 Lou Pearlman: Sentenced to 25 years of imprisonment
Boy band mogul Lou Pearlman, who created the Backstreet Boys and 'N Sync, has been sentenced to 25 years of imprisonment on Wednesday for scheming a decade-long scam that has cheated thousands of investors out of their life savings.
The U.S. District Judge G. Kendall Sharp has given Lou Pearlman a chance to cut his prison time by offering a one-month respite for every $1 million in cash to help a bankruptcy trustee otherwise he can cancel his entire 25 years sentence by repaying the $300 million debt.
His lawyer, Fletcher Peacock, said in a written plea that 25 years amounted to a "sentence to death in prison" for the 53-year-old impresario who lived a jet-set life of mansions and luxury cars before the fraud scheme collapsed.
In an audacious two-decade scam, Pearlman admitted in his plea agreement of enticing individuals and banks to invest millions of dollars in two companies which existed only on paper. The companies are Transcontinental Airlines Travel Services Inc and Transcontinental Airlines Inc.
Lou Pearlman has convinced investors and won their confidence with fake financial statements created by a fictitious accounting firm.
While sentencing, the District Judge G. Kendall Sharp held up a book with letters from Lou Pearlman's victims, saying they included "his family, his close friends and people in their 70s and 80s who have lost their life savings".
The judge said, "So the sympathy factor doesn't run high with the court".
Pearlman pleaded guilty in March in several charges like, two of conspiracy involving bank and investor fraud, one of money laundering and one of making false claims in a bankruptcy.
The judge scheduled a hearing for the third week in July to determine the exact amount of restitution owed to victims, which is still being calculated.
Sharp said that he was concerned about small investors like Juanita Reynolds of St. Petersburg Beach, Florida, who cried while telling of her nearly 90-year-old husband's reaction to the swindle.
Investor James Taylor said that when Lou Pearlman comes out of prison, "he should be turned over to us".
In court documents, he argued that he was developing US 5 at the time of his arrest and said that the bankruptcy trustee for his companies agreed he had potential to earn "significant profits" on the band that could be used to pay restitution.
Trustee Soneet Kapila said that he had hired a music business consultant to help him evaluate the US 5 prospects and that he would be meeting with Lou Pearlman to hear "whatever ideas he may have to utilize."
Kapila said, "I think the only fair thing to say is we need to explore that potential". |
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