… He said, ‘Hi Jean, I just want to tell you that everything's going great.’ I’m like ‘What is going on?’… I said, ‘I want to get some money out of my account. All the money was co-mingled- and it was used however it would benefit him,” Handberg told "20/20."īut Jean Madigan, an investor in TransContinental, remembers what happened when she tried to withdraw money from her account with Pearlman. If he had a problem where he had to pay a bank some money, he would use the investor money. So if he had bank fraud money that he needed to use to pay off an investor, he would do that. “And what he would do is he would use the money to plug whatever hole that he needed to plug. Meanwhile, according to Roger Handberg, a federal prosecutor in central Florida, Pearlman had been taking out enormous bank loans – some 30 of them totaling $190 million. I'm not giving you my money,’” Wright said.
“He said, ‘Johnny, I'm a loyal person to Lou but I also like you… if you ask me the right question, I won't lie to you.’ And I said to him, ‘I don't need to hear anything else. Wright said at one point, he spoke to one of Pearlman’s assistants when he considered investing. “It's all real to some extent because Backstreet Boys and *NSYNC are successful. … It's the greatest picture in the world,” Wright said of Pearlman. NSYNC members perform during a concert at the Rose Bowl in Los Angeles, June 9, 2000. Then when you walk through the door, he's on the phone with Barry Gordy or whoever. Then when you landed in Orlando, he would send his private limo to get you,” Former Backstreet Boys manager Johnny Wright told “20/20.” “You drive to his office, which was quite impressive. “He would send private jet to pick you up. Retired FBI Agent Scott Skinner told “20/20,” “Anytime we see the representation coming from one of Lou's companies that the FDIC, or AIG or Lloyd's of London was insuring it, we knew right then it was a fraud.” He also claimed the plan was FDIC insured and backed by insurance companies AIG and Lloyd’s of London. Pearlman promised investors it was a safe and secure investment, and offered substantial returns year after year. Pearlman launched an investment scheme for investors he called an “employee investment savings account.” Forensic accountant Jerry McHale told ABC News,“He also set up a network of sales people to sell these products.” He even formed a record company under the umbrella during *NSYNC’s rise.
He claimed his TransContinental empire included an airline, a film and music studio, talent and travel agencies as well as restaurants and real estate. Pearlman used the high profile success of his boy bands to lure investors, many of them retirees, to put their hard earned money into his other businesses, which he said were all housed within his corporation named TransContinental. TransCon investors lured in by bands’ success Additionally, Pearlman managed Aaron Carter, Nick Carter’s younger brother. He wanted to get involved in girl groups as well, and created Innosense, a group that Britney Spears briefly joined before going solo. He started LFO, whose 1999 single “Summer Girls” peaked at No. However, as Lance Bass told ABC News, while *NSYNC was achieving massive success, he and his band mates were provided just $35 a day, and that was for their per diem. Justin Timberlake, Chris Kirkpatrick, JC Chasez, Joey Fatone and Lance Bass made up the group - launching a legendary rivalry between the two bands. While the band rose to fame, Pearlman used many of the same methods to develop *NSYNC. 15, 1998, file photo, Backstreet Boys are shown performing in Chicago.
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