Boy band creator bilked investors for decades
Lou Pearlman, the man who created the Backstreet Boys and ‘N Sync, was sentenced Wednesday to 25 years in federal prison for engineering a decades-long scam that bilked thousands of investors out of their life savings.
It was the maximum sentence the boy band mogul could receive for allegedly swindling some $300 million from investors and banks since the early 1980s.
He pleaded guilty in March to two counts of conspiracy and single counts of money laundering and presenting a false claim in bankruptcy court.
U.S. District Judge G. Kendall Sharp noted that many victims were Pearlman’s relatives, friends and retirees in their 70s or 80s who lost everything.
“The sympathy factor just doesn’t run very high with the court,” Sharp said.
However, the judge said he would reduce Pearlman’s sentence by one month for every $1 million returned to investors. It wasn’t clear how, or if, investors would ever be compensated.
“I want to say clearly that there’s no pot of gold out there,” defense attorney Fletcher Peacock said.
Prosecutors allege Pearlman scammed individuals out of an estimated $200 million, and banks out of another $100 million.
The courtroom was packed with victims, some of whom gave emotional testimony. Another two dozen or so waited outside.
“Over the past nine months since my arrest, I’ve come to realize the harm that’s been done,” Pearlman said in a short courtroom statement. “I’m truly sorry and I apologize for what’s happened.”
Peacock said Pearlman meant to pay back all the investors, and noted he had returned about $103 million.
He said Pearlman got caught up in lawsuits – also alleged fraudulent business practices – over his otherwise successful entertainment ventures in the 1990s that prevented him from returning the money.