Boy Band Man On The Lam

Boy-band impresario Lou Pearlman appears to be on the lam from investigators and investors alike, as his Orlando-based empire crumbled in recent weeks. At press time, at least 13 Pearlman companies, including several under the Trans Continental banner, were put under the control of a court-appointed administrator to protect any remaining assets.

It’s widely believed that Pearlman, the Florida businessman behind the boy-band phenomenon that spawned such acts as ‘Nsync, Backstreet Boys, and Aaron Carter, has left the country.

Authorities have been unable to find him, or a 727 jet belonging to Planet Airways, since late January, according to the Orlando Sentinel. Pearlman was Planet Airways chairman until May 2005, according to the paper, and the company is included in a $1.8 million judgment along with Pearlman and Trans Continental Airlines.

Pearlman and his companies owe more than $317 million to 1,800 investors and at least another $120 million to financial institutions, according to the St. Petersburg Times.

The onetime mogul saw the walls closing in on him in recent months, with at least four banks, including one in Indiana and another in Minnesota, suing him for defaulting on loans.

Most recently, Integra Bank of Indiana declared a $2.6 million fourth quarter loss tied to the writeoff of $17.7 million in bad loans to Pearlman.

Apparently, those unpaid loans were just the tip of the iceberg. Florida newspapers reported that during December and January, he and staff allegedly funneled millions of dollars of assets through personal bank accounts, shredded documents and even made off with plasma TVs, office furniture and crystal vases.

Court-appointed receiver Jerry McHale was quoted saying the situation "was one of chaos as Pearlman and his employees knew that the inevitable end was near," according to the St. Petersburg Times.

Three Pearlman companies were seized in early February. But on February 27th, 10 more companies were put under McHale’s control. Among the companies now in receivership are Pearlman’s talent scouting company, record label and studios, and Louis J. Pearlman Enterprises.

Bank of America has sued to foreclose on Pearlman’s home, citing a $5.3 million debt. The mansion was also used as collateral for a $10 million loan from First International Bank & Trust of North Dakota, according to the Sentinel. So many liens have been filed that McHale asked an Orange County District Court to prevent additional filings while he sorts out the mess.

Pearlman reportedly created more than 100 companies that he ran as one giant enterprise, contravening accepted accounting practices. Investors were told their money was going into FDIC-insured accounts – instead, it was allegedly being used to run the network of companies.

The New York Post reports that even family members were not immune to what it termed a "Ponzi scheme." The tabloid reports that Pearlman third cousin Jordan Nevler, who is disabled, claims that he lost nearly $200,000 in life savings.

"I just feel so violated," Nevler’s wife Leda told the Post. "We all looked up to him, we all trusted him."

The Nevlers and "several other Pearlman cousins" are reportedly among a group of 75 investors suing in a Florida federal court.

"It shows that he would steal from anybody," lawyer James Lowy told the Post.