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The Boy Band Con: The Lou Pearlman Story (2019)
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Lou gave us all the ability to have lives today. Who knows where I would have ended up, man, in -- in Tampa, you know? What, in jail? I hope that Lou felt bad. Because if Lou didn't feel bad, then he's a monster, and he doesn't deserve anybody's sympathies. I have a hard time saying, through and through, I think Lou Pearlman was a bad person. Um, I have a hard time saying that, for whatever reason. There's no words to express how bad he was. I wonder how he could sleep at night. If you look at him, he was a nice person. I mean, he had a lot of different faces, but... He genuinely had a heart. I just think he was blinded by greed. It's not for me to decide, man. I have such deep sadness about all of this that I don't even feel -- I don't -- It's just deep, deep, deep sadness. He had everything. Everything. So there within lies the question. Why did he do it? I just can't for the life of me figure out, when you have it all, why do you -- why do you go left when you could just keep going right? The boy-band craze, to me, was just this amazing time in history that changed everything. Ladies and gentlemen, please welcome the Backstreet Boys. One of the hottest bands out there. I think they're called 'NSYNC. Throughout pop-culture history, there's always got to be something for 12-year-old girls to, like, scream their puberty out to. You see a girl pass out in front of you, and you're supposed to just keep performing. When you're in that moment, and that light is shining in your eyes, you're on top of the world. We had overtaken U2 for the largest production in the history of touring. We have the biggest show, the biggest stage, the biggest video wall. People were selling a million records a week. Nobody had ever seen sales like this before. This was one of the biggest times in music history. And what a lot of people don't understand, the man responsible for this was Lou Pearlman. - Lou Pearlman. - Louis Jay Pearlman. Lou Pearlman. The first time I ever saw Lou Pearlman was when I was auditioning for "Making the Band" in Vegas. He comes walking out of the auditioning room, and everybody's like -- you can tell Everybody's like, "That's Lou Pearlman," like, as we walks by. And I remember he went into the bathroom. And if I remember right, I was like, "This is a chance to have, like, some airtime with Lou Pearlman." And I believe I went into the bathroom to casually be like -- yes, I admit I was stalking Lou Pearlman into the bathroom. But I was casually like, "This is a good time to use the bathroom, too. Maybe I'll get a chance to" -- This guy is the guy pioneering music on the radio right now, you know what I mean? He was the Berry Gordy of my generation. And here I am, talking to the creator, in the bathroom of all places. Always just struck me as odd. There's this dichotomy between what you think of as a successful music mogul and Lou. Didn't look like Lou. Didn't act like Lou. When I first heard of Lou Pearlman, the idea that there was this, you know, kind of fleshy, jovial, cherubic little guy who was the impresario behind Backstreet Boys and 'NSYNC was -- was very intriguing. Lou was always bragging about his business, and his airplanes, and who he would fly on his airplanes, and his blimps, and lived this very lavish life. If Lou wasn't the entrepreneur that he was, he would have been the best car salesman you've ever seen. He would have convinced you that there was features on the car that didn't even exist yet. His house was like a giant theme park. All-white house. White and baby blue everywhere. It was like Disneyland. I mean, he had, like, this boat, and WaveRunners, and, like, you know, this crazy pool, and this, like, private movie theater. And he would have you over and have these, like, boy-band parties at his house, you know. And, like, "Hell, yeah! Like, this sounds like an awesome time." He had, like, an old-fashioned Coca-Cola machine that would open up, with, like, a door, with them all like sitting there, and it was always stocked with Yoo-hoo and apple juice. That was right next to, like, the Darth Vader helmet. Like, he'd buy you an expensive watch. You just got, like, you know, a $10,000 watch. You're like, "Awesome." He also had a stretch limousine that had a driver. I mean, it's not like some service that he called. That's his guy, sitting outside, waiting for Lou to say, "I want to go here, here, here." There was a baby-blue Corniche Rolls-Royce parked in the front. He would let me drive the Corniche even though I didn't have a license yet. He would let me kind of just be a kid. I could invite friends over. I remember, Nick and I had a double birthday party at Lou's house. It was a pool party. We invited all of our friends. Like, "We're gonna go to this big mansion. It's gonna be my birthday party. It's gonna be awesome." He was that inviting to all of us. He was always laughing. He was a big kid. He made himself more relatable to us, to me, personally, by being this kind of grown-up kid. Lou was just a charming, charming guy. It's the way he spoke to you. You know, he was very good with his words. He made you feel like you were the only person in the room. He was so into what's happening in your life. He asked the questions. And so that made you feel great, like someone cared. The first day that we met Lou... Mm-hmm. I remember he came over to me, and he said, "And you teach school?" And I said, "Yes, I do." And he said, "Well," he said, "in a very short period of time, you won't have to teach anymore." There's a part of you that knows that's not true... Mm-hmm. ...in all this that he's saying. There's no assurance that any of this is gonna happen. But there's a part of you that's thinking, "Wow, that would be great." Well, not at 16. I believed 100% of it. Yeah. He would sit at, you know, the head of the table and just be laughing, and just saying, "Oh, boys, you're gonna be so big." Yeah, I mean, it was the best support you could get. He'd say, "He's great. It's gonna be great." "It's gonna be great. You're gonna be huge." Yeah, "Huge." "Gonna be huge, kid. Gonna be huge." Uh-huh. Right. "Lance, know what I wish the Easter Bunny would leave in my Easter basket? You." Who's that? A fan. I don't know. Why are you keeping all this fan stuff? I kept everything. I got boxes of stuff. If it was something real cute, I'd throw it out. My God. How many albums do you have? You want to know? Mm-hmm. Um... I have 85. 85? I never thought, though, that you'd end up doing something like this. No. What, you didn't think I was talented enough to be in a boy band? Um... Never thought about it. Did you ever think about it? No. Are you kidding me? I didn't think it would be possible to do anything in music. So, Orlando is known as the tourist capital of the world. You have all this great talent working at Disney, working at Universal. Orlando was every place and no place at the same time. It's odd that Orlando was the breeding ground, but it actually kind of makes sense. There are a lot of theme parks, there are a lot of young entertainers who go down there to be Aladdin or whatever. It's like Hollywood, but you can afford it. So you have this amazing cadre of artists and singers, and then here comes this guy, Lou Pearlman, auditioning and looking for a boy band. I mean, I was used to going to the Sony Club, like, on the top floor of a skyscraper on Madison Avenue in New York City. And, like, now I'm at Trans Continental Records. What is that, anyway? What does that mean? Does that mean you have offices on all the continents? Like, what does that mean? And it was, like, in Orlando. It wasn't in New York City. It wasn't in Los Angeles. It wasn't in London. It was in Orlando. Pearlman made his fortune in the aviation business. His path crossed with the music industry when he started outfitting luxury jets and leasing them to rock stars. One of the bands that chartered his airplane was... And I just questioned, how could these kids afford an airplane? And I was told, these kids did $200 million in record sales and $800 million in touring and merchandising. I was like, "I'm in the wrong business." And so Lou took all of that in, and realized that this business was an even bigger business than, you know, the airline-charter business. "I think I can do that. I think I can put a group like that together." A boy band is usually five, sometimes three. Never four, for some reason, unless somebody leaves. Usually no instruments. Sort of club tracks that would have been huge in Europe a few years before. Some involved choreography. All five members have five distinct personalities. They just had incredible charisma, you know? And a 13-year-old girl will lose her mind. We would get this thing in the mail called the Blue Sheet. Classifieds for anyone that's in the entertainment field. Open auditions for vocal-harmony doo-wop group. Louis Jay Pearlman, entrepreneur." My mom and I were like, "Well, why not?" And Lou signed me on the spot. Howie met Lou, as well, in '92. Nick auditioned. Got the part. Lou's limo driver knew somebody who knew Kevin, who was working at Disney at the time. Kevin kept talking about this cousin, Brian. Next thing you know, he shows up at our band house, and we sang a song together. Yeah, that definitely sounds -- That was the moment that we knew "This is Backstreet Boys." I'd found Justin. Justin brought in JC, so it was the three of us. And I knew Joey from Universal. Joey was trying to sing low, and then he wasn't really a true low voice. That was the first time that we actually kind of started auditioning. Justin and I pooled all our resources. I don't even know if my mom was gonna even tell me about it unless I brought it up. But I asked her about it, and she was like, "Yeah, you know, this guy Lou Pearlman called, with Justin Timberlake and his mother, and wants to start a group in Orlando." And I knew of Justin at that point because he was on "The Mickey Mouse Club." I was very excited. I was like, "Well, we have to see what this is." Right when I land in Orlando, Lou Pearlman meets me at baggage claim in Rolls-Royce, which was insane to me, because I'd never seen a Rolls-Royce in person. I felt like they were rolling out the red carpet immediately. So I arrive at the house where the guys lived. All five of us sang "The Star Spangled Banner." And I remember looking at everyone's faces after we had stopped singing, and everyone's, like, jaw was dropped, and everyone had goose bumps on them. And I remember thinking, "Oh, my gosh. I think I might have made the group." It just sounded right. And we just started high-fiving each other like, "This is the guy. Like, this is our next member." We were 'NSYNC. "Oh, man. We're in trouble," you know? I was late for a job interview once, and I called Lou in a panic, and I said, "I don't know what to do. I'm gonna be late." And he goes, "Don't worry. I'll have a helicopter come get you." So they picked me up. I get there, and they said, "So, how will you be coming to work?" And I said, "Um, I don't know." They said, "Well, how did you get here today?" I said, "Helicopter." And they're like, "Yeah, ha, ha. How did you get here today?" I said, "By helicopter." Lou loved always helping me, and doing things that he could do. Lou said, "I want to get a house for you guys, because I want you guys to be together a lot, and I want you guys to really get to know each other and not worry about -- You can quit your jobs," and all this stuff. And that, to me, I mean, was, like, you know, amazing. One of the things that we created was a boot camp. So, even though 'NSYNC and Backstreet Boys were a couple years apart, they went through the same process. We were working our asses off day in and day out. Lou had these gondola hangars for his airships. No air-conditioning in there. It was hot as balls. We would learn how to dance, we would do choreography, and we would learn how to sing on a microphone without being out of breath. Probably rehearse six to eight hours a day in there. I'm surprised none of us ever got heat stroke. You're talking Orlando, Florida, in August. When we'd play anywhere, it seemed more inviting than that warehouse did. And since then, they've torn it down. And I think I've broughten flowers to that place a few times, and wished it well on its death. But, boy, I'll tell you, they were troopers. They wanted it. They wanted it bad. I think that was the beginning of us really bonding. We were inseparable. We definitely started feeling like a family. As repetitive and as annoying as it gets, it was fun. You know, I'm with four guys that are like my brothers, and doing music, so... You are getting sleepy. Ah, look who decided to show up. This is my friend Louie. He took me to a really cool concert the other day. In the beginning, he was there a lot. They all were kind of, like, without dads, so Lou kind of filled that void. Kevin lost his father to cancer. So when we first formed the group, Kevin really looked up to Lou as a father figure. We called him Big Papa. You would go into the office at Trans Con, and Lou would be like, "Come in! What do you need? What do you need?" Whatever we needed. Whatever we wanted. There was a calming about him that you never had to worry about anything. Here I am working three jobs so I can pay rent, and when you're around Lou, it was just like you didn't have to worry about money. You didn't have to worry about anything. Lou was head of our family. We would have dinners. We would tell him everything. It was Lou's. I stole it from him. - Good for you. Lou loved food. We'd go to New York, and it'd be Peter Luger. You know, "Oh, you can't get into Peter Luger, but I know people, and I can get you in." Los Angeles, you'd always go to Lawry's. So food was a big part of his life, and it was the way that he, I don't know, brought the family together. He wanted to show you what life could be. "If you work it right, you can have all what I have." Like, he was he walking poster child of what success could be. It's just like Peter Pan and the Lost Boys, you know what I mean? It was just, like, this awesome thing to be a part of. I think it's because, you know, he didn't have a lot of family. And so he looked at all the bands, he put all of his love into us. But Lou so desperately wanted to belong to those groups, and he wanted your friendship. He just really wanted to be loved, I really think. I can't believe that I would feel sorry for a multimillionaire, but I did. As Backstreet Boys, we signed with Jive, and Lou and Donna and Johnny were our management team. You know, Lou was generous. I mean, I just remember a time when we had an opportunity to do a TV show in Tampa. We were recording in L.A., but we had to get there by a certain time, and all the regular airlines were shut down. We couldn't make a plane. Lou found a medical-evac plane, and he got in it with the pilot and flew to L.A., picked the guys up to get back to make that show. But because the plane was too small, they had to make stops. So by the time they actually got to Tampa, they missed the taping by an hour. But that's how dedicated Lou was to trying to make sure that these guys got to a place where an audience could see them to help take them to the next level. I think Lou's passion at that point, at the beginning, was so endearing, and his drive. Mr. Lou Pearlman, the man who started it all. Where do we go from here? - Onward and upward. The way that he handled business is the way that he handled us in the beginning. Like, gave us that extra push. Lou was an unusual promoter in that he was willing to put up his own money. They were spending millions -- Lou's millions. His work ethic was something that I know I took away from him. We would go door-to-door to every single solitary radio station and do every interview, we would sing a capella on the radio stations. When we released our first U.S. album, things started to pick up, and in doing so, it wouldn't go away. Fans were calling. Fans wanted to see the video. And in turn, MTV created what we all remember as "TRL." The boy bands made people watch MTV all day long. They made them call "TRL." The boy-band thing made girls just stand in the middle of a busy street in New York City and just yell at a window. This is insane. And, like, maybe there was somebody on the other side of that window, maybe there wasn't. Maybe it was the guy mopping the floor. But they would just go and scream because Nick Carter had been there. They were hot. Their records were top 10, top 20 at that point. Singles all over the charts. You know, they were selling out shows all over the place. The success of the Backstreet Boys, as 'NSYNC, we always felt like the red-headed stepchild. We couldn't even go into the record label because the employees there didn't know we existed. And Lou did not want them to know about us just yet, because he didn't want to upset the Boys, the Backstreet Boys. So, in all the accounting that you watch at Trans Continental, everything that they spent on us was under "B-5," is what they called us. Um, it was -- yeah. It was just -- It was weird. They were struggling. Their album was down at 66, and people really thought that it wasn't gonna gain any more momentum. We were just trying to do everything we could to do what we could do best. And, honestly, it was slow. 'NSYNC comes out. Their outfits are ridiculous. I mean, ridiculous. And they had on these, like, overalls, these jean-looking outfits. They sort of matched. I was like, "Who are these clowns?" You know? And then they started to perform. 'NSYNC blew me away. Backstreet Boys' harmonies were the thing that they focused on the most. Also, Backstreet Boys' image was a little bit more darker, with blacks and darker clothing, whereas 'NSYNC were the guys next door. They wore basketball jerseys and shorts and Jordan shoes and stuff like that. 'NSYNC had great harmonies, also, but they were really focused on the performance in the shows. I'll never forget, it was this Disney show, this Disney performance, and we were burnt out. And we were just like, "We don't want to do it." And the minute we said no, 'NSYNC said yes. Hi, we're 'NSYNC! 'NSYNC were all too happy to take Backstreet's sloppy seconds. They showed that concert daily on the Disney Channel for months. Essentially, as soon as the Disney special aired, everything changed. The charts would come out. Were like, "Oh, there we go. There we go. There we go. Oh, it's happening now." And that's when the snowball kind of started rolling. We had gone from selling 5,000 units a week to 50,000 to 60,000 in the first week. Fortunately. I remember the days when we had small crowds, but now they're getting bigger and bigger. And I guess that means that we're doing something right. The guys are just fantastic. Try telling the Backstreet Boys, who've been working for years to become successful, and they turn down one Disney special and now their competition is breathing over their neck. And their competition is managed by their manager. Backstreet Boys were not happy with 'NSYNC, and they weren't happy with him because he would put another band together to compete with them. It was the biggest conflict of interest. Like, it was the biggest, literally, "don't shit where you eat" scenario. And it really started to bother us. What Lou told us worked like a charm. You know, he pitted us against each other, and we stayed against each other our whole entire careers. If I saw them in a room, I wouldn't even want to talk to them. I was scared of them. I didn't know if they were gonna yell at me or not. Lou would come to us and be like, "Oh, can you be believe the Backstreet Boys? Can you believe what they're doing now? This is ridiculous. Whatever." And then he'd go to them and be like, "Oh, can you believe what the 'NSYNC boys are doing? They're not listening to me at all. They're doing this, they're doing this. You guys are so much better." I mean, if I were the Backstreet Boys, I would have hated us, too, you know? This is my assumption of what I'm assuming what went on in that head of his, but a light switch must have went off and said, "Okay, this works. I'm gonna keep doing this. Why not? Why not build an empire of groups?" One of the most memorable things that Lou said to me was explaining the origins of 'NSYNC. And the way he framed it to me was, "Well, where there's Coke, there's Pepsi, and somebody's gonna come along and do the Backstreet Boys knock-off, so why shouldn't it be us?" That chair move, it looks like you stole that from the Backstreet Boys. Wrong! No, they took it overboard, and we... That's right. I'm sorry. We didn't take it from them. There became this, like, horse race. Both bands wanted to outdo each other. The girls felt like they had to pick a side. Like, the girls in Times Square were either all about Backstreet or they were all about 'NSYNC, and you could not like both. It was "cha-ching!" I mean, the amount of money that was being made, you can't even imagine because we don't sell records like that today. You know, most people today, they buy one or two records in a year. Back during the teen-pop period, they were buying five a week. We were making $35 a day, which was our per diem. And I remember thinking that was such a lot of money, because this was all free. Everything -- my life was free. "Everywhere you'll ever stay is free, and we're gonna give you a per diem on top of that." I'm thinking I'm king of the castle at this point. No one worked harder than 'NSYNC and Backstreet Boys. No one. These guys didn't get a day off. Never. And if they got a day off, I got them for a photo shoot. We'd been touring for almost two years. Number-one albums. Countless, countless radio promotions. Things were going great for us. This is as good as it gets right here. I remember this one trip to Los Angeles I was so excited about, because Lou was hyping up the fact that this was gonna be our first check presentation. And at this point, we've worked so hard and we've got zero. It's all kind of accumulated, and they're just gonna give it all to us in one batch in a check. And he takes us to Lawry's. Very lavish dinner. You know, Lou loved those big family dinners. We had all our family there. He had all the parents to come. At this time, they had sold over 10 million records. I was just kind of doing the math in my head. But I kept thinking, "If it's just $1 million, divide it up by five, and Lance is gonna get $200,000." You start thinking in your head, like, "What could it be? Is it six figures? Is it $1 million? Like, what am I about to fall into right now? My life is about to change." And I'm thinking to myself, "Oh, this is gonna get crazy. A lot of money now? This is gonna be nuts." Yeah, I was on cloud nine. I was on top of the world at that point. I mean, we thought that was as big as we could possibly get. I open up the envelope, see the check, and, oh, my gosh. Like, my heart sunk, and I-I could believe the number I was looking at. The reaction from everybody when they saw their checks was just astonishment. The check was $10,000. And not to sound ungrateful, 'cause $10,000 is a lot of money, but when you compare it to how many hours that we had put into this group for years, it didn't even touch minimum wage at all. We started selling out stadiums, started selling out arenas, started doing all this stuff. And we started looking at our bank accounts, and it's just like, "Something isn't adding up. Lou's getting paid. The promoters are getting paid." Some of the guys couldn't pay for their car payment, or couldn't pay for their apartment. Basically, we thought it was, like, a normal thing, you know, to get food money. And then we thought, essentially at the end of the road, there would be some magical, big check. When you're working 18 hours a day, you know, just to get to sleep at night, you don't have time to look over contracts and make sense of things. It was so insulting, I felt like someone had punched me in the face. I knew at that moment -- it was the first time that I thought to myself, "Oh, my gosh. Something's wrong. Like, there's something wrong with Lou. He's lying to us." And, you know, went back to the hotel, and I immediately ripped up the check. I was like, "This is not right." How successful does a group have to be in order to make money? We didn't know where it was going. We were like, "Who is making this?" My uncle's a lawyer. At the time, I didn't have money to hire a lawyer. So, okay. I call up family. Started out, like, with this, you know, small little, "Okay, this is bad. This -- this is really bad." The deeper they dug, the worse it got, and it was just this webs upon webs of robbery. He said, "This is one of the worst contracts I've ever seen in music history, and y'all need to try to get out of this." Lou made himself the 1/6 member of Backstreet Boys. So anything we made, Lou made exactly. He was the sixth member of 'NSYNC, and he was proud of that fact, because it was going to help us. Because we wouldn't have to pay a manager. We wouldn't have to pay the record label. You know, his would come out of the sixth member. I mean, he really sold us a whole amount of goods of "The sixth member is the way to go." Lou was making it seem like we were in so much debt that it would be a long time before we saw some real money. And what's when we learned the world "recoupable." That's a word that's never been in our vocabulary until this moment. And the lawyers were explaining to us, "Well, the reason you're in debt is because they spend this money on your record pressing. Then you had this concert. The rent for the house. Oh, all those dinners, those lavish dinners that Lou was taking you to that you were thanking him for, that's your dinners. You were paying for it." And I said, "Lance, this guy is really ripping you off. He's stealing from you. He's stealing from Backstreet. You've got to do something about this." We decided to have a basketball game for charity. There was a little after party that took place at the hotel. Nick Carter, Brian, Justin Timberlake, and JC wanted to go to McDonald's to eat. And on the way to McDonald's, I kept hearing, "Lou!" And "Lou said this" and "Lou said that." The next day, I get on a bus with the Backstreet Boys, and Brian gets on the bus, and he goes, "Guess what, everybody? Lou's been lying to us." And Brian was livid over this. He basically said, "Guys, this is what's up. I want to file a lawsuit." With 'NSYNC, we needed to figure out how to either fix it so it's a more fair deal or get rid of Lou altogether. I felt so insufficient that I let somebody take advantage of my son. But yet I was so angry with him when I found out what he did, that he would -- that he could do that. Of course, every parent is protective of their child, and I -- I just wanted to kill him. Like everybody else, I just wanted to kill him. So, you have this guy who is a family member to you. I mean, he is Papa Lou. Someone I told so many things to. When, all of a sudden, that is ripped away from you, and you see the true face of someone, and they've been duping you this whole time, it scars you. It scars you for life. "Why would you do this to us," you know? "You -- You broke our hearts. You know, You -- you stole from us. You took advantage of us." It was this person that I had all this complete trust in. Suddenly the carpet just got ripped out from underneath us. So, he felt entitled. I mean, this whole time, Lou really thought he was just entitled to all of this. If it was his idea to do this, and he introduced you to this person to get you that record deal, then, yeah, he was entitled to 90% of your business, because if it wasn't for him, you would be nothing. So do you want 10% or nothing? It went from jolly Lou to, like, "I don't give a fuck about you right now." And it was just, like, no smile the rest of the time I ever saw him. It was just really frightening to me, because I knew it could go one way or the other. It was either gonna be the end of the group... Mm-hmm. ...or you guys were gonna be free. Yeah. And I just hated to see it all go away, you know. So I was really scared for you guys. Yeah. And we really thought that it was gonna be the end of the group. Oh, yeah. Because not only was Lou Pearlman saying it was gonna be the end of the group, but we had management telling us that, we had the record label telling us that. Everyone around us was saying, "Mnh-mnh. Lou's -- Lou's gonna win." Like, "Y'all have nothing." And even, I remember, we sat down, I think it was in New York, at that table, our first mediation, Lou on one side, we're on the other, and we had Strauss Zelnick right in the middle -- you know, our boss. And he just looked at us and said, "You might have one more album in you. I'm siding with Lou." And, I mean, my heart was broken. And I remember leaving then, and we were deciding, "Well, do we just go ahead with the contract and just take it? Or do we leave?" That's what was going through my head. I'm like, "Our career's over." I always felt like he was just kind of mealy-mouthed. Mm-hmm. You know, all those years, I felt like he was. But that side of him, the coldness that I saw... Mm-hmm. ...that optimism that we had seen, I mean, there was nothing jolly going on there. He was just a different person. Yeah. So that was a shock to me. I don't know. I mean, Lou was always so positive, you know? We believed everything he said. He was fun to be around. But then, on this other side, you didn't know who he was. I mean, who was Lou Pearlman? We didn't know. I have very fond memories of growing up in Queens at Mitchell Gardens. Just walking down the street, everybody said hello to each other. Everybody knew each other. It was a good place to grow up. The schools were pretty good. For American schools. Mitchell Gardens produced some great people. A lot of professionals, a lot of people in public service. Louie didn't represent us. He was different. And he didn't fit into any of our crowds. He didn't play ball. He wasn't political. He wasn't a hippie. He got picked on a lot. He wore a pencil protector and polyester pants up to here. And I think he probably, for the most part, only had one friend. The only person that would be his friend, Alan Gross. Oh. I was an only child, and Louis was an only child. So we kind of gravitated toward each other. But also we had a lot of common interests. We liked music, we liked entertainment, we liked blimps and aviation. So, when I was much younger, I was sitting on the right side of the bus, by the window, and as we're approaching New York City, I looked up and I saw this big, silver, floating blimp in the sky, and I just couldn't take my eyes off of it, and it kind of made my heart race. You ask me if I want to go up in an airship, I'll never say no. I always included Lou with my airship activities. We were just solidly enamored by the Goodyear blimps, and having them stay for two whole summers out at -- in our backyard at Flushing Airport. I always wanted a sibling. Having Lou in my life was like having a younger brother. We played games, and we'd go out. He definitely was shy. Lou's parents were very doting. Lou's mom, Reenie, put him on a pedestal. Lou being a dreamer that he was, he did spend a lot of time by himself in his room, drawing up business plans, and thinking about how he can make money. You always felt like he was more grown up than the rest of us from an entrepreneurial point of view, that he was someone who was gonna figure out how to make a lot of money. And that was important to him. Lou always talked about himself as this, like, child prodigy of business, you know. And he would always tell this story as an example of his, like, entrepreneurial genius at a young age. That he had this paper route, that started with this kid, David, who he went to work for. I had a great paper route. It was the New York Post. Probably 100 papers a day. And if you were lucky, you got some tips, so maybe you made $15 a week. The story continues on that David wants to get out of the paper route. And so he offers to sell to Lou for $500. So that's a lot of money for little Lou Pearlman to come up with. Brilliant Lou Pearlman decides that, instead of buying just one paper route, he's gonna get multiple paper routes. From there, he hires a whole team of newspaper-delivery boys to set out delivering all these papers for him. He decides to take it another step and create this fully customized experience for each one of the customers. Finds out exactly how do they want the newspaper delivered -- in the door, do they want it under the door, do they want it under the mat? And he starts making these index cards, cataloguing exactly how each customer wants the newspaper delivered. He then decides to do something that's never been done before -- to do a deal with Dunkin' Donuts so that customers can have their Sunday brunch delivered along with the Sunday paper. So now he's got this full-scale business of all these newsies in this conglomerate newspaper-delivery service. Not only was he able to pay back the initial $500, with interest, but he also made this huge profit. It's total bullshit. I didn't sell him the paper route. He had nothing to do with the paper route. We didn't have the ability to just sell paper routes. I don't know. I mean, I think -- Louie lied to himself a lot, and I think he started to believe his own lies. My dad would say, "God, that guy!" He goes, "I asked him a question, and he never answered it." He dodged questions by making you think that he answered it, and talking about so many things that were, like, on the subject but off the subject, and diverting everything to something else. He bragged a lot, and you never knew what was fact or what was fiction. One of the things he said was that he was a cousin of Garfunkel from Simon & Garfunkel. But he used to say that, and, you know, we didn't really believe him. When Lou had turned 13, and he was telling people that they should come to his bar mitzvah because his cousin, Art Garfunkel, would be there -- at this point, Simon & Garfunkel is one of the biggest musical acts in the country. There are times when I'm singing one of Paul's songs that I feel the song is really very personal, and probably shouldn't be sung by anyone other than the writer. But because of Lou's penchant for fibbing, a lot of kids didn't believe him. But they decided to show up. And sure enough, halfway through the bar mitzvah, all of a sudden, Art Garfunkel appeared. And I think that is an extremely important moment in Lou's life, not only because it was a brush with fame, but perhaps even more significantly, I think it was Artie's amazing harmony voice -- that's what he was looking for in that hangar in Orlando. I had heard that people saw him, that he had come to the neighborhood, that kind of thing. So, you know, I absolutely believe that one fact was true. Art Garfunkel was Lou Pearlman's in. He always would take a little nugget of something to make everything seem legit. It brought him attention, and made him feel like people might want to know him. When I met Lou, he did not have a group of friends. He had Alan. He even told me one time, which I found so sad, that, when he was little, or growing up, he was the fat kid in school, you know, with the glasses, the nerdy kid, and he felt that nobody liked him. He said to me, "One day, I'm gonna be rich. And when I'm rich, people will like me." Louie was a busy guy. He always had something going. You didn't know what he was gonna wind up doing, but you knew he was gonna do something. I don't think any of us thought Louie was gonna become this big entrepreneur, a boy-band executive. I thought he'd take over his father's dry-cleaning business. Nobody else in the neighborhood was as into blimps as Lou -- and me, of course. Lou and I realized that we could be a team and work with the Goodyear blimps -- run and grab a rope and help it land, and help it park. That was really the golden age for us. Seeing a blimp, like, slowly lift off and then hover up there in the sky awakened in Lou some kind of larger-than-life dream. I think the blimp is, like, the essence of that spectacle that Lou was trying to create with his boy bands. Lou attended Queens College and studied business, and came up with a plan. He was able to see the commercial opportunities. I used to work for Goodyear, and that's what gave me some of the ideas to go ahead and get into the blimp business. I saw all the great potential. Never tire of it. It's amazing. Lou and I decided to try to start a blimp company. Lou named the company Airship Enterprises Ltd. He got in touch with a company. They used balloons in logging, and they said they're nowhere near as big as these giant blimps. And you can buy one. It's only $10,000. He approached Jordache, the jean-maker. He bought the logging blimp. Jordache was expecting a really top-of-the-line airship. He deceived the client, and he deceived everybody, including me. It was 16 or 17 years old, past its useful efficiency, and it was showing its age. So on the day that it was supposed to fly up to New York for the Jordache party on October 8th, it was gonna crash. Good evening. It was billed as the ultimate weapon in the great jeans war. A spanking-new blimp commissioned to flash the name "Jordache." It ran afoul of gusting winds. Laced across the pine trees, the ship's helium bag, painted with $50,000 worth of real gold. I think Lou's intent was to commit insurance fraud right from the get-go. Lou had had the blimp insured for $3 million. And, you know, as I said, he bought it for $10,000, maybe added some stuff to it. And it had to crash so that he could actually put in an insurance claim. I didn't understand what was going on. I felt totally betrayed by Lou, and I let him know it. I felt terrible, because I was really counting on trying to get into the airship industry in a good way, and so I kind of retreated. I think after that, Lou decided that I could no longer be trusted, that I wasn't part of his inner circle anymore. There was no reason for me to ever trust him completely again. When I left the blimp company, he didn't fight to keep me or anything like that. He actually had the attitude more of "Good riddance" than of "Goodbye." And that hurt. That hurt a lot. When the blimp crashed, Lou gets $3 million. The next phase of Lou's life begins. He moved to Orlando not long afterwards, where he secured a large blimp hangar. He bought a house. The company became Airship International Ltd. The subsequent clients that Lou got -- SeaWorld, MetLife blimp, McDonald's... The largest certified airship in the world for day-and-night advertising. Three of the biggest brands in America were doing business with Lou, and recognized Lou's original, genius idea. The fact that Lou was the first to get McDonald's and MetLife to advertise on blimps is actually a pretty significant thing in terms of marketing. Now, like, a very everyday kind of experience, but in those days, it was not. After Lou was involved with the airship and Airship Enterprises, he got involved with this airline that he was very excited about called Trans Continental Airlines. He just was so happy to have this new venture that he was going into with these airplanes. You know, he loved airplanes so much. He had models of them everywhere. And this was like his baby, and he went off full steam ahead. While all these other things were going on, Lou was also selling these stock options and retirement accounts in Trans Continental Airlines. I first found out about the investments from a friend of mine. He said, "If you got some money to invest, I've got a program ran by a gentleman through Trans Con called Lou Pearlman." When I first met Lou, he was very jovial, easy to talk to. Very impressed by everything I see. Letters of accommodation, appreciation, and, of course, the key of the city. And he says, "I'm gonna show you why your money's safe." So he pulls out the FDIC documents. He pulls out AIG. He pulls out Lloyd's of London reinsurance. But the way his company's booming, I'm pretty sure it's gonna be going up. This is a picture of my husband, Andy Macik. World War II veteran. Was a prisoner of war in Germany for nine months. He's my hero. My friend Luther and his wife also invested with Lou. And they're the ones that told us about it, and told us what a good deal it was. My parents didn't spend an extra penny on anything. They were excellent cooks. They would rather cook at home. And here they were retired, not spending a penny. They never went on vacation. And if they went on vacation, it was to see my sister somewhere. Never thought my father had this much money, ever. And he wanted to leave something to us. And then we were introduced to this opportunity, and it looked good. Passive, ridiculous returns on the money. "Eisa from Trans Continental to TCM." It was a special account that TCA had, Trans Continental Airlines had. And he goes on to explain, well, you know, he essentially was a producer of the boy bands 'NSYNC, Backstreet Boys, and so on. So that caught my attention. I was impressed. He's sitting behind the desk, and he's on the phone talking to, you know, Berry Gordy or whoever in the music business when you come in, and then he says, "Oh, I got to let you go. I got an important person here," and he puts the phone down, and now all of his attention's on you. And "This could all be yours." We were in New York, flying out, and he said, "Oh, we're gonna fly one of my planes that I'm thinking of buying." Lou gets on the mike, "Everybody put your tray tables and seats down! Nobody cares!" One of the best bits of advice that we've ever been given in our entire career was from the original Temptations. And after our performance, one of them said to us, you know, "Don't ever forget that this is show business. Always remember that while you're doing your show, your business could be walking out the back door." I know, in the industry, and so do a lot of people who I speak to in the industry tell me, that they're more than fair, these contracts. My name is Cheney Mason, and I'm a lawyer. High-profile cases. Representing a man named Harlan Blackburn, reputed to be one of the Mafia bosses of Florida. And then, of course, representing Casey Anthony. That case will live in infamy forever. And the one you came here for, representing various aspects of Lou Pearlman and Trans Continental Enterprises. With Backstreet Boys, Brian was livid over this, and he basically said, "Guys, this is what's up. I want to file a lawsuit." As 'NSYNC, looking through our contracts with the lawyers, they found one little out. If Trans Con didn't sign us to an American label within a certain amount of time, then the contract was void. And they signed us to a German label, not an American label, and that was our little nugget of hope of being able to leave our deal. When we told them that, that's when Lou sued us. We needed to figure out how to either fix it or get rid of Lou altogether. And it was just, like, no smile the rest of the time I ever saw him. The hate started at the end, when the boys wanted to renegotiate contracts, and they wanted more money. Then the lawsuits came in. And it was the craziest thing you will ever imagine. He sued us for our name. He said he was 'NSYNC, because he owned the name. And it was $150-million lawsuit, I believe. And again, remember, we'd only gotten paid $10,000. We might lose our label deal. Who knows? Like, this could be the end of it. It was, like, really starting to twist your gut. Like, "This really isn't fair." We didn't want this to be over for them, because they had just worked too hard to lose it all. Man Fans have even formed a prayer circle outside of the courthouse. Please be with them today in the court, and please make them really come out victorious. Their big dispute was, they wanted to cut him out. And at that point in time, it seemed a very unfair thing to do. You know, the bottom line is that Mr. Pearlman had invested several millions of dollars to recruit these kids, and to provide dance lessons and voice lessons and music lessons and all this other stuff to create them. He puts it in blimp terms. "If I rent a blimp for $200,000 a month for 12 months, this is what you're gonna pay me." But that's not how it works in the music business. So if the band is starting out at zero, and all of a sudden makes $1 million in six months, you can't not pay them for the work that they do. You have to change your agreement as it goes along and the band gets successful, because the power is now with them. That was probably one of the most stressful days of my life. All five of the guys are on the side of the wall over there with their little suits and ties on, and the judge is up there, and Lou's over here with all his lawyers. And we as parents are sitting there and just holding each other's hands. The kids should take a step back and say, "How'd I get here? Who took the risk? Who put up all the money? Who's my real Big Papa?" We had to break our contract with Lou. In order to do that, we went to the court and said, "We have the name 'NSYNC, and he is not a part of that name." That judge looked at us, looked at Lou, and said, "So, you, sir, are saying that you are 'NSYNC. And these five guys, who my daughter has their poster on her wall, is not 'NSYNC." She's like, "That doesn't make sense." And she sided with us. She let us out of that contract. As Backstreet Boys, it went a little differently. We went ahead and filed the lawsuit. You know, we basically put money aside that was the 1/6 for Lou, kept that in a separate escrow, and the minute we were done with everything, we cut him a check, and we were free. And Lou was no more. There was just -- we trusted him. There was so much trust we put into him. And it really sucked to see, suddenly, that business, almost evil cold come out on his face. It was the first person that stabbed me in the back, the first person that I realized I couldn't trust, the first person that I could look back and just hear the lies to my face. And then also say, "Yeah, I don't want to renegotiate. You owe me everything," and just be so mean-spirited about it. I never in a million years thought a person that I entrusted my life with, and owed my career, my life to, I mean, everything at that point in my life, could do something like this. I think, deep down in his heart, that's really what he wanted to be, was the sixth member of the group. I think that's how he really wanted to see himself. And I think he wanted those boys to see him that way, too, and if he hadn't taken advantage of them, they would have. We were in London in one of the cabs, and we were all talking about the album. We were so excited for this new album that we were gonna control, and we were writing on for the first time. And we couldn't think of a title. You know, like, "What could we...? It's got to be about what's going on in our life, you know?" And I remember, Chris was like, "Oh, I got no strings on me." You know, that Pinocchio thing. And I'm like, "No Strings Attached!" And it was just born right there in a taxicab. It was the perfect timing for us. And the whole theme of "No Strings Attached" and being away this person that was holding us back... ...it just catapulted us into, like, that next level. He would call me, and he was real hurt, and real upset. Uh, was it an act, because he loved me and didn't want me to think bad of him? I don't know. But Lou would say to me, "These boys didn't have anything when I took them under my wing. I made them who they were." Even though all this happened and Lou was hurt, he still continued -- you know, he had to. He always -- I don't even know how to describe it. Hyper, you know? His mind was always going. Back when Backstreet Boys and 'NSYNC were going strong, Lou was also creating other groups. He created Innosense, which was his first girl group. The feeling of being a girl band in the midst of all these boy bands was, we felt, like, super special. They were talking about us being, like, the next 'NSYNC and the next Backstreet Boys. He created C-Note, this Latin-based band. We were the next ones slated to hit that success that Backstreet and 'NSYNC did. So everywhere we went, we were the next big thing. And he created Take 5. It was like boy-band boot camp, basically. A big house that we all lived in. Lou definitely tried to have the family vibe always going. He was looking for the third big breakthrough. Before my experience with Lou, my mom already spent many years, you know, developing my brother. But when he turned 12 years old, we never saw him anymore. Lou was like, "Well, there's talent in Aaron." And then I sold 5 million records before I turned 10 years old with my first album with Lou. He created LFO. LFO was big, but they never -- none of those bands ever got to the success of what Backstreet Boys or 'NSYNC. And I just think, not because they weren't talented enough, just time had moved on. This is the way bubbles burst. It just seems contrived. It seems put-on. I think he was a little bit behind the times musically by that point. He needed to still seem like this mogul. And they believed in him. And he had to keep up -- not with the Joneses, 'cause he was the Joneses. People were trying to keep up with him. So I just think he got sucked into this vicious cycle of "I have to one-up what I'm doing. I have to get more money. I have to be bigger." What he needed was bigger than just C-Note. He needed a distribution deal for all his artists to get that big chunk of money to keep his thing going. And, so, because of that, we suffered from it, and he basically ruined, what, six record deals for us. The currents of musical tastes were starting to flow against him. Lou's idea was that, "Let's make a television show. We'll show people how these band are created." "Making the Band" was the perfect combination of reality TV, which was kind of just starting up, and the boy-band thing that was just kind of petering out. It put those two things together, and it made these people characters that young girls could care about. Like, you'd be crushed if the one that you liked didn't make the final cut. Even though we had known that 'NSYNC had been screwed over, even though we had known Backstreet had been screwed over, those boys are like, "Wait, wait, wait, wait, wait. Lou Pearlman's involved?" I'll never forget, there was a break in the day when Lou Pearlman came walking out of the auditioning room, and he was like, "We'll see you inside," or something like that. I was like, "Oh, my God. Lou Pearlman -- He talked to me." When you come back after this little break, you got to have them signed. Every band he's created so far says he's crooked, and they're leaving, and they're suing him. He's the guy giving you the paperwork to sign with his company, and you're like, "What do we do?" You're not really in a position of power as the young performer who hasn't had any success yet. Lou has all the power. Ultimately, we signed the contract, because that was the opportunity on the table. When you look at what you generated, you sell almost 10 million albums, you have these number-one songs, we were grateful for the opportunity. But you realize, "I could have made this much working full time at Starbucks." And that's disheartening. But you're in this weird position, as a young performer, to either take an opportunity or not. My attorney had told me, "This is a bad contract, but it's a record contract." His exact words were, "I don't know how many more of these you're gonna see." He did obviously have success with Backstreet, and 'NSYNC was starting to have success. I was with them when they signed their contracts with Lou. When we received our contract, I took it to my entertainment attorney, and he literally looked at me and said, "You will be committing career suicide if you sign this." And I signed it. When you look back at your life, there were a lot of signs that said, "Yes, do this," and there were a lot of signs that said, "No, don't." And I jumped. You do want to be successful. You do want to work with one of the biggest names in music. And so it's a real dilemma that you find yourself in. So it's sort of out there that Lou had this dark quality to him, where he would use his power and influence to try to manipulate young performers into these really questionable scenarios. Mike Cronin, who worked for Trans Continental Records at the time, pulled us aside and said, "Look, here's the deal. There's rumors about Lou. We don't know. It's unconfirmed. He might have a thing for boys." You know, Lou would come into the rehearsal room, and he would be like, "Guys, let's see your abs. Take off your shirts." This kind of stuff, where it feels like, "Oh, maybe this is part of having a mentor of a band who wants to make sure you're in good shape," 'cause that's what he would always say. "You got to be able to sell teen magazines. You got to be in good shape. Take off your shirt. Let me see your abs." I don't know too much about Lou's private life and what he was into. As a closeted person, I always just thought he was gay, and that was the reason he would act so weird sometimes. He would give you a massage. Like, so he was very touchy-feely. He was just a very touchy guy. It always felt a little, "Okay, I think -- I know what you're doing." We kind of had people around us saying, "Hey, watch out for this behavior. It's kind of been out there that this may or may not be happening." And so you kind of knew what to look for. And I'll never forget, the one time I was alone with Lou, we go back, and he calls me in my room, and he's like, "I want to talk to you about your performance." And so, like, against the advice of a lot of these other people, I go up to his room. And, by the way, the whole time, he was very good at playing on your desire to be successful, and he would say things to me like, you know, "You're the Justin Timberlake. You're the Nick Carter. But you got to stay in shape, man." He takes it another step further and says, "I minored in physical therapy in college. I can give your muscles a pump without you even working out. Come here. Let me rub your muscles." And so then it kind of starts turning into this weird massage, and then all the red flags start popping up. Like, "Oh, this is kind of what everybody's been talking about." And the phone rings, and it's my manager, and he goes to answer the phone, and I got the hell out of there. And that was the only experience I had with Lou that sort of felt like, "Okay, this definitely feels like it's crossing some sort of line." Was that his way of touching somebody without really touching that person? I really don't know. I mean, I knew plenty of gay people, and he knew that I had no problem with it, so if he had said to me, you know, "I'm gay," he knew I would have been fine with that. As far as the talk about him being a pedophile, or doing those things to people, it's something I never saw him do. You had no proof of that. I never saw anything like that. I never witnessed anything happening with him and young boys. I mean, I heard a lot of stories. My opinion of Lou being a sexual predator is that that is not true. That is so foul. He would come up to you, and he'd teach you how to do push-ups. He taught me how to do diamond push-ups so I could build my chest. And he's a pedophile? Shut up about that, guys. I got to be really close with Rich Cronin because his brother Mike was our manager, and LFO came out on tour with us. Rich was one of the members that actually lived in Lou's house with him at one point. I feel I can tell this story because Rich went on Howard Stern and told it. He tells me that Lou basically comes in, and he's all worked up, and he's like, "You know, I got this big opportunity for you guys in Europe." "This could be the make-it-or-break-it moment for LFO. This guy over in Europe, who has this big recording company..." "That's how they do business over there. I don't want you to get freaked out. We got to do what's right for the band. And so I'm gonna let you practice on me so that we don't go over there and blow this deal." He had his tanning bed in his house. I didn't know this at the time, but, you know, you take your clothes off to get in the tanning bed. He was recording the whole thing. So he would show all the boys the video of us girls getting naked and getting into the tanning bed. That felt pretty darn violating. And he would always say that, "Oh, yeah. The Innosense girls come over here and tan all the time, and you can see right in there from here." You know, stuff like that. You know, "oh, yeah. I got every channel that you could ever imagine here, even the porn channels if you want." It all comes back to wanting to impress everybody, and make them feel like, "Oh, man. You go over to Lou's and you can do whatever you want." 100% that was a way for him to, like, be one of the cool kids, and to also, in a way, like, earn their trust. He had cameras everywhere in that house. I mean, I've spent the night there. I've been there a couple of times. I've seen the setup that he has. And it's quite frightening. I mean, it's like something out of a horror-movie set. The control room was in his bedroom. So he could see everything that was going on. That was Lou Pearlman. That was the Lou that we all got to know. But as long as the guys were 18, nothing you can do. I mean, they were there on free will. Oh. Oh, oh, oh, right. Right. Where's that footage? Why didn't she sue him? Exactly. 'Cause it's all lies. I went in that tanning bed all the time. My mom did, too. She searched through it before she would let me go through it for cameras. So did my dad. Lou would not allow us to be released from him without signing the sixth-man agreement. And I also had said to Lou, face-to-face, "I will not sign this release agreement." Because in that release agreement was a confidentiality agreement. And I told him to his face, I put it on his desk, and I said, "I will never sign this, because for the rest of my life, I will tell people what you did." After I had refused to sign the release agreement, Lou had reminded me that he had taken insurance out. On me. And he's like, "Okay, well, I just wanted to remind you that, you know, if you're flying, or you're whatever, just that I have insurance." Would he have ever, you know, gone so far as to something really bad happening to me? I don't know. I don't know that he was capable of that. But it sure felt that way. And then it's not really uncommon to a lot of young actors and musicians and people who are pursuing success to be preyed on by those who are in positions of power and influence above them. I mean, it's a very old story. Lou and I started talking, and I knew right away this was not gonna end well. Lou expanded Trans Continental into a number of other businesses that extended beyond the music business. He bought TCBY, the yogurt company, he bought Chippendales, NYPD Pizza. He expanded into over 100 different businesses, and grew Trans Continental into this sort of global entity. Orlando actually gave him the key to the city. And he purchased an Internet-based talent agency called Options Talent. The problem with it was that he had purchased a company that was already under investigation for fraudulent activities in the state of Florida. My name's Jacqueline Dowd. I was an Assistant Attorney General and Bureau Chief of the Economic Crimes Unit in Orlando. We, at the Economic Crimes Unit, had an investigation going into this company that we thought was deceiving people about modeling. They would approach people in shopping malls and stadiums. "I'm gonna set you up with a photographer. You need to have some good pictures taken." And you spend a lot of money on the pictures, and nothing else ever really happens. We started getting consumer complaints. And we got them in a volume that really did tell us we needed to take a look at what was going on. We were in meetings with him. Literally from day one, he would have to stop the meeting because he was being investigated by the FBI. And, no joke, the FBI would come in to interview him. And somewhere along the line, here, a new Attorney General came into the picture. When Charlie Crist was Attorney General of the state of Florida, Lou Pearlman was a supporter of Crist's campaign for governor. Charlie Crist was the beneficiary of some of Lou Pearlman's contributions, either in cash or in services. Why is this guy, who's the Attorney General, not interested in this huge scam with thousands of victims? "See that photograph over there?" And I turn around, and it's a picture of Charlie Crist and him, shaking hands, looking like the best of chums. He says, "Well, he's gonna be our next governor." And I said, "Oh, really?" And he says, "Yeah, and I'm gonna make sure of that." They did invite us to tour the offices. We drove out there and walked through the offices. I was a little suspicious, though. "Well, look over there. There's where we do this part of the operation. Over there, that's our website." The whole time we were there, nobody looked up at us. They were so busy working, working, working, working. It struck me as odd, because if eight people walked through my office, everybody would be looking at them. "Who are you? Why are you here?" You know, it just seemed staged. And I later found out that it was, in fact, staged for our benefit. On Monday morning, I went into the office, and I was asked if that resolved all of my concerns with the business. And I said, "No. There's some things we need to follow up on." It was made clear to me that my services were no longer needed. I thought it was really sad that you could buy your way out of an investigation. That's not how it's supposed to work. Charlie Crist is now a United States congressman representing the Tampa-Saint Pete area. Seeing -- Seeing what happened later was very frustrating, because, from my perspective, it could have been prevented had we been allowed to continue. But that didn't happen. You know, there was a point where I had it in my hands, and I couldn't make it happen. Women love a man that can dance, and doesn't have to have -- you know, drink a million drinks before they get out on the dance floor. I always had the greatest time just dancing. And, once in a while, somebody wanted to follow me home, and that's okay, too. But I was just there to have a good time dancing. Then got to be pretty good about it, I guess. That's our story. What, the going home or the dancing? The dancing. Probably both. That was a bit before you. Yeah. It's okay. I got my stories, too, that we won't talk about. We first found out about our investment opportunity here with Pearlman when her mother left her a sum of money, and we thought to put it as safe as possible and plan the rest of our lives around this money. I was a financial writer and personal-finance editor for the St. Petersburg Times, which is now known as the Tampa Bay Times. I started getting a few calls, letters from people asking me about Lou Pearlman and Trans Continental Airlines. And some people sent me their paperwork, and I could tell by looking at it that there was something very fishy. We didn't get any bank returns to show that we were making money, any financial statements or anything to show what our money was doing for us. Nothing. This went on for three or four -- a couple of months. On the phone, "Where's our checks? They're not here yet." "It'll be coming. It'll be coming." And then when you called, then you couldn't even get through to anybody. My father and I drove up to Orlando to check it out. And so we were wanting to see this insurance policy, and it was in a vault. It was in the safe, and only Lou could bring it out. "I mean, come on, it's piece of paper. Are you sure? We came all the way up here." "Oh, no. Only Lou can do it." People started asking for their money back, and they couldn't get it. All of a sudden, this man who had been so attentive to them, and whenever they had any questions, he was always happy to answer them, and then all of a sudden he's so inaccessible. The big case that we had was dealing with a contract dispute with the Backstreet Boys. Well, as it turned out, Mr. Pearlman then utilized a different law firm to effectively collect the money. He decided that he was gonna cheat us. So I sued him. On the final day of the trial, "The judge has entered a judgment in your favor for $16.5 million." He arranged for a bank wire transfer from a bank in Munich, Germany. And it didn't show up. We can't find a bank by that name in Munich. I don't think it exists. I'm laughing now. You wouldn't have wanted to be in my shadow at that time. Suffice it to say, I wanted to make the scorecard right. I'm sure he knew eventually there'd be a day of reckoning. I won't reveal all of my thoughts, because I couldn't have done what I wanted to do to him. I remember getting a call from an attorney here in town who had actually represented Lou Pearlman. And in the course of that lawsuit, Lou had submitted a financial statement which basically indicated he had little or nothing. At the same time, he's borrowing money from banks all over the country, and he's indicating he's got all kinds of net worth. He had income that was traceable from these big bank loans, and he had income from 'NSYNC or Backstreet Boys. If you're able to convince banks to lend you money, you're pretty good at defrauding people. After the first article appeared, I did hear from a lot of investors, and they were really very worried. People started asking for their money back. I read in the paper that there was an investigation. I was getting very concerned. People initially didn't want to believe that they weren't going to get their money back. This guy's a rich guy. The money is somewhere. Where is it? We knew there had been several civil cases where banks had sued him. We basically got those records. Obviously they differed by quite a bit. One of the FBI agents I did a lot of work with, by the name of Scott Skinner, came to me and he says he looked like he had a possibly promising bank-fraud case involving Lou Pearlman. One of the first things we had to do was to accelerate our time table. I think he new right then it was a criminal matter, so I think he started looking for an exit strategy at that point. I don't know how you spent your Valentine's Day in 2007, but I spent mine getting a search warrant for the residence and at his business. We had the pieces that we needed to be able to bring our case against Mr. Pearlman. And as we started going around and asking employees, friends, we learned about the investment program that he was offering through Trans Continental. One of the days where, you come into the office, and chains on the doors. The FBI is here, and they're going through paperwork in everyone's office, looking for things. His business, by that point, there weren't many people there. But there were a lot of documents, and his desk was -- it looked like he had just abandoned it. The safes at his residence were cleaned out. It clearly had the look of someone who had left in a hurry. And it was clear that our case was not gonna just be a bank-fraud case, but that there was gonna be an investment-fraud case, and we were looking upwards of over $100 million. Lou wasn't a dumb guy. He was a smart fella. And I think he knew that the writing was on the wall, and the sooner he got out of town, the better. Everything started crumbling around him. And, you know, he knew that he was in trouble, so... ...he just, you know, left. The early memories that I have of Lou and myself, you know, talking to people outside of the airport office, I really enjoyed those days. Now, although I wasn't really involved with Trans Continental or any of the fixed-wing operations, I always loved models. What Lou did is, he took my 747 model -- it was maybe about six inches longer than this -- and he branded it, and then he took it over to LaGuardia Airport, and then he very cleverly held it by the tail and made look like it was taking off. And so most of the model was still visible without his fingers showing that it was a model. So people actually, when they saw these photos, thought that the model was an actual 747 that was a Trans Continental branded airplane. I was very upset when I learned that Lou had used a model that I had built to deceive people. On paper, it was a business, an operating business, with far-flung enterprises, including what we like to call the only airline in the world without a plane. It was always odd that we were booking flights with Delta and American, United, Southwest, but never Trans Con Airlines. Never just "Hop on the plane." It's kind of odd. He said he had an airline. All he had was by-the-hour. He would lease a plane. It was amazing. And he would stretch whatever he was doing and make himself look big, and give people confidence to invest. Even if there really was nothing at all to invest in. Now, this was considered a Ponzi scheme because the money from the later investors was used to make payments to the earlier investors. And the problem is, is if you don't continue to bring the new people in, or if a lot of the old people want to have their money out, you don't have enough money to pay all of that. And that's what leads it all to fall apart -- people asking for their money back, and there is no money to pay them. Initially, he was selling stock in a company called Trans Continental Airline Services, Inc. And the representation always was that this was a company that provided all sorts of airline services. Totally fictitious. This whole Ponzi scheme, and this criminal activity that he's done, he's been doing since the '80s. You know, he's been, you know, fooling people, you know, for a long time. All this music and the bands that he helped was all on the backs of money that was stolen. And then we become that validation for him. You know, once he had a successful group like us or Backstreet, now he can say, "Ah, look at this. See? This is what I can do. Give me more money," and just use that to take advantage of more people. I just remember you calling me and telling me. I was just shocked, because I did not know all of this had been going on. In a way, I mean, he used us to scam other people, and that's horrible. That's horrible. But every once in a while, if we were in a recording studio, the rehearsal studios at Trans Con, someone would come up to you and go, "Oh, I own that group. I own the Backstreet Boys. I own 'NSYNC." And I'm like, "What do you mean, you own them?" "Oh, yeah. I'm an investor with Lou, and we own that." You go back to Lou, and he would say, "Oh, no. They're invested in the Eisa account, but they think they own the Backstreet Boys or 'NSYNC, but they don't. This is a whole different company." So you just scratch your head. All of a sudden now, things start to make sense. The contracts, the 1/6, the lawsuit. Then to find out how many other people this whole thing that he did affected. And there were supposedly about 2,100 people who were investors. He would mislead the investors into saying that these savings plans were FDIC-insured. The tax returns and the statements looked like they had been professionally prepared, so people relied on them. We needed to reconstruct all the cash transactions. A lot of money flowed in a circular fashion. You would have a hard time tracking it. It's like a hornets' nest. And you really have to untangle that to figure out what money is going outside the sphere. People tend to ultimately believe that they're in on a good thing, and they're not really engaging in risk. And that's how Ponzi-scheme operators are successful. Lou was masterful at that. How he developed the skills to do that will always remain a mystery. The bank fraud was somewhere around $250 million, and the investor fraud was somewhere around $250 million. So altogether, somewhere around $500,000,000. I recovered approximately $38 million. Unfortunately, most of the victims lost almost all of their investment funds. I remember the day when we found out it's gone. Her money from her mom, God bless her. Yeah. You know, my husband, when he was in the service, when they would have to retreat, he'd have to walk past, back past the bodies of his buddies that were swollen, maggots coming out of them and all. So you see what he went through so that that SOB could steal from everybody. You want to protect your country, keep your country well, but these people like that are just degrading it all the time. Now where do we go? Now what do we do? Now what's gonna happen to us? Yeah. It's not a good feeling. At all. And you read about that, and you hear about that, and then now, you know, people say, "It could happen to anybody." "Well, no, it's not. It's not gonna happen to us. We're different." Well, guess what? It just happened to us. So maybe we're not all that damn different. When you're blaming yourself, you forget about all the due diligence you did. You just look at the failure. My father didn't -- He was always -- there's a sadness about him. It created a lot of stress in the family between my parents, because my mom put her little IRA in there, too. And in the end, it was all smoke and mirrors. It was all fake. It was all truly criminal. Why was enough not enough? How can you live with yourself now, like, knowing the damage that you caused? I mean, people took their lives over this scenario. Getting into his mind, it makes no sense at all. How can you take something that's working and something that's amazing and decide that, "It's not enough, and I need to do something wrong to make more"? This guy needs to be caught, and he needs to be punished for doing this to, essentially, a bunch of old people who don't have any way to get any more money. He would disappear for a week or so, and you would ask, "Well, where's Lou?" And the running joke was, "Lou's gone to the Bahamas to make payroll." One day I actually asked Lou, I said, "What do you do in the Bahamas to make payroll?" And he's like, "I'm one of the greatest gamblers in the world. You need to come to the Bahamas and see how I roll those dice," you know. "I'm making $100,000 a roll." And it wasn't until the whole thing unraveled that I was like, "Hmm, well, maybe that's where the treasure is buried." Trust me, there's one person that knows where Lou hid the money. There has to be. And that person is being very smart, 'cause that man hid money all over the world. Finding him was like an international game of hide-and-seek. There had been sightings around in Europe. "He's in Panama," or, "He's here, he's there." We would get some leads, but oftentimes they were more just predictions of where people thought he might be. When Lou fled, Helen Huntley was following the story quite closely. She was running a blog. She kept the blog alive and kept everything alive. I got an e-mail from one of the readers of the Times who was on vacation in Bali with his wife, and he had seen Lou Pearlman. Initially, I thought it was Lou sending us the e-mail, just trying to feel us out and find out what's going on. My response was, "Hey, look, you know, if you see Lou, tell him he's not in any trouble. We would just like to talk to him, get his side of the story. Because in all investigations, there are two sides to the story." And that was true. But we also wanted to arrest him, too, so... So, FBI's got agents stationed all across the world. When the agents showed up in Bali, they thought to themselves, "Well, it's early. Let's go get breakfast." Well, the place they happened to pick was the place where Lou Pearlman was eating breakfast. Meanwhile, the tourist is getting a little frustrated, and ends up sending Scott a picture of Pearlman eating breakfast. And in that photo of Pearlman eating, in the corner are our two FBI agents who are eating breakfast, as well. It was really a fortuitous event for us. Pearlman didn't raise any issues, and at that point, we were off and running in terms of our criminal case moving forward. Pearlman pled guilty to two different conspiracies -- one conspiracy related to his investment-fraud scheme, a conspiracy to commit mail fraud and wire fraud, a second conspiracy related to his bank-fraud scheme. He also pled guilty to money laundering, and also to committing bankruptcy fraud while he was on the run. We had to have the sentencing in the Ceremonial Courtroom, which is our biggest courtroom, because there were about 200 people that showed up who were mostly his investors. They all had fire in their eyes. Even if he gets the money back, he should be put in jail, and kept in jail until he dies. I sentenced him to the maximum of 25 years. Which I believe, at the time, was either the longest or close to the longest sentence for any fraud case. And then, all of a sudden, it came to me. I saw all of these angry people in the courtroom, and I said, "Mr. Pearlman, I'll tell you what I'll do. For every $1 million that you pay back to these people in the courtroom, I'll give you a month off." And he actually did have some ideas about some scheme he could have run from prison. He was gonna -- you know, if they would just allow him access to the Internet and phones, he would be able to get a new band going, and, you know, all this. But that didn't happen. Much to my amazing surprise, I starting getting collect calls from Lou from jail. And he was telling me that he was gonna get out of jail, that this was all a big mistake, et cetera, et cetera. He sounded like a scared little boy. And I guess he was reverting back to those days where our friendship was strong. I think he needed somebody like me to speak to. I don't feel that he knew how much of a criminal he really was. When I found out that Lou had passed, at first I didn't believe it. And I went online, and it was all over the place. Lou Pearlman died behind bars in Florida while serving a 25-year sentence for orchestrating a Ponzi scheme. Before that, Pearlman was heralded as a pop genius, bringing the world pop sensations like 'NSYNC and the Backstreet Boys. And I felt cheated. You know, I felt that I never did have closure with Lou. I felt a lot of relief. Because I felt like he terrorized me for a while. Like, I'm looking at that slate right now that says "Lou Pearlman Project," and it's just so sad. It's just -- it just hurts, man. It hurts to see people attack him, and continuously attack him, because I go through the same thing. I'm going through it right now. He was a-a gummy bear. I got to take a break for a second, guys. All right? Take as long as you need, man. Yeah. I-I just need to... I know. Just give me a second. It was the most, like, mixed emotions ever. You don't know whether to cry. You don't know whether to laugh. You don't know whether to be relieved. You don't know whether to feel bad for him, feel happy for everybody else. It's just... There was so much wrong with everything about him and what happened that you don't know even how to take death. The story of Lou Pearlman is a sad one, because here's a man who could have really legitimately had it all. He could have paid everybody back. But that never crossed his mind. But on the other hand, he did change history. He changed the world of music. I think we all do it because we're human. We reflect back on things that happen to us, the good and the bad. but especially the bad sometimes. And we think, why did this thing happen to us? For years and years and years, I racked my brain about why did this have to happen to so many people? You know, look, I'm sad. I never want to see anything bad happen to anybody. He wasn't the healthiest person from my point of view. You have to have a special personality, with not-caring psychosis of some sort, to be able to pull something like that off, I think. He's the cautionary tale of the businessman who let greed spiral so far out of control that he literally left behind all the success that he really truly did created, and now he'll forever be remembered as a criminal. And in that sense, you have to learn from that and go -- you know, you never want to become that yourself. Like I said before, he wanted to be loved and revered by everybody. And I think that whole famous-by-association thing, he wanted to say, "I did this. I gave you this boy band. I put this together. I brought this to you. I'm the one." He wanted to be part of the family. A man who had everything, had the world in the palm of his hand... ...but was never settled. In so many ways, I feel like he almost derived this God-like complex. Like, you know, "I am untouchable. I can do whatever I want, say whatever I want. Worst-case scenario, buy my way out of a situation." I had to let go of needing to find that answer, because I may not ever know why. It's like a tabloid. There's 10% of truth to everything Lou said, and 90% of him taking it somewhere else. From the outside, you can look in and say, "How could you believe that? How could you be so duped? Did you not see that?" But when you're inside, you don't know that that's happening. I wanted to believe that all this was gonna happen. I wanted to believe the lies. I mean, that's how I was duped. I think it's so much easier for someone to believe a lie when it affects you in a great, positive way. You tell someone something that they truly want in their life, and they can dream about, you want to believe it. And I sure did. Yeah. I mean, I really felt the same way. I wanted to believe all this was true. So we all just kind of held on to that dream. Mm-hmm. Lou could sit there with a green pen and convince you, in a matter of minutes, that it's purple. He had a way with words. It was his body language. It was his mannerisms. It was the way he would look at you, with intent, to convince you. I took a master's degree in Queens College on teaching social studies. One day I was in the Strand Book Store, and I picked up a book from the 18th century. Unedited. Just letters from George Washington. And I gave it to my professor. He always preached to us to use primary material, source material. About a week later, he walked in with that book with a bunch of Post-Its in it, and he wrote on the blackboard in very big letters "There are no facts." And then he told us about all the inaccuracies in the letters that George Washington wrote himself. He explained to us that primary material can be wrong. And with Louie, you could know Louie, you could look at pictures, you could get information all you want, but you don't really know what's a fact. Things were colored, things were stretched, and sometimes completely invented. You know the old saying -- "For those that believe, no explanation is necessary. For those that don't believe, no explanation will suffice." "There certainly are female performers who work every bit as hard, and sometimes harder. But generally I've found that teenage males are more focused and less emotional." Oi. Well, his behavior surely represented this quote. That's what I'll say about that. "I saw a much bigger world from my vantage point above the Goodyear blimp, flying out of Flushing Airport. My view of life was changed forever. There are no boundaries where you fly. No stop lights. No end of the road. The horizon is unlimited." But he stole my life. I mean, there's no doubt about the fact that a lot of what he wrote about his early life was really my experiences. "I go over every contract repeatedly with our performers and their families and their lawyers. I have put people to sleep explaining the details to them. But I want everyone to know what they are getting into." Ha! Oh... Well, that's bullshit. |
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