From jail, Florida’s ex-music kingpin boasts of his Ponzi scheme
The entertainment industry brings with it many issues and concerns. This could lead to serious situations, especially if there is an issue of fraud or deceit between clients, managers and investors. The individuals affected might have a cause of action in these events.
As long as there has been an entertainment industry, there have been stories of sleazy deals, but the story of Florida music impresario Lou Pearlman is in a league of its own. The former chief of Trans Continental Records and the man who gave the world the Backstreet Boys, N’Sync and other boy band stars of the 1990s, is now serving a 25-year jail sentence for defrauding investors of up to $500 million.
In a recent jailhouse interview, Pearlman bragged that his Ponzi scheme was better than that of Wall Street investor Bernie Madoff because Pearlman’s was built on music that had value in itself. Pearlman has been ordered to pay back $300 million to his investors.
In addition to criminal charges, Pearlman has been named as a defendant in numerous lawsuits. Almost every band he managed has sued Pearlman, accusing him of fraud. According to the Hollywood Reporter, all of these cases were either settled out of court or won by the plaintiffs.
Still, Pearlman told the Hollywood Reporter he wants to get back in the business. He has formally requested permission to be allowed to organize new bands while he remains in prison. A judge denied that request.
It must be remembered that there are many honorable businesspeople in the entertainment business. Pearlman’s story is extremely unusual. However, Pearlman’s story can serve as a reminder that is important to have experienced legal help when negotiating contracts in Florida’s entertainment industry.
When disputes turn into litigation, it can be very important to have help and guidance from those who understand the ins and outs of entertainment law and the entertainment business. Gaining advice can also help individuals take appropriate action while also preserving their rights and interests.
Source: The Hollywood Reporter, “Boy Band Mogul Lou Pearlman’s Prison Interview: My Ponzi Scheme Was Smarter Than Madoff’s,” Seth Abramovitch, Jan. 22, 2014