Posted March 10, 200817 yr http://ephemerist.files.wordpress.com/2007/10/lou-perlman.jpg Lou Pearlman -- Svengali Behind 'NSYNC, Backstreet Boys -- Pleads Guilty, Faces Up To 25 Years In Prison Boy-band mastermind agrees to help recover some of the $300 million he took from investors. The man who liked his boy-band protégés to call him "Big Poppa" is headed to the big house. Former 'NSYNC and Backstreet Boys Svengali Lou Pearlman agreed on Monday to a deal in which he changed his plea in a massive financial fraud case from not guilty to guilty and agreed to work with prosecutors to help recover some of the hundreds of millions of dollars he is accused of fraudulently obtaining from banks and investors. The Orlando Sentinel reported that Pearlman could face up to 25 years in prison and $1 million in fines in the case. After attorneys notified the judge in the case that Pearlman wanted to change his plea to guilty, on Monday prosecutors filed a new 28-page criminal indictment claiming that over the past 18 years, Pearlman issued worthless stock, used a fake accounting firm and made up overseas financiers to defraud investors and banks out of more than $300 million, the Sentinel reported. "Mr. Pearlman is going to enter a plea," one of his court-appointed lawyers, Fletcher Peacock, said Monday, according to the paper. "It's the first step in taking responsibility for what has happened." Defense attorneys and prosecutors have reportedly been in secret talks for the past few months on the plea deal, the details of which were finalized last week. The man known for helping to birth the late 1990s boy-band craze left the country in January 2007, as creditors and financial investigators were closing in on his collapsing Trans Continental business empire. Most of the corporate assets of his dozens of shell companies have been auctioned off in bankruptcy court over the past year (see "'NSYNC, Backstreet Boys Relics To Be Sold In Lou Pearlman Auction"). Pearlman was arrested by the FBI in Indonesia in June and thrown out of the country, after which he was arrested by U.S. authorities in Guam and sent to jail in Orlando, where he has been held without bail since July 10. Pearlman, 53, has agreed to help the government and the court-appointed trustee in his pending bankruptcy cases by helping them to recover assets and make reparations to the investors he deceived. Authorities could seize any of Pearlman's assets tied to his fraudulent investments. The Sentinel reported that the charges brought by authorities on Monday trace a criminal path back to 1989 that includes a classic Ponzi scheme in which investors were sold worthless stock and retirement-account investments in companies that didn't exist. The early investors were paid off with proceeds brought in by later investors, but, like all Ponzi schemes, eventually the shell game collapsed and most, if not all of the investors were left with no payout. In Pearlman's case, a number of those nearly 1,300 investors were elderly victims on fixed incomes who lost some or all of their retirement savings St. Petersburg Times reporter Helen Huntley told MTV News last summer, before Pearlman's capture. Prosecutors allege in the new documents that Pearlman has sold worthless stock in two companies under his Trans Continental umbrella since 1989 and used the made-up accounting firm of "Cohen & Siegel" to file phony financial documents and tax returns with investors and banks to get loans. More than $200 million were raised by the fraud from the 1,300 investors by Pearlman and unnamed associates, in addition to another $100 million in loans that Pearlman is alleged to have illegally obtained by filing false tax returns and overstating his personal and corporate assets. Edited March 10, 200817 yr by Dinno
