He was known as the sixth member of NSYNC, but the reality behind Lou Pearlman was much 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 groups of the 1990s, including the Backstreet Boys.
But while the talent manager was busy distracting the masses with a torrent of 2000s hits, he was running one of the longest-running Ponzi schemes in American history, convincing banks and individuals to invest in his fake company.
Pearlman made millions from young musicians who lacked knowledge of the inner workings of the music industry, allowing him to pay the Backstreet Boys just $35 (£27) a day while selling 70,000 records at his peak.
Now, the revealing docuseries chronicles the con artist’s journey to dizzying heights and his fall from grace that led to him being sentenced to 25 years in prison for conspiracy, money laundering and sham bankruptcy proceedings.
The shady past of American talent manager Lou Pearlman (pictured in 2005) is the subject of Netflix’s latest documentary series, Dirty Pop: The Boyband Scam
Before entering the music world, Pearlman first ran an airplane charter business, according to guardian.
But when he chartered a plane for the boy band New Kids on the Block in the mid-’80s, he saw how much money there was in the industry and decided to change careers.
He moved from New York to Orlando and billed himself as “Big Poppa.” Hungry for cultural and financial capital, Pearlman set out on a quest to find his own baby-faced protégés, hosting self-funded open auditions.
She founded her record label, Trans Continental Records, to mimic the New Kids of the Block business model, hoping to find similar levels of success with different leading men.
In 1992, Lou placed an ad in the Orlando Sentinel looking for male singers to form his first band, according to Vanity Fair.
A year later, he found the five male singers to form the Backstreet Boys, and his wife Donna and New Kids on the Block’s former manager were tasked with managing them.
From the start, Pearlman pampered the boys as if they were already the biggest stars in the world, lavishing money on private jets and other luxury transportation as they toured shopping malls.
The group, consisting of Nick Carter, Howie Dorough, AJ McLean and their cousins Brian Littrell and Kevin Richardson, became one of the best-selling boy bands of all time, achieving gold, platinum and diamond certification in nearly 50 countries.
Pearlman helped NSYNC find worldwide fame (pictured: Lou Pearlman poses with Chris Kirkpatrick, JC Chasez, Lance Bass, Joey Fatone and Justin Timberlake of N’Sync at NYPD Pizza in Miami, 1996)
From Backstreet Boys to NSYNC to O-Town, Pearlman helped form some of the biggest boy bands of the 1990s (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 over as the group’s manager.
Like the Backstreet Boys, NSYNC also rose to fame, selling millions of records worldwide.
His hits cemented his position as a music mogul, not to mention the other bands he managed, including O-Town, Take 5 and Natural.
But behind the scenes, Pearlman was tricking investors into handing over their life savings.
Traveling backstage after shows and witnessing firsthand the legions of fans the bands amassed, investors were eager to get a slice of the pie.
For 20 years, Pearlman encouraged investors to pour money into Trans Continental Airlines and Trans Continental Airlines Inc, which he said included the record label and music studio.
However, both companies existed only on paper, and Pearlman developed a fake German bank and a fake accounting firm in Florida to make his shell companies appear legitimate, according to Museum of crime.
To the outside world, Pearlman was a music mogul capable of turning ordinary kids into global sensations (Lou is pictured with singer Aaron Carter in 2005).
The talent manager treated the Backstreet Boys and NSYNC to star treatment, including private jets, from the get-go.
Netflix’s new docuseries interviews band members to uncover the truth about Lou Pearlman
Things began to change when members of the Backstreet Boys felt that Pearlman was enjoying the fruits of their labor at an unfair price.
They made hit songs, sold out stadiums and built a global fan base, but in return they pocketed a pittance while Pearlman pocketed millions.
Lance Bass said the first warning sign about the music mogul’s shady dealings came 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 in front of us and I knew my life was about to change… then I opened the check and it was $10,000,” she revealed in an ABC television interview.
‘I knew we had worked really hard, so I knew what that check should be, or what I expected it to be.
“I mean, in the best of all worlds, a million dollars would have been like… Oh my God. That’s what we deserved,” Bass added of working with bandmates Chris Kirkpatrick, JC Chasez, Joey Fatone and Justin Timberlake.
“Then I went back to the hotel room and that’s when it all hit me. I was so disappointed that I tore 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 on charges including money laundering (pictured: Pearlman arrives at a Florida court to appear in court to answer three counts of bank fraud and one count of mail and wire fraud involving $20 million worth of loans from an Indiana bank)
The group members asked Pearlman to return their rightful earnings, but in 1998 the Backstreet Boys filed a lawsuit against NSYNC in 1999.
Between 1993 and 1997, Pearlman and his company grossed $10 million, but the band earned only $300,000.
In his contract, Pearlman was supposed to be paid as a sixth member of the band, meaning he would earn one-sixth of the band’s income, but he ended up pocketing much more.
NSYNC sued Pearlman in 1999 for unfair business practices, suing him and his record company Trans Continental for defrauding the group of more than 50 percent of its profits.
As with the Backstreet Boys, he had promised the group that he would only receive one-sixth of their earnings.
The two parties reached an out-of-court settlement and NSYNC signed with Jive Records.
It was later revealed that the Backstreet Boys received just £7,800 ($10,000) for years of hard work and lived on allowances of £30 ($35) a day.
It marked the beginning of the end for Pearlman because he wasn’t just letting his bands down.
He was the man behind one of the largest and longest-running Ponzi schemes in American history, where he defrauded $300 million through his Trans Continental companies over the course of 20 years.
In his scheme, he duped 1,700 investors out of $500 million by convincing them to invest in several shell companies 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 scam was uncovered in 2006 and Pearlman pleaded guilty to conspiracy, money laundering and making false statements.
When investigators looked into the case in February 2007, they discovered that at least $95 million he had pocketed from investors had already disappeared.
The Queens-born con man 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 of the musical artists who worked with Pearlman ended up suing the scammer 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 does NSYNC’s Chris Kirkpatrick.
Watch Dirty Pop: The Boyband Scam on Netflix now