The Boy Band Scam’ And Lou Pearlman’s Ponzi Scheme

Netflix’s Dirty Pop: The Boy Band Scam tells the mind-blowing true story of Lou Pearlman, a con artist who catapulted several major boy bands to fame in the Y2K era, only to be later convicted of orchestrating a fraudulent empire and swindling investors out of hundreds of millions of dollars.

The three-part limited series centers on Lou Pearlman, the blimp rental executive turned talent manager who created the Backstreet Boys and managed pop stars like *NSYNC, Aaron Carter, Take 5, O-Town, Brooke Hogan, and more. At the same time, he built a massive Ponzi scheme and engaged in fraudulent activities, including conspiracy and money laundering.

The docuseries explores Pearlman’s rise as a music manager and entertainment mogul before his fall from grace when his financial scheme and empire collapsed. There’s also interviews with the artists he formerly managed, including Backstreet Boys’ AJ McLean and Howie Dorough and *NSYNC’s Chris Kirkpatrick, Natural’s Michael Johnson, and Patrick King.

Uncover the details of the high-profile scandal that rocked the entertainment industry in the 1990s and 2000s, including what charges were brought against Pearlman and where the disgraced music executive is now.

Who Was Lou Pearlman?

Lou Pearlman was born and raised in New York City. Growing up, he was fascinated with blimps and aviation. In the ’70s, he founded a helicopter taxi service in New York City before moving into blimp leasing. His business, Airship International, started sourly after its only blimp crashed in New Jersey shortly after takeoff in 1980.

Five years later, in 1985, a public offering for Airship International raised $3 million in a widely suspected “pump and dump” scheme, according to Billboard. He eventually created a private air charter company, Trans Continental Airlines, which flew musicians worldwide — which is how he met New Kids on the Block. Pearlman wanted to get involved after the band’s manager told him that New Kids was grossing $100 million a year, according to Vanity Fair.

“I just didn’t know who they were and I was just questioning, ‘How could these kids afford an airplane?’” Pearlman told ABC News in 2000. “I was told these kids did $200 million in record sales and $800 million in touring and merchandising. I was like, ‘I’m in the wrong business.’”

In 1992, Pearlman officially entered the music business when he placed an advertisement in the Orlando Sentinel to create a group with a “New Kids on the Block look with a Boyz II Men Sound.” As a result, the Backstreet Boys were born.

While the boy group was not an overnight hit, he poured millions into the band as Airship International suffered significant losses, including a $2 million loss in 1992 and a $4 million loss in early 1994, according to Vanity Fair. Of its five blimps, only one was still flying in late 1994. His last blimp expired in 1995.

A much-needed breakthrough came when Backstreet Boys achieved their first big U.S. hit with 1997’s “Quit Playing Games (With My Heart), which sold 2 million copies that year. The rising music mogul decided to apply a similar formula to *NSYNC, eventually growing his fraudulent Trans Continental entertainment empire by signing acts like O-Town, LFO, Aaron Carter, Jordan Knight, Take 5, and more.

The Lawsuits Against Lou Pearlman: What Happened With His Bands?

In the 1990s, Pearlman was hit with multiple lawsuits for misrepresentation and fraud from the musical acts he managed. In 1998, the Backstreet Boys filed a lawsuit that they had only received $300,000 since 1993, while Pearlman made $10 million. Pearlman also made himself the sixth Backstreet Boys and *NSYNC member without their knowledge.

He was ousted as the manager of the Backstreet Boys and, eventually, *NSYNC when the latter also settled in 1999, giving *NSYNC members the right to control their names.

But the lawsuits didn’t stop Pearlman, because he then created a boy band called LFO, as well as bands like C- Note, Take 5, the girl group Innosense, and O-Town, who won his TV show “Making the Band,” which started on ABC in 2000 and moved to MTV in 2001.

In addition to facing legal issues with artists, Pearlman was also sued by Cheney Mason, the defense lawyer he’d hired to represent him in the Backstreet Boys and *NSYNC cases. He was ordered to pay his ex-lawyers $15 million.

What Was Lou Pearlman Accused Of And Charged With?

Pearlman was accused of using the success of his boy bands to lure private investors (which included artists, friends, and business partners) to invest in his other businesses, which he claimed were housed under his corporation, TransContinental. He said the empire included an airline, a film and music studio, talent, travel agencies, restaurants, and real estate.

According to ABC News, he also launched an investment scheme for investors, an “FDIC-insured” savings program with Trans Continental Airlines Inc. and Trans Continental Airlines Travel Services Inc., which didn’t exist in real life.

“One of the first things they do is, ‘Welcome to TransCon. Here’s our card. Here’s all the companies we own,’ and you’re looking at this card that folds, a business card that folds with like 40, 50 companies that he owns,” said Jacob Underwood, a member of O-Town, to ABC News. “Right away, you’re like, ‘Whoa, I mean, I am in with somebody really important, and this is a big deal. If he owns all these things, then he must really understand business and get it.’”

Investigators unraveled Pearlman’s long-running Ponzi scheme in 2006 and discovered that he had defrauded investors of at least $300 million. In 2007, he was charged with conspiracy, money laundering, and making false claims in a bankruptcy. Pearlman was convicted and sentenced to 25 years in federal prison.

Where Is Lou Pearlman Now?

Lonou Pearlman died in federal prison in 2016 at the age of 62. He suffered a stroke in 2010 that deteriorated his health. Pearlman’s cause of death was an infection following surgery to get a heart valve replaced, the Miami-Dade Medical Examiner reported at the time.

“I hope he found some peace,” Justin Timberlake wrote on X (formerly Twitter) after learning of his former manager’s death. “God bless and RIP, Lou Pearlman.”

Fellow *NSYNC members Chris Kirkpatrick and Lance Bass also commented on Pearlman’s death on social media at the time.

“Mixed emotions right now, but RIP Lou Pearlman,” Kirkpatrick wrote. “Word is that #LouPearlman has passed away,” Bass tweeted. “He might not have been a stand up businessman, but I wouldn’t be doing what I love today wout his influence. RIP Lou.”

As of 2024, more than $400 million in Pearlman’s Ponzi scheme remains unrecovered, according to Netflix.

Watch the official trailer for Dirty Pop: The Boy Band Scam.