…And Justice After All?

Orlando Tribune Lou Pearlman 1 2007 Gavin P Smith

Pearlman Pinched – Florida Return Eminent


Orlando Tribune Lou Pearlman 1 2007 Gavin P SmithORANGE COUNTY – The hottest question in Central Florida on everyone’s lips, at least up until now, has been “where in the world is Lou Pearlman?” 

That question was finally answered last week.  Pearlman, who skipped town ahead of federal indictments, was kicked out of Bali, Indonesia and handed over to the Federal Bureau of Investigation for extradition back to U.S. territory.   

How was Pearlman nabbed?  A German tourist tipped off the FBI after spotting him at the Westin Resort in Nusa Dua, Bali.  With an interesting choice of fake name, Pearlman lodged their under the name “A. Incognito Johnson”, according to court testimony.  Indonesian police picked him up, interviewed him, studied FBI information on him, and decided to deport him into U.S. custody in Guam. 

I can confirm that Mr. Pearlman is in Guam and has made an appearance there,” said Supervisory Deputy Marshal Eric Thompson. 

From an emotional standpoint, this is probably good news to many who were taken for a ride in Lou Pearlman’s various schemes.  However, from a financial standpoint, it may not be a good enough answer to all of their lost monetary investments.   

Pearlman was considered a hero music mogul and benefactor to the city of Orlando for the past 20 years.  He is most famous for creating boy bands such as N’Sync & the Backstreet Boys, though he was also involved in airplane charters, talent scouting, restaurants and other businesses, including his contribution to the downtown landscape, investing in and revitalizing Church Street Station.  Pearlman set up a variety of “investments” that looked good at first glance, most notably Trans Continental.  As a result, almost 2,000 individuals hopped on board, some pouring their entire life savings into the scheme.

Pearlman lost control of several companies in February when a state judge appointed a receiver to take over the books while investigations moved forward. Soon, Pearlman was hit with a variety of fraud charges.  Banks are after Pearlman and his companies, seeking more than $120 million.  The total loss to all involved is estimated at around a half billion dollars. Now, all of the victims involved are looking to Pearlman for answers.However, prepare to pay for those answers. 

Lou Pearlman has been given the right to a court-appointed attorney to handle his case.  As if to add insult to injury, Pearlman is using taxpayer money to defend himself.  That means me, you, and everyone else reading this story, including those approximately 2,000 investors who lost everything, all have to ante up our tax dollars now for Pearlman’s defense.  Ironic, isn’t it?

Orlando Tribune Lou Pearlman 2 2007 Gavin P SmithIn his brief court appearance in Guam, Pearlman filed for a court-appointed attorney.  To get one, U.S. District Court Chief Judge Frances M. Tydingco-Gatewood initially wanted Pearlman to disclose his personal financial information to find out whether this was necessary.  Pearlman refused as he did not want that information used against him in the pending fraud cases.  It was finally agreed for the judge to view them in private, and resulted in his approval of Pearlman’s request.  Prosecutors argued the request, saying that Pearlman “should not be allowed to shield information about his assets from the Court.” Whether or not the documents were sealed from the upcoming criminal case is not known.

All of Pearlman’s companies remain in receivership while the mess is being sorted out. Pearlman faces multiple charges, including bankruptcy fraud, bank fraud, insurance fraud, tax evasion, securities fraud, wire and mail fraud, money laundering and racketeering.

As earlier reported, Pearlman withdrew a $200 million dividend out of his companies for himself in late 2006.  When he was picked up, he was reported as having $20,000US in cash and another $4,500 in Indian currency.  Where is the rest of it?  The dividend money would go a long way to paying back those investors, and would certainly be more than enough to cover Pearlman’s defense.  But no mention has been made regarding the missing money. 

What’s next for Pearlman?  The U.S. Attorney’s Office will not say.  When contacting them, they only confirmed that Pearlman was in custody.

“He is in the custody of the U.S. Marshals Service and I have no information on when he will arrive in Orlando”, said Steve Cole, U.S. Attorney’s Office. 

However, Supervisory Deputy U.S. Marshal Thompson was a bit more helpful.  “We expect him here sometime in the next two to three weeks,” said Thompson.  “He will be transported from Guam to Los Angeles by commercial liner, then on to Florida via our Justice Prisoner Air Carrier service, or JPAC.” 

Once Pearlman lands in Florida at an undisclosed time and place, he has a cell waiting.  “We’ll put him in either the Seminole or Orange County jail facility when he arrives,” said Thompson.  “The next day, he’ll come into Federal District Court for his initial visit.  Bail, bond arrangements or other options could be brought up at that time, but that is yet to be known.”