Pattaya Daily News

22 May 2008 :: 15:05:44 pm 4183

Us Boy-Band Impresario Rips Off Banks And Investors To The Tune Of Usd300 Million

Music impresario, Lou Pearlman, responsible for bringing boy-bands such as Backstreet Boys and ‘N Sync to fame received a 25-year jail sentence in Orlando, Florida, USA, for what was described as "audacious, two-decade scam" involving ripping off USD300 million from investors and major U.S. banks.
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Further gall was shown by Pearlman who attempted to delay his sentencing using the excuse that if he were allowed to launch his latest creation, European pop band, US 5, in Asia the US, the consequent “significant profits” expected from launching the band could go towards paying restitution. The court, however, was not prepared to grant his wish.

The jet-setting swindler was, however, offered a let-out clause by the U.S. District Judge G. Kendall Sharp, who offered Pearlman the opportunity to reduce his prison term by one month for every $1 million manages to recuperate; effectively getting -out-of-jail-free if he recovers the full amount. In March, Pearlman pleaded guilty to four counts: two of conspiracy to defraud banks and investors, one of money laundering and one of making false claims in a bankruptcy. As a result, various assets were seized including a mansion, and a Rolls Royce, but these will not be taken into consideration as regards the judge’s jail-reduction offer.

Pearlman’ s scam was based upon luring potential investors into putting their money into two fictitious companies: Transcontinental Airlines Travel Services Inc and Transcontinental Airlines Inc. This was supported by a bogus financial statements created by a phony accounting firm to give his investors confidence. The banks who invested were lambasted by the judge for failing to ask the most obvious question “where is the evidence of the planes flying for these airlines?”

Pearlman even ripped off his family and his close friends, but the most heinous crime involved depriving elderly investors of their life savings. The judge cited the case of Juanita Reynolds of St. Petersburg Beach, Florida, whose 90-year-old husband was one of the victims. “Tears ran down his face and he said he’d lost all his self-confidence and he died seven months later,” Juanita recounted.

Other elderly investors were more vengeful, “When Pearlman comes out of prison, he should be turned over to us,” investor James Taylor is reported to have said.

Reporter : PDN staff   Photo : Internet   Category : Entertainment News

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