Backstreet Boys and ‘N Sync creator was a Ponzi scammer

Most of us know Backstreet Boys and ‘N Sync but very few probably know that the man behind those boy bands is a convicted scammer.

Last week, Lou Pearlman, the creator of popular boy groups Backstreet Boys and ‘N Sync was sentenced to 25 years in prison for running a scam that swindled investors more than $300 million since the 1980s.

The LA Times reported that Pearlman defrauded investors by selling “stocks” in two companies that largely didn’t have assets and continued doing so even after one of the companies lost incorporation.

He also duped several people into investing into an employee investment savings program which promised high yields, but operated like a typical Ponzi scheme.

From Wikipedia:

For more than 20 years Pearlman managed to entice individuals and banks to invest millions of dollars in Transcontinental Airlines Travel Services Inc and Transcontinental Airlines Inc. (which existed only on paper) by winning investors’ confidence with fake financial statements created by a fictitious accounting firm.

In February of 2007, Florida regulators announced that Pearlman’s Trans Continental Savings Program was indeed a massive fraud and the state took possession of the company. Most of the at least $95 million which was collected from investors, was gone.

Now, investors are singing only one song with regard to their money: Bye, Bye, Bye…

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