The Hit Charade

Lou Pearlman, Boy Bands, and the Biggest Ponzi Scheme in U.S. HistoryBy Tyler Gray

HarperCollins Publishers, Inc.

Copyright © 2008 Tyler Gray
All right reserved.
ISBN: 9780061579660

Chapter One

Trans Con

On a typically sunny Orlando afternoon in January 2006, an accountant named Paul Glover arrived at the ragtime-themed offices of Trans Continental Enterprises, a collection of travel, entertainment, restaurant, and retail operations presided over by fifty-one-year-old boy band impresario Lou Pearlman. He walked past a flowing indoor fountain beneath authentic World War I planes hanging from the ceiling and rode a glass elevator to the third floor, filed past gold records and framed accolades touting the successes of Pearlman's various pop groups, and nestled into Lou's corner office, the one with the faux-tiger rug and electric draperies that opened to a panorama of downtown Orlando—"O-Town," as Lou had rechristened it when he put it on the international entertainment map. The middle-aged mogul had burst into prominence in the '90s, back-dooring his way to the top of the pop charts with bubblegum acts Backstreet Boys and *NSYNC, followed by O-Town, LFO, Natural, Take 5, US5, Aaron Carter, and more. To frame it in the simplest present pop cultural terms: Without Lou Pearlman, there would be no Making the Band, no Lance Bass or bestselling Lance Bass book Out of Sync, no FutureSex/LoveSounds or other albums from Justin Timberlake, no Aaron or Nick Carter public train wrecks to gawk at—a horrific alternate dimension for millions of pop culture consumers. More than anything, though, he scored the soundtrack for the coming of age of an entire generation. He beat impossible odds in the entertainment business not once but twice, doing as a lone entrepreneur what entire music conglomerates couldn't. He shattered sales and revenue records with his seminal quintet, Backstreet Boys, then he trolled Central Florida's pool of Disney darlings (and scoured the back burghs and hollows of Mississippi) to do it all over again with *NSYNC. As one record executive put it, "It was like finding a needle in the haystack . . . twice." But Glover didn't come for an autograph. He was sent to save Lou from financial ruin—and maybe jail. As it turned out, the only thing more astonishing than the unlikely fame and decades-long success of the boy band Svengali was the monumental fraud that underscored it.

Born on June 19, 1954, in Flushing, Queens, Lou Pearlman grew up on the third floor of a different kind of complex, a modest elevator building in Mitchell Gardens, a brown brick, middle-class cluster of high-rises set apart from the big city by open spaces and green lawns. He was his mother's son. Reenie Pearlman had him well into her thirties, and once she brought Lou into the world, she was sure to keep him happy and well fed. His father was the late-'50s model of a working-class family provider, Ward Cleaver with a Queens accent (and a dark streak). He ran a humble custom dry-cleaning business and even taught Lou the merits of customer satisfaction—and the best places to feast on roadside meals—on dry-cleaning delivery ride-alongs, his version of quality time.

By age nine, Lou had styled himself as an entrepreneur, too, the proprietor of a lemonade stand by a neighborhood bus stop. In the years that followed he assumed the roles of hustling paper delivery boy, math nerd, "helium head" (slang for a blimp groupie), and onetime guitarist turned manager of a successful local rock band called Flyer. Music, he would frequently say, ran in his family—he's folksinger Art Garfunkel's first cousin. While other kids played stickball and chased girls, Lou retreated indoors, where he created fantasy worlds and fake businesses, usually involving rock 'n' roll or airships, and he made himself a fabulous player in them all. He studied accounting at Queens College, where he breezed through classes and formed the ideas for his first real business—a helicopter commuter service—as a final project. After graduating he started the helicopter service, then a fledgling charter airplane business, both run from his Mitchell Gardens home base. Then, as the helicopter service merged with a larger company and the airline business took off, Lou finally moved out of his parents' place and built his first blimp. In reality, he was never the sky captain he made himself out to be. In 1981, Lou's first airship crashed. In the years that followed he wrecked three more. After each, he pocketed insurance money for his next move, and his blimp company even went public, but it was his private airline company, Trans Continental Airlines, and its travel service that funded dozens of other air transport, food, and entertainment ventures in Lou's Trans Con empire.

By 1991, the boy from Flushing had outgrown Queens. He moved a ragtag but loyal cadre of workers to Orlando, Florida, where the climate was friendlier for both flying and reinventing oneself in a swashbuckling style. A malleable media came to know Lou as a jovial merchant prince who'd banked his first million by age twenty-one and his first $400 million by age twenty-four. At home in Mickey Mouse's backyard and approaching forty, Pearlman plunked down millions of dollars—or wrangled investors who helped him cover the tab—to make Backstreet Boys pop stars. When Lou did finally crack the code in the entertainment business, pop music would never be the same.

Continues...
Excerpted from The Hit Charadeby Tyler Gray Copyright © 2008 by Tyler Gray. Excerpted by permission.
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