Jim Carroll

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Pearlman goes pop

Without Lou Pearlman, there would be no Louis Walsh or Simon Cowell. Pearlman was the boy band mogul who created the Backstreet Boys and ‘N Sync and crafted a template for how to make money out of intricately hair-gelled male …

Wed, Apr 11, 2007, 09:35

   

Without Lou Pearlman, there would be no Louis Walsh or Simon Cowell. Pearlman was the boy band mogul who created the Backstreet Boys and ‘N Sync and crafted a template for how to make money out of intricately hair-gelled male muppets.

Now, though, it seems that Pearlman is in a spot of serious bother. USA Today’s story says that Florida’s Office of Financial Regulation are keen to have a chat with him, but Pearlman seems to have disappeared.

They believe that Pearlman, 52, created a scheme that milked about $317 million from more than 1,400 individual investors and an additional $150 million from banks.

It appears that Pearlman persuaded individuals and banks to invest in what he billed as a secure, interest-bearing savings fund. But when this cash didn’t go into profit-making ventures, Florida’s financial regulators stepped in.

“We did bank analyses for a three-year period and confirmed that $150 million went somewhere other than where it should have gone,” says Bob Rosenau, chief of financial investigations for Florida’s Office of Financial Regulation.

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