Lou Pearlman

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Lou Pearlman Employee Savings Program and Trans Continental Airlines Investment Fraud Ponzi Scheme from Orlando Florida dupes elderly victims from across America. Governor Charlie Crist refuses to return campaign contributions made with stolen money. Former Attorney General sued for failing to act on earlier warnings of fraud by Pearlman who was finally captured for massive $300 million dollar fraud.

Despite the overwhelming and undisputable evidence put forward by Florida authorities that his corporate employee savings program, offered to the general public since 1991, was a massive fraud, Lou Pearlman, of Backstreet Boys fame, in an open letter to the Orlando Sentinel, expressed his optimistic vision of a bright future and love for Florida, not once mentioning any concern for the investors, many of whom were elderly, who trusted their life savings with the seemingly self-absorbed Svengali.

Somehow blaming the latest news of securities malfeasance and unpaid bank loan debts, currently exceeding $447 million, on his success, Pearlman, from safely abroad, stated, "The tremendous amount of attention given to my private company is largely due to the fact that although we are a local company, we have enjoyed high-profile success on an international scale."

Beleaguered by multiple lawsuits, the promoter still managed to maintain a positive spin of things even as his Church Street offices in Orlando, jet and personal condominiums were being foreclosed upon as security for the multiple loans he has since defaulted on. "I’m an optimist. Rebuilding and making things better is what I do.."

Initially blaming the rash of multi-million dollar lawsuits on greedy exploiters of his fame and fortune, the Orlando landmark turned his attention to media naysayers while expressing pride in what he has accomplished thus far. It seems, however, that given the implosion of his talent and airline empire under colossal debt and legal wranglings, Mr. Pearlman may not have been justified in taking a $200 million dollar dividend from his debt-strapped concerns in 2005/06 alone, according to a state lawsuit..

While living on the run in Europe, or some tropical locale, may have curtailed some of Pearlman's opulent indulgences, the errant entertainment expert has managed to totally devastate a multitude of elderly investors who relied on his jovial charm and purported business acumen to protect their retirement savings. While reassuring savings plan and stock investors that all was well, Lou was simultaneously selling off any tangible assets, converting them to cash in hand for his evasive trip abroad.

As they delayed investor withdrawals by promising eightfold riches from an imaginary IPO, Lou Pearlman and his Trans Continental employees were simultaneously carting off documents and valuables, including crystal vases, plasma TVs and furniture. Though some items were returned in response to demands by the receiver, Pearlman sold off his interest in various entitles, such as the Rocks jewelry store and Pearl Restaurant in Orlando and luxury condos and apartments in New York City as well as some of his cars, leaving the rest under a burden of debt.

Although Pearlman created more than 100 companies, they were all run as one enterprise, with money flowing from one to another without any use of acceptable accounting standards.

The man who launched 'NSync and the Backstreet Boys used money from new investors to repay old investors until the long-running scheme imploded. Whether it ran out of money or he just decided it was time to run off with the bulk of it is unknown at this time. What is known is that he left the country owing over 1800 investors more than $317-million and banks $130 million. Once known as the preeminent boy-band promoter, Lou Pearlman’s major accomplishment will be to have orchestrated the world’s longest running Ponzi scheme in history.

While most of these investment frauds implode within 18 to 24 months. "Lyin’ Lou", through his enormous public persona, and the wisdom to keep the bogus interest rate reasonably low, has managed to dupe the investing public and the authorities for over twenty years.

Promoted by a select group of salespeople who portrayed themselves as financial advisers, the EISA program guaranteed rates which bested bank offerings by providing from 6 to 10% depending on how much you deposited and how long you locked it in for. These agents of Pearlman, many of whom have histories of selling questionable high-yield securities, were paid up-front commissions of about ten percent.

Beyond entrusting their life savings to Lou, many considered him a family friend, inviting him to special events such as weddings or asking him to be the executor of their wills. Ever the savvy salesman, Pearlman remembered to call people to sincerely wish them a happy birthday.

Pearlman's investment fraud prowess now overshadows a litany of other fraud related activities for which he has yet to be held to account for. These include bankruptcy fraud, bank fraud, insurance fraud, tax evasion, securities fraud, wire and mail fraud, money laundering and racketeering to name but a few.

Long protected from public exposure by his vast array of influential Republican supporters and his vindictive use of litigation to suppress any individual detractors, Pearlman seemed immune from prosecution despite a litany of warnings to the authorities. It finally took the magnitude of a half billion dollars in victim losses to break the aura of invincibility.

Still, many victims are shocked that government regulators haven't done more to protect investors. Records show that a federal investigator suspected as early as 1995 that Lou Pearlman's investor program might not be as secure as the mogul claimed -- and asked Florida officials to investigate. But despite that and other red flags raised in 1999, 2001 and 2004, government authorities did not seek to shut down the Orlando-based investment program until late in 2006.

So, aware for years that Pearlman was offering unlicensed and unregulated securities to the general public, the Florida agency responsible for putting an end to his unrepentant chicanery, the Office of Financial Regulation, instead accepted the unsubstantiated word of the self-professed billionaire that he would no longer do so.

Investors, reassured that their investment was not only FDIC insured ( Federal Deposit Insurance Corporation) but backed up further with supplemental coverage from AIG and Lloyds of London, consolidated their entire portfolios into the one security, many handing over millions of dollars. Even those that deposited far less, often gave up their entire life savings based on outright lies and document-backed deceptions.

Even months after the FBI and the IRS raided his home and business headquarters prosecutors seem overwhelmed by the scope of his deceptive criminality to the point that they have yet to lay charges.

Left destitute by these remorseless conmen, the distraught victims, through a website at http://scammedbypearlman.com are now pleading with the federal government to help by at least giving tax credits to affected investors based on a sliding scale according to their age, with the most elderly receiving a tax credit of 10% of their lost investment each year, spread over a ten year period.

While victims have been encouraged to send letters to national media outlets, congressmen and other elected officials, the campaign has so far been met with apparent indifference to their plight. Even Charlie Crist, the newly elected Governor of Florida, has remained mute on the topic, perhaps due to the fact that he has personally been named as a defendant in an investor lawsuit for failing to properly investigate and act upon some of Pearlman's other apparent crimes.

Les Henderson, one of many fraud awareness advocates who have covered Pearlman's misdeeds for years, wrote “Crimes of Persuasion: Schemes, Scams, Frauds”which deals with telemarketing and investment fraud in general as does his website www.crimes-of-persuasion.com

Lou Pearlman on Wikipedia

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Boy-band talent mogul and Svengali impresario Lou Pearlman exposed for consorting with criminals.

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Crist tried to 'whitewash' probe into modeling agencies

Jackie Dowd defends suing Lou Pearlman's companies.

Orlando Weekly discusses Lou Pearlman

Helen Huntley Trans Continental Blog

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