Kriti Mehrotra
As a David Terry Fine-directed documentary series living up to its title in every way conceivable, Netflix’s ‘Dirty Pop: The Boy Band Scam’ can only be described as baffling and scandalous. That’s because it delves deep into the tale of once-renowned business plus entertainment mogul Louis “Lou” Jay Pearlman through the eyes of those who were an unwitting part of his journey. After all, this entrepreneur turned talent manager was actually the brains behind one of the largest as well as longest Ponzi schemes in US history, leaving more than $300 million in debt.
Lou Pearlman’s Con Spanned Nearly Three Decades
It was reportedly back around the late 1970s when Queens University graduate Lou kickstarted his career as an adult by launching a luxurious helicopter taxi service in his native New York. However, no one could’ve ever imagined he would soon manage to convince a German businessman to take an interest in his ideas, train him on blimps, and then help him establish a related firm. Airship Enterprises Ltd. hence came to be, followed by Airship International (a registered public entity), yet neither panned out owing to their air vessels consistently crashing to the ground.
The truth is Lou had relocated his latter venture to Orlando, Florida, in July 1991 before signing several big-name clients and thus landing big investments, but apparently, nothing was really real. According to reports, although there were times Airship’s stock prices were so high they were considered penny stock liquid, the company always reported little revenue, net income, or cash flow. In the end, despite the former’s connections plus outside investments, its stock ultimately crashed as a result of undeniable craft crashes, causing him to close the business’ doors for good.
Lou Pearlman Owned Several Companies, Real and Fake
It was purportedly then that Lou launched Trans Continental Airlines Inc., Trans Continental Records, as well as their parent organization, Trans Continental International Inc., to continue securing funds. But alas, these firms initially existed only on paper, that is, until he grew inspired by the success of a boyband called New Kids on the Block and chose to seriously begin dabbling in this industry too. He actually managed to form global sensations like Backstreet Boys and NSYC in the ensuing few years before also representing O-Town, Natural, Innosense, Aaron Carter, and many more.
However, apart from allegedly just swindling some of these artists via unfair contracts, Lou also paraded them across the globe at every opportunity to attract more investors to keep the show going. As if that’s not enough, he even got many employees, their family members, plus retirees to imbue their hard-earned money into his so-called empire with a promise of high returns through dividends. A scheme he launched as a part of this whole scam was the Employee Investment Savings Account (EISA), wherein he essentially guaranteed employees not only dividends but also major incentives.
However, what’s imperative to note is that Lou succeeded in fooling people by claiming his empire was far larger than it was — he did have a record label, a studio, a historic entertainment complex, and several eateries, but he did not have an airline, a german bank account, or an accounting firm. Nevertheless, over the years, he managed to acquire funds in the form of massive loans from several banks too — his last was ostensibly for $1 million from the Bank of America in early 2007 while he was on the lam in Bali.
As per formal records, it was in 2006 when authorities finally caught up with Lou’s activities, only to announce a few weeks later, in early 2007, that his programs were indeed fraud — they were nothing but a Ponzi scheme. In other words, he falsified several official documents while showcasing a luxurious lifestyle to win investors’ trust prior to also using forged financial statements from his fictitious organizations to secure millions in loans, all to keep the facade he had built going — 84 firms of varying legitimacy degree.
Lou Pearlman Never Showed True Remorse
Therefore, when Lou was finally apprehended from a tourist resort in Bali, Indonesia, on June 14, 2007, a federal grand jury charged him with conspiracy, making false assertions, money laundering, and filing false bankruptcy. He was subsequently extradited to the US, where he pled guilty to the charges against him during his plus his companies’ involuntary bankruptcy proceedings in 2008, following which he was handed 25 years in prison. It turns out Lou had scammed thousands of individuals and banks of over $300 million, out of which only $10 million could be recovered from the sale of his assets — mansion, luxury vehicles, plus other miscellaneous items.
Alas, according to reports, this talent manager turned conman never really regretted his actions because he had a plan to make things okay in the long run; a plan he expressed involved more work in music entertainment. Lou gave an interview prior to his sudden 2016 demise while incarcerated, stating, “I had my way to make it all right. I just didn’t have my chance to do it… I think I could have. If I was given a chance to put another band together, that would have paid everybody back. But I never had that opportunity, and that’s what was very upsetting.” He also said, “I wished I wasn’t involved in the airline business to begin with… Because it’s very capital-intensive and caused a lot of headaches for me… When things build up over time, it’s kind of like the dam that keeps springing holes in it and you just gotta keep plugging the holes, and you don’t realize that you need a new dam.”
