Ashley Parker Angel, Erik Estrada, Trevor Penick and Dan Miller in New York, 2001)
When he later crossed paths with NSYNC, a pop group previously formed by Chris Kirkpatrick, he took on the group as their manager.
Like Backstreet Boys, NSYNC also catapulted to fame, selling millions of records worldwide.
His successes cemented his position as a music mogul, not to mention the various other bands he managed, including O-Town, Take 5, and Natural.
But behind the scenes, Pearlman was deceiving investors into handing over their life savings.
Travelling backstage after shows and witnessing first-hand the legion of fans the bands garnered, investors were keen to get a piece of the pie.
For 20 years, Pearlman encouraged investors to put money in Trans Continental Airlines and Trans Continental Airlines Inc, which he claimed included the record label and music studio.
However, both companies only existed on paper, with Pearlman developing a fake German bank and fake Florida accounting firm to make his fictitious companies appear legitimate, according to Crime Museum.
To the outside world, Pearlman was a music mogul capable of turning regular boys into global sensations (Lou is pictured with singer Aaron Carter in 2005)
The talent manager treated the Backstreet Boys and NSYNC with star treatment, including private jets, from the get-go
The new Netflix docuseries interviews band members to uncover the truth about Lou Pearlman
Things started to take a turn when members of the Backstreet Boys felt Pearlman was enjoying the fruits of their labour at an unfair rate.
They made hit tracks, sold out stadiums, and built up a global fan base, but in return, they were left with an unimpressive sum while Pearlman banked millions.
Lance Bass said the first red flag into the music mogul’s shady management was after he flew them to Los Angeles and handed them checks for just $10,000.
‘At the end of the dinner we had all these envelopes sitting in front of us and I knew my life was about to change…then I opened the check and it’s $10,000,’ he revealed in an ABC television interview.
‘I knew we had worked so hard, so I knew what that check should be, or what I was hoping it would be.
‘I mean in the best of worlds a million dollars would have been like – Oh my god. That’s what we deserved,’ Bass added on his work with his bandmates Chris Kirkpatrick, JC Chasez, Joey Fatone and Justin Timberlake.
‘Then, I went back to the hotel room and that’s when it all just hit me. I was so disappointed, and I ripped up the check. I did. I knew something was wrong,’ Bass recalled.
‘I was in the biggest band in the world, but I can’t even afford my apartment,’ Bass said in the 20/20 interview.
In 2007, the talent manager was arrested with charges including money laundering (pictured: Pearlman arriving at a Florida courthouse to appear in court to answer to three counts of bank fraud and one count each of mail and wire fraud involving loans worth $20 million from an Indiana bank)
Members of the group pleaded with Pearlman for their rightful earnings, but in 1998, Backstreet Boys sued, before NSYNC in 1999.
From 1993 to 1997 Pearlman and his company raked in $10million in revenue, but the band only saw $300,000.
In their contract, Pearlman was supposed to be paid as a sixth member of the band, meaning he’d earn one-sixth of the band’s income, but ended up pocketing much more.
NSYNC sued Pearlman in 1999 over illicit business practices, suing him and his record company Trans Continental for defrauding the group out of more than 50 per cent of their earnings.
As with the Backstreet Boys, he had promised the group that he’d only receive one-sixth of their profits.
The two parties reached a settlement out of court the NSYNC signed with Jive Records.
It was later revealed that the Backstreet Boys received just £7,800 ($10,000) for years of their hard work and lived off £30 ($35) a day allowances.
It marked the start of the end for Pearlman because he wasn’t just defrauding his bands.
He was the man behind one of the largest and longest running Ponzi schemes in US history where he scammed $300million through his Trans Continental companies over the course of 20 years.
In his scheme, he duped 1,700 investors out of half a billion dollars by convincing them to invest in several shell corporations that did not exist.
Those companies were Trans Continental Airlines Travel Services and Trans Continental Airlines Inc. Both existed only on paper and Pearlman did not own a single plane.
The swindle was uncovered in 2006 and Pearlman pleaded guilty to conspiracy, money laundering, making false statements.
When investigators probed the case in February 2007, they found that at least $95million that he pocketed from investors was already gone.
The con artist who hailed from Queens was sentenced to 25 years in prison in 2008. He died in federal custody in 2016 at the age of 62.
In the end, all the musical acts that worked with Pearlman ended up suing the con artist in federal court for misrepresentation and fraud.
In the new Netflix docuseries, Backstreet Boys’ AJ McLean and Howie Dorough recall their experience with Pearlman, as well as NSYNC’s Chris Kirkpatrick.
Watch Dirty Pop: The Boyband Scam on Netflix now
