Pearlman Investors Get Checks

Victims of former boy-band impresario Lou Pearlman, now serving a 25-year sentence in a Florida jail for defrauding hundreds of investors in a Ponzi scheme, will soon begin getting some of their money back.

Photo: AP Photo / The Orlando Sentinel
Lou Pearlman takes a perp walk in July 2007.

They won’t get much, though. The Orlando Sentinel reports that the hundreds of investors duped for some $260 million by Pearlman will split about $10.4 million, which pencils out to roughly 4 cents on the dollar, after the lawyers and courts get their cut.

Pearlman was sentenced in 2008 for engineering a decades-long scam that bilked thousands of investors out of their life savings.

It was the maximum sentence the boy-band mogul could receive for allegedly swindling nearly $300 million from investors and banks since the early 1980s.

Investor Seland Williams told the paper he expects to get a check for about $400 after losing nearly $190,000 in the scam.

“I’ll still end up even more in the hole because I had to pay a lawyer a couple thousand dollars to represent us,” he told the Sentinel. “We never expected to get anything from it anyway, even back when we came over there to the court. I had pretty much given up on it.”

Pearlman’s musical claim to fame was masterminding boy bands like ‘NSync and Backstreet Boys from his Orlando base.

But he was forced into bankruptcy in 2007 and convicted of fraud the following year. Six of his associates are also serving time in the scam. Bankruptcy trustee Soneet Kapila reportedly recovered more than $36 million from Pearlman’s bank accounts, by auctioning homes and memorabilia, and settling numerous lawsuits against banks and other companies that did business with Pearlman.

Of those, eight against major banks including Bank of America, Wells Fargo and SunTrust, are ongoing, with another dozen settlements pending.