True Crime with Kendall Rae - How Music Industry Snake Lou Pearlman Conned *NSYNC and the Backstreet Boys

Episode Date: December 27, 2022

Lou Perlman was a successful record producer in the 90s, but much of his success was gained in an underhanded way that took advantage of his clients, both monetarily and personally. Shop my charity merch! https://milehighermerch.com/  All profits from this charity merch will be donated to the National Center for Missing and Exploited Children, and my company is matching all donations up to $50,000 from now until the end of the year: https://give.missingkids.org/campaign... Check out Kendall's other podcasts: The Sesh & Mile Higher Follow Kendall! YouTube Twitter Instagram Facebook Mile Higher Zoo REQUESTS: General case suggestion form: https://bit.ly/32kwPly Form for people directly related/ close to the victim: https://bit.ly/3KqMZLj Discord: https://discord.com/invite/an4stY9BCN CONTACT: For Business Inquiries - [e-mail]

You will fail. So what? Everybody does. But your gym, your watch, your yoga pants, they pretend you won't. So when you miss a day, eat the pancakes. Give up on a workout. You failed? Seriously, what the hell?

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will. But we're not going to let that be the end. You see that? We're already making progress. So let's keep going. We are Body. Start your free trial at Body.com. That's B-O-D-I-D-C-O-D-I-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D-C-O-D- Hello everyone and welcome back to my channel. Today's video I think is going to be very interesting. It's a story that I personally found fascinating when I heard about it because I had no idea that this happened. Of course, there will be some of you out there who already know about this, but I feel the majority of you have never heard of this. So I am a 90s baby. I was born in 1993, and I grew up listening to Backstreet Boys in Sink, Britney Spears,

you know, during that whole era. I have to say though, when it comes down to InSink vs Backstreet Boys, I definitely was more of a Backstreet Boys girl myself. But of course, I had no idea what was going on behind the scenes for these guys at this time. And a lot of people don't know about this story. I mean we all know that there are tons of frauds, tons of snakes in Hollywood. That's why I personally like to work with Canadians. And of course most of you have heard of InSync and the Backstreet Boys, but how many of you have heard of Lou Perlman, who tried to make himself the sixth member of both groups. This is truly a wild story, and it has so many moving parts, and I think based on how

instrumental these boy bands were for so many of us, it makes the story that much more interesting. So let's just start with Lou Perlman. Louis J. Perlman was born on June 19th, 1954 in the flushing neighborhood of Queens, New York, and was raised as an only child by his parents' high and re-need. He grew up in the Mitchell Gardens apartment complex, and Lew and his family lived on the third floor in a one-bedroom unit where his parents would actually sleep on a plow couch and would give Lew the one-bedroom in this apartment. Growing up Lew would spend hours on the floor of his bedroom, drawing and playing with board games with his best friend Alan Gross. Alan lived one floor above the promenso he and Lew were able to spend a lot of time together. And for Lou's sake, it was pretty lucky that Alan lived so close because he didn't really fit in all that well. He just didn't really click with people easily, he didn't make friends easily,

and he wasn't really into things that most kids his age were. He's also pretty shy. And so growing up, Lou would get picked on quite a bit. So Alan, who was also an only child, was really his only friend, and the two of them had actually a lot in common. And one thing that brought them together was their love for good-year blimps. Now blimps are kind of a thing of the past. I mean, how often do you see a blimp? In fact, I know there's a really small amount of blimps in the world. I want to look it up real fast. Yes, according to Google, there are only 25 blimps left in the world.

And it says the main reason for this is because the huge cost that it takes to build and run them. But anyway, Lou always loved blimps, and this is important for later on. He and Alan would love to spend time watching them take off at the flushing airport, which was practically in their backyard. And from a young age, Lou was always a big dreamer. He wanted to be successful one day. He wanted to be an entrepreneur. He would spend hours just sitting on his room floor, drawing up business plans, and this was when he was a kid. And from a very

young age, he was always looking for ways that he could make money. And as Lou got older, there was one story that he would tell pretty much everyone about how he got started in the world of entrepreneurship. Lou would tell people that it all started with his paper route that he worked for in 1969. And it was started by another kid named David Levinstein. This paper route was delivering New York Post and there were about 100 papers that they sold in a day. And at the time, if you were a paper boy, you might get lucky and make a few tips, but you'd only really maybe bring home an extra 15 bucks a week. And for most kids at the time, this was actually quite a bit of money.

And, you know, any kid would really be happy with it, but it was not enough for Lou. He always wanted more. So, according to Lou, his friend David decided he wanted to get out of the paper biz. And he offered to sell Lou his paper out for 500 bucks. And this was an opportunity he could not pass up. And being the entrepreneur that he was at such a young age, he decided to not only buy David's paper out, but a whole bunch of paper routes. And of course, he needs more guys to help deliver all these papers. So he hires a whole new team to do all these different paper routes, which sounds pretty complicated for a young kid, right? But Lou was very proud of this and said, you know,

this is how I always knew I was going to make it big one day. And it didn't stop there. Lou decided that he wanted to kind of revolutionize the paper delivery business. So instead of just, you know, throwing the newspapers at the front door or at the end of the driveway, he decides to really make the customers experience special. And he takes note of where each customer wants their paper delivered. He claims, you know, he had customers that wanted it under the mat, some of them that wanted it on the lawn, some of them in the mailbox, you name it, and Luke could deliver it wherever you wanted. He said he would take notes on what each customer wanted

and then archived all that information on index cards. Pretty impressive for a kid, right? And he goes a step further and says that he partnered with Dunkin Donuts so that people could have their Sunday papers delivered with coffee and donuts if they wanted. And honestly, it seems kind of genius. But it turns out the whole story is bullshit. David never even sold his paper route to Lou. He never

even offered it to him, so he never owned multiple paper routes. And he never revolutionized the paper delivery route system. He never partnered with Duncan Donets. It was all a big lie. But this was a lie that he would tell Pretty much everyone he worked with throughout his whole career So when he got older, Lew attended school at Queens College in 1974 where he earned a degree in business Of course, and he spent his summers working for good year the company whose blimps first, you know caught his attention And his kind oflong love of aviation carried into his academic life when in one of his classes he created a business plan

for a helicopter taxi service. And it was just a dream at that point, but later on, Lou did make this a reality and would charter people to and from New York City. He really wanted to make it in the blimp industry. It was just his passion. So Lou ended up connecting with this other guy, this German blimp mogul named Theodore Wolkenkempfer. And he taught him kind of the ins and outs of the blimp world.

And he really wanted to figure out how he could make the most money possible in the blimp industry. So he took all of his new knowledge that he learned from Theodore and brought it back to his childhood friend Alan who also lived for blimps and the two of them decided to finally start their own blimp company which lew named airship enterprises limited and like Google told us earlier blimps of course cost a lot of money So Lew had to get an investor and with this investor he was able to purchase his first blimp for only $10,000, which is quite a deal. And his plan was to offer advertising

services to different businesses like they could lease out these blimps. And their first client ended up being a gene maker called Jordash. Lou had actually reached out to them himself with this idea that they could lease his blimp for an upcoming party and use it for advertising. And like I mentioned earlier, if there's one thing you need to know about Lou, it's that he was this idea that they could lease his blimp for an upcoming party and use it for advertising. And like I mentioned earlier, if there's one thing you need to know about Lou, it's that he was an incredibly good storyteller. He could sell just about anything to anyone because he was so good with his words. So he was able to sell the advertising space to Jordash. He put their logo on the blimp, all looked good.

However, the problem was he really oversold this to them. It turns out that the blimp itself was not in good condition. And this was something that he not only kept from his first client, but also from his long-term friend and business partner, Allen. This blimp was actually 15 or 16 years past new, and when it was all set and ready to take

flight in New York, it was obvious that this thing was going downhill. Literally. Unfortunately for George Ash and for Lew and Alan, the blimp went down before it even made an appearance. But it is now suspected that this entire thing was part of Lew's plan all along, that he knew it was going to crash, and this led to a lawsuit against Luz. Because it seemed that this whole plan was designed so that Luz could collect $3 million

dollars that he ensured the blimp for in the first place. And after years of battling in court, Luz ended up being granted $2.5 million dollars for the blimp. His friend Alan was pretty pissed off and suspected that this truly was lose plan from the beginning. Alan called him out for the scam and that really pissed off Lou because he said he was a genuine guy who would never do something like that and that led to the end of their friendship. So in 1985, Lou changed the name of Airship Enterprises to Airship International, rebranding it as a completely

new company. And in the mid-80s, Lue began working with a man named Jerome Rosen, who worked at a brokerage firm called Norbe Securities. Eventually Lue and Jerome began actively trading stock in airship international, driving up the stock prices, and ultimately allowing Lue to sell hundreds of thousands of shares in his company that was in reality reporting almost no Revenue net income or cash flow and this wasn't the only income that Lou was bringing in at the time He was also in the luxury jet business and would lease them out to business men and other wealthy individuals and One time Lou ends up leasing out one of these jets to the very popular boyman at the time, new kids on the block. And this really

inspired Lou and was a turning point for him because he was just amazed that these kids essentially could charter a private jet. And he figured there must be a lot of money in the boyband business. a lot of money in the boy band business. When you download the Croger app, you have easy access to savings every day. Shop weekly sales and get personalized coupons to get the most value out of every trip every time, whether you shop in-store or online. Download the Croger app now to save big.

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to pursue the commercial opportunities of his blimp business. And it was going pretty well. Lou was able to secure some of the biggest brands in the country at the time, SeaWorld, MetLife, and McDonald's, and all of them were using his blimp to advertise their brands. And it really was successful while it lasted, but eventually everything came crashing down, literally crashing down. The whole business ended up tanking after several more blimps crashed,

and it completely put him out of business. But this was really just a starting point for Lou. He wasn't worried about his future at all. He knew he was gonna find a way to make it big. And it was around this time in his life that he sort of had an epiphany. He thought back to meeting new kids on the block and thinking about how successful they were and realized, hmm, maybe I'm in the wrong business. So of course, Lou decides that

he wants to make his own boy band and cash in on this whole boy band world, which is really blowing up at this time. So he wants to create something that essentially mimics what new kids on the block was doing. He even decided to hire their manager, a guy named Johnny Wright. And he started a whole new company. It was called Transcontinental Records, which would be one of a few businesses under the Transcontinental Parent Company. He started off with a $3 million dollar talent search, and this is how he found five boys who would end up becoming the backstreet boys. One of them, Ajay McLean, said that he learned about this opportunity in a classified paper called the Blue Sheets. He saw the auditions being held by Lou and thought, why not? And he got the gig right away.

Then Lou found and signed Howie DeRoe and Nick Carter not too long after. Kevin Richardson was working at Disney when Luz Limbo Driver recruited him into the band, and their final member, Brian LeTrell, actually came in because he was related to Kevin and had the same musical talents. So when all five of them came together and sang for the first time, everyone in the room was just amazed. They sounded so good, they harmonized really well and just seemed to click with each other and that's when they knew they had something big and the backstreet boys were born. And from the beginning, Lou was telling them that they were going to be

huge. You know, bigger than new kids on the block, that their life was about to change forever. From the beginning of their career, Lou would always tell them that he would stop at nothing to bring them as many opportunities as possible. And right away, Lou started putting up millions of dollars in promotions for the guys of his own money, because he knew that they would be a really good investment. However, he had high expectations for them. They started rehearsing anywhere from 6 to 8 hours a day, which was a lot at their age. Of course, a successful boy band has to know how to sing and dance at the same time, which can be really hard

to maintain your breath. So they had a ton of training and how to do that. Lou and their manager, Johnny, essentially created like a boy band boot camp and the guys would just work their asses off because they loved it. I mean they really wanted to make it big and they enjoyed what they were doing. They enjoyed hanging out with each other and they knew it was going to take hard work to get to where they wanted to go. And Lew and Johnny were working tirelessly throughout this whole time as well trying to promote the band and get them to sing anytime they were given a chance. It's called the Backstreet Boys, brand new group. What is your name? I'm AJ McLean. AJ, and who are you?

Howie D. Howie? Okay, now where are you from? I'm from Lexington, Kentucky. My name is Brian Littrell. Brian, okay, and over here. I'm from Tampa, Florida, and I'm Nick Carter. Okay, and who are you? I'm Kevin Richardson.

I'm from Lexington, Kentucky. A new heart throbs, huh? What do the girls have to say about this? Well, back before they made it big, the Backstreet Boys would even go door to door at every radio station to do interviews and sing-ok-apel-a. They would just show up. They were all really putting in as much effort as they could. They were all super driven and passionate about what they were doing and the momentum was there. How old are you anyway?

I'm 16. How old are you? 19. And 21. 20? passionate about what they were doing and the momentum was there. Backstreet boys, as you guys know, was wildly successful, but they were successful from the start. They started building up a fanbase really quick and people would go nuts for them. And throughout this time, Lou was just promising them the world. And he was starting to come true. I mean, once they're seeing the fans, they saw the success. But they weren't seeing the money yet. They were just under the impression that eventually they'll make it big enough that they will get some big check. Throughout this time, Lou is really impressing them with the lifestyle that they could have too, you know. Taking them out on boats, taking them out to fancy dinners, showing them his fancy house that he had

and all of his nice toys and cars. And it really made the guys want to work harder because they wanted a piece of that. So initially everything was going really well. The guys felt like they were really on the fast-track to fame and all of their hard work was gonna pay off, but Lou was already working on another boy band, which kind of felt like a slap in the face to them, like why start something else when we've barely got going here? And of course, it was because one was just not enough for Lou.

He saw the potential with Backstreet Boys and he wanted to create something else. So in 1995, he started another town search for the next big boy band. It started with Chris Kylpatrick, who Lou saw a performing at Universal Studios in Florida, Lou told Chris that he wanted to start another band similar to the Backstreet Boys, and that he could be a part of it if he helped him find the other talent. And he did. Chris ended up finding Lou D. Big One, Justin Timberlake, who was working in the Mickey Mouse Clubhouse at that time. Come into my game and move me pretty fast, though.

All I know is that you want mine. I mean, no me either, no me until the end of time. Of course, he signed Justin right away. He was blown away by his vocal talent, his dancing skills, and just his overall presence. And Justin ended up bringing in his fellow Mickey Mouse Clubhouse member, JC Chazes. And at first they kind of played around with the idea of it just being the three of them. However, eventually they found Joey Fattone. And he already knew both Chris and JC, and they were you know, friendly with each other. So they knew that he would be the perfect addition to the band.

But boy bands traditionally always have three members or five members never four. So they had to find someone else. And that's when they found Jason Galasso. And so, in sync was born. And I actually didn't know this, but their name actually comes from the last letter of each of their names. Justin, Chris, Joey, Jason, and J.C. However, it ended up not working out with Jason, so a different member was brought in, Lance Bass. And he really completed

and made in sync, and they felt like they had something really good going forward that could compete with Backstreet Boys. And just like Backstreet Boys, and Sink had to go through the same kind of boy band boot camp. They would spend hours and hours rehearsingstreet Boys, and Sink had to go through the same kind of boy band boot camp. They would spend hours and hours rehearsing every single day and working their asses off to become the next big boy band. And Lou would come across as kind of this father figure to all of them and definitely the cool manager. He would always be showing off with all of his stuff, like I said taking them out on boats, taking them to dinners, and eventually he decided that he wanted to buy them a house to all live

in. And he asked all the guys in both bands eventually to quit their jobs and put their full focus into their entertainment career. And with this very successful man, telling them that they can just quit their jobs and how they're gonna make it really big and make a ton of money, they all believed that and thought that the lifestyle Lou was living and showing them was gonna be a lifestyle that they would all live. Now Lou's house was really, really nice. It was kind of like a Disneyland to all the guys. He had boats, waverunners, a pool, a movie theater, and so much more.

And he was definitely not afraid to show off what he had. And he would really let the guys treat his house like it was their own. He would allow them to throw big, like, boy band parties, and they were pretty insane for a bunch of young guys. From the beginning, all the guys would describe Blue as a big hit. Like, he was part of the band himself. He was known to be fun, always laughing, cracking jokes, and he loved charming the guys with expensive gifts and fancy dinners. And like I said, to most of them, he was really a father figure to them.

And he would make an effort to ask them questions and really get to know them personally and kind of what was happening in their lives. He would try really hard to make them feel very comfortable with him and hurt. Eventually the guys even started calling him big papa because he really did fit this role in a lot of their lives. And when he was around, he would take care of everything. The guys felt like they really never had to worry about anything and they fully trusted Lou. And of course, he was spending a lot of time trying to get to know them

personally and get close to them, but he was also working insanely hard to build up their professional careers. So the Backstreet Boys first official US album was released in 1996, and their fan base went crazy. This was definitely the start of their, you know, nationwide celebrity status. And around this time, MTV started TRL, Total Request Live, and this only catapulted the guys even further in their careers. The Backstreet Boys started selling out shows and making the top charts faster than anyone else, which of course made Lou a very happy man. He was just thrilled that, you know, this band that he created, his whole idea was really taking off.

It was working. And not only did he have one band that was probably going to be really successful, he had two. Whether you're doing a dance to your favorite artist in the office parking lot, or being guided into Warrior I in the break room before your shift, whether you're running on your Peloton tread at your mom's house while she watches the baby, or counting your breaths on the subway. Peloton is for all of us,

wherever we are whenever we need it. Download the free Peloton app today. Peloton app available through free tier, or page description starting at 12.99 per month. But from the beginning, Lou started really pitting the guys against each other. I mean, like I mentioned earlier, Backstreet was not too happy when Insync was started, because they were like, you know, now one of our biggest competitors is also signed by our manager. But lose a whole explanation was someone is going to recreate what we've created. We might as well be the

ones to do it and have double the success. And you guys can kind of like work off of each other's success. But he really started a lot of the tension between Backstreet and in sync, which they actually did have a feud for years. I mean, I always remember reading things like that and I think it was called like M magazine and just, you know, assuming that they didn't like each other because they're two boy bands. But they actually didn't. They really didn't like each other so much to the point where Lance Bass said if they were ever in the same room together, he would like hide from them. And Lou really did everything in his power to keep them away from each other as much as possible. So when he would take them out to these lavish dinners, which he would take their whole families to, I mean, these big dinners.

And they would always go to these exclusive fancy restaurants that normally you can't even get into, but Lou always had the hook up. But he would never take in Stank and Backstreet out together. You know, he'd made a real effort to put a wedge between him because it drove them into competition mode. It made them work harder to be better than each other. And the members of in Sank actually always felt

like they were kind of the underdog because they came in second. And they actually said they felt like they were being treated quote like the red headed step children of the family. It was clear them that Backstreet Boys who were definitely more established and more successful at this point were lose number one priority. Backstreet was really starting to rise up in the charts, was really building a fan base, but Insync at this time was still kind of in the shadows, still really forming their group.

And when Insync was first getting going, Lou actually completely kept its secret from the Backstreet Boys. And even told Insync that, that he didn't want to upset the Backstreet Boys, he didn't want to hurt their feelings, so he had to keep them a secret. And Insync really had a slower start than Backstreet boys. He didn't want to hurt their feelings, so he had to keep them a secret. And NSYNC really had a slower start than Backstreet. They just didn't take off right away

the same way. But NSYNC really got their big break when the Backstreet boys turned down an opportunity and they took it, which I had never known about this, but it's very interesting. The Backstreet boys had an opportunity to perform on a Disney show, and they were just kind of run ragged during this time, and they were just too tired. So they turned down the opportunity, and Lou, of course, was like, well, I've got someone to fill the slot, and in sync took it, and this was a huge break for them. They basically blew up overnight, because so many people had tuned in to see the Backstreet Boys and saw this other band who was kind of a different flavor of Backstreet Boys and

people were into it. And they went from selling a few thousand records a week, which was impressive for them, but they went to selling almost 60,000 a week overnight. And the Disney Channel aired that performance almost every day for a week, which only grew their audience bigger and bigger. And of course, the Backstreet Boys were pissed and really regretting not doing that Disney show. They instantly saw each other as competition. This is when Backstreet actually first found out about Insync and that Lou was the one who put them together, which definitely felt like a slap in the face.

And this was really lose plan all along. Create the competition. This was only going to drive them to work harder, be better, and it worked because in sync was always talking shit about the backshort boys, backshort boys were always talking shit about in sync, and they felt threatened by each other which definitely made them work harder for that top spot who was gonna be the best boy band. It's all about the serifide guys and work-five guys and work-from-orlando you know and it's really you know hard to get out of their shadow because they were first and they were pioneers but you know they're off being successful as

the back of the boys and we're're often successful and think it's flattering on the same turn as it is, you know it's like well I can't somebody dispute their own things. It's more frustrating on the creative side like who you choose to write music with. Who you choose to work with and produce. Who you choose your record. Who you choose to direct to your videos. I mean, it's like, find your own identity. And not only were the bands pitted against one another, but bands were too.

It definitely became like a backstreet boys versus and sink thing. Like whose side are you on? Which one do you like better? When I was younger, I kind of remember feeling like you can't really like both of them. You really have to which one do you like better? When I was younger, I kind of remember feeling like you can't really like both of them. You really have to pick one that you like better and I was always on team back street.

But this really served up the drama. I mean, the public ate this shit up and I'm sure you're probably wondering, where is the scam here? Where is the fraud? I mean, this seems to be going pretty well for them other than the fact they have a competitor and they're kind of pitted against each other but whatever I mean it's kind of good

for business right so why are we talking about Lou Perlman? Well at this point even though both bands are seeing success none of them had been paid a dime. Even though the bands were starting to make millions of dollars in record sales and ticket sales and merch sales. The boys were actually only being given $35 per day, just like daily expenses, food and whatever, but a lot of the times Louis was taking them out anyway. And so to them, this felt like a pretty good deal. They felt like it was a lot of money, especially because they had no idea how much they were

actually making. They thought this was just a bonus that the real money would be coming in soon. And both bands were extremely successful. They were both selling out venues and working every single day of the week. So they knew they had to be making a lot of money. So finally, Lou tells them that they are gonna get

their big checks and he takes them all out to dinner for the occasion. And they're all super pumped ready to see how much they actually have made so far. All the guys and their families were flown out to LA to go to Lowry's, which was one of Lou's favorite restaurants. It's a very expensive and exclusive restaurant that the boys would be taking to all the time by Lou, so they were used to it. And like I said, they had no idea how much the checks would actually be for, but they figured it had to be for quite a lot, because they hadn't been paid anything really so far,

and they knew that they had been so successful and they kind of had an idea of how much they had been making, although their guess was a lot lower than they actually were making. There's a YouTube originals on this. In the documentary, Lance Bass's mom was talking about how she kinda did the math in her head, trying to figure out how much they probably were gonna make. She figured that, you know,

since they had sold over 10 million records that she estimated there would be about a million dollars to be split between the five guys, meaning that they would probably walk away with about 200,000 each so far. And this just blew her away. I mean, her young son is going to be making this much money. This is a big deal. So they're all at dinner and Lou passes out their checks and they all open them and suddenly it goes silent. And some of the guys look like they're going to straight up just throw up. It turns out that Lou had only given them $10,000 each.

After all that time, working their asses off, selling out multiple venues, they each made 10 grand. And Lance Bass said it was right at that moment that he realized something's wrong with Lou. He's been lying to us. This does not add up. There is no way we should have only made $10,000 after all the money that we are making this man. And that's when they started to realize that their contracts were an absolute mess. And it turns out that none of

the guys really looked at their contracts much. They just signed them because they trusted Lou so much and they were working so hard at the time, just spending so many hours practicing choreography, trying to write new songs, or working with the people who were writing their songs really. And they just said they didn't have time to look over their contracts. And this was a big mistake. Getting only $10,000 each just made no sense. I mean, 50,000 each for each band was an adding up. Where was this money going? Who was being paid? And why weren't the actual members of the band

seeing the real money here? I mean, they're the talent. They're the ones working so hard. And it all seems to be going back to Lou. So they brought their contracts to J.C.'s uncle who was a lawyer. And when he looked at it, he was pretty shocked. It turns out that, like I said earlier,

Lou actually made himself the sixth member of both bands. He was the official sixth member of INSync. Which meant what? Which meant that whatever I made, he would make. And then on top of that, 20% and then on top of that, the record label commission. He was triple dipping for sure, which as a 16 year old,

he don't understand what that even mean. He made a lot of us. And it turns out he had actually talked to the guys about this very briefly without really explaining what that meant. He convinced them that being the sixth member was actually the way to go. And he would save them money in the six member was actually the way to go.

And he would save them money in the end because, you know, they wouldn't have to pay for the cost of managers and that the record label fees would come out of his pocket because he would be one of them. He totally pitched it like he was going to be helping them out by doing it this way that he was doing them a favor. And when they started showing that they were upset, he explained that they were in tons of debt and it would actually be years before they saw any large sums of money. DQ presents

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So what could this debt be from? Turns out the entire time that the boys were working 24-7, Lou was using their money behind their backs to put up all the costs of the band. Of course, the money has to come from put up all the costs of the band. Of course, the money has to come from somewhere, but the issue is that the boys were never told that it was coming out of their pockets, even all of those fancy dinners that they were thanking Lou for.

They were actually the ones paying for it. The house that they were staying in, all of their stuff, all the choreographers, all of, you know, the promotional efforts, everything was coming out of their pockets, which was just never explained to them clearly. They went from thinking that Lou was this extremely generous man to thinking he was an incredibly greedy man. And a lot of people, including pretty much all the guys from both bands, believe that him making himself the sixth member kind of sneakily like that, is kind of a way to make him feel like he was part of something. I mean, Lou really

never felt part of anything in his life and he had this strong desire to fit in. So being part of the band was appealing to him, but once both bands caught wind that Lou was totally screwing them over and pretty much stealing from them, they got pissed. And it was right around the same time that both bands put the pieces together and realized that Lou had been playing them. And essentially stealing from them and lying to both of them. And they kind of start cross-referencing with each other and realize that this was happening to both of them. And this is actually what brought Backstreet and sink together. They had to figure out a way to get out of this or get Lou to change his terms. And as soon as both of them started pushing back,

you know, friendly Papaloo turned into this cold, mean, and kind of distant, scary guy to them. All the attention and kind of love that he had been giving all of them just went away. He no longer cared about them or what they wanted, so they all decided to hire lawyers and find a way out. And in Sinks lawyer actually found a tiny loophole which ended up being a huge saving grace for them. In their contracts, it stated that Lou would need to find them

an American record label within a certain amount of time of them starting. And it turns out that he did find them a record label, but it was a German record label. So they mentioned this to Lou and said, you know, we want out of our contracts because of this. And that's when Lou got really mad. And in October of 1999, he sued the members of Insync

for $150 million in addition to the name Insync, because he said that he wasn't Sync. And of course, Lou believed that what he was doing was not wrong, even though he had been misleading all these young men for years. Insync decided that they wanted to keep their name, which Lou did not want them to do. And they wanted to move to a new record label called Jive.

So they went to court. And during this trial, Jive records even put out a statement saying that trans-continental's conduct was the most glaring overt and callous example of artist exploitation that the music industry has seen in a long time. And after, you know, arguing for a while

back and forth in court, the final decision came down to the judge. Lou Perlman was trying to argue that he was in sync, that he owned the name, that he was a sixth member. And the judge actually said to him, you know, my kid's a big fan of in sync, my daughter. And I don't see you on the posters on her wall.

You know, that's these five guys, not you. I don't think you are in sync. And so the judge ended up siding with them, and the boys were let out of their contract. And they were lucky. Like this could have gone a lot worse. Now for the backstreet boys, they had to do things a little differently. Their lawsuit was drafted in 1989 under the claim that they had only made $300,000 collectively all five of them while Liu had made over $10 million.

I mean, not adding up real well there. But of course Liu argued that he had spent millions of dollars up front to launch their careers, making him entitled to all of that money. But again, he lost. Everyone could see right through what Lou was doing, and he ended up losing both bands. And this ended up being a huge loss for Lou, because as we all know, in sync and back shoot boys ended up going on to be way more successful than they were in 1998. So he decided that he wanted to try again, find another group of guys that could be just as successful as they were in 1998. So he decided that he wanted to try again, find another group of guys that could be just

as successful as they were. By 2000, he was already starting a handful of other bands, including a band called Take Five, C-note, and one called Innocence, which I'm sure a lot of you haven't heard of those bands. They were much smaller than in Sink and Backstreet Boys, of course, but by the time he really got them going, the hype around boy bands was kind of starting to settle.

So Lou needed to figure out how to stay relevant during these changing times. And with the rise of reality television, he was able to do just that. Lou was actually the one who started the show making the band, which I loved back then. Lou Pearlman, the mastermind behind such bands as LFO in sync in the backstreet boys, is looking for five talented young men to form a new band.

Never known, you don't know unless you try. You know what? You know what? You know what? You shot and it's band school. You won't get it if you don't audition. Kai just danced, totally, totally turned around. Just two days, he went from not milling to step to learning something.

This is very interesting. Trevor, definitely his dancing just exploded today. And it just came out of his cocoons, so that was very nice. And people, you know, in the industry, especially where aware that Lou had been wrapped up in these major lawsuits within Sink and Backstreet Boys, and that he had lost both of them. But sadly, he really didn't lose that much other than all the money, but he still held an insane amount of power

in respect in the industry. I mean, yes, he had definitely been known at this point for his grade, but this was Hollywood, and no one really cared. It seemed like nobody else had really the power to give people the type of fame that Lou was capable of getting people So many people still continued signing with Lou and transcontinental records Even when they would bring their contracts to lawyers and it would straight up tell them this is career suicide If you sign this and they would sign it anyway because they didn't know when they would get another big break because they didn't know when they would get another big break. Whether you're doing a dance to your favorite artist in the office parking lot, or being guided into Warrior I in the break room before your shift,

whether you're running on your Peloton tread at your mom's house while she watches the baby, or counting your breaths on the subway. Peloton is for all of us, wherever we are, or counting your breaths on the subway. We are inhaling and long exhale. Peloton is for all of us, wherever we are, whenever we need it. Download the free Peloton app today. Peloton app available through free tier, or pay subscription starting at 12.99 per month. And there's one other huge element to this story that really makes all of this so much

worse. Lou was definitely inappropriate and creepy with these guys. People around him just started noticing that he was spending an unhealthy amount of time and attention on these young men. My cronin who had worked for transcontinental records basically had to pull each one of them aside and let them know about the rumors surrounding lose interest in boys. It wasn't anything super explicit that we know of unless people haven't come forward, but it was really just lose creepy and inappropriate behavior that seemed to just be getting worse.

Even back when he was working with Insync and Backstreet Boys and, you know, going forward with all his new bands, one of the things he would always do is obsess over the guy's physique. And he would constantly ask them to take their shirts off and he would have them pose for him and tell them that they needed to be more muscle pumped and like critique their bodies.

And he would just act like he just needed to see them partially undressed so that he could ensure that they looked good enough for magazine covers and, you know, performances. But eventually they all started feeling like he just wanted to see them with their shirts off. And it got even worse than that. He started telling the guys that he had minored in physical therapy in college, and that he could give them a special massage

that would make it look like their muscles had a pump before they would perform or take pictures or anything like that. And this is something that multiple guys who worked with Lou experienced. And then there was one time that was extremely upsetting. I definitely want to warn you before we move forward. This could be triggering to some. One of the bands that Lou worked with was LFO and I also really liked them when I was growing up. Although they were definitely

not as big as Backstreet and Sink. They're kind of short-lived but they had some good songs. But anyway, he told them that he had this huge opportunity for them to play in Europe. He sold them this idea that this would be kind of a make or break for their careers. But there was an extremely disturbing catch to this whole opportunity. According to Liu, this guy over in Europe wanted all of them

to come and touch his private part in order to actually get the deal. And to Lou, this was fine. He thought it was worth it. He tried to convince the guys that this is, you know, for your careers. And Lou actually had the nerve to tell the guys of LFO that he was worried they were going to blow the deal. So he told them that they could practice on him.

I know, disgusting. It's not even clear whether this person in Europe actually was requesting these things or if Lou just made it up to get the guys to touch him, which they didn't as far as I know. Again, there aren't any direct allegations from any of them as far as sexual assault. I mean, we all know that it is common for victims to stay quiet out of fear. So who knows what kinds of things happened?

Most of the guys from NSYNC and Backstreet Boys have all stated that nothing like that had ever happened to them. And like I said, there's no other statements from anyone else that I know of or could find, but it's just, it's really hard with Hollywood. There's so many men out there that you just, yeah, you just don't know what they will make people do in order to get opportunities.

And to make all of it even more creepy, Lou had a fucking tanning bed in his house that he would have the members of the boy bands and the girl bands use. And it turns out he had cameras watching them. At one point, he even offered to show some of the guys' footage of the girls naked getting into the tanning beds. And Aaron Carter, he was in the YouTube Originals, which interestingly enough, he really defends Lou

like a lot, a lot, and gets emotional about people making accusations about him. But anyway, he talks about how he and his mom use the tanning bed, but he claims that his mom checked for cameras and that he thinks it's all a lie. But in fact, there were cameras like all over his house and he was watching all the members of all his different bands.

Remember how he said he would try to make everyone feel like his house was their house and they could feel comfortable there? Well, I think there were reasons behind doing that. And what's so creepy about all this is his control panel for all of these cameras was actually in his room. So he was the only person who could access all this footage or watch them live.

So by 2003, Lou had expanded transcontinental records beyond the music industry. One of his businesses he bought was called Options Talent Agency. But when he purchased it, it was already under investigation for fraud in the state of Florida, which is fitting for lieu, of course. Options talent was actually posing as a modeling agency, but in reality, they were deceiving thousands of people. What they would do is hire people to go up to strangers in public, mostly at shopping malls,

and they would tell them that they'd set them up with a photographer because they're so good looking and take a ton of photos and they would be submitted to their agency and maybe they'd be able to make it big as a model But it turns out these photographers would actually charge people insane amounts of money And then they normally would just never hear back from them So Jacqueline Dowd, who was the assistant attorney general and bureau chief of the economic crimes unit in Florida Was put on the case to investigate and at the time that Jacqueline was on the case

She learned about lose close connection to Charlie Christ. Florida's attorney general. Now Charlie is definitely a shady character. And of course, Lou was a financial supporter of his campaign, and so not surprisingly, Charlie was not interested in pursuing an investigation against someone who had helped keep him in office. Quite convenient, but Jacqueline continued her investigation, and she was even invited to the Options Talent Office for a tour.

Eventually, she was dismissed from the case, of course, because it had become clear to her that Lou had purchased his way out of the investigation and used his connection to Charlie Christ to do just that. And it turns out, Options Talent was not the only other shady business venture that Lou was involved in. In fact, this was just a small piece of a much larger con.

Over the years, Lou had found dozens of ways to bring himself more money. He was obsessed with making money. That's all his life became about. While still managing transcontinental records, Lou had other companies called transcontinental airlines managing transcontinental records, Lou had other companies called Transcontinental Airlines and Transcontinental International. And for years, Lou had commenced hundreds of individuals, mostly elderly couples to invest in his airline company. Turns out that through Transcontinental

Airlines, Lou was selling stock options and retirement accounts and using his status as a music mogul to gain trust with different investors. He actually called the investments that they made employee investment savings accounts. He would really impress investors telling them that he had his own airline company, his own film, and music studio, talent and travel agencies, restaurants and real estate all connected to the transcontinental empire. And investors were actually told that they would have access to all of these things including the boy bands themselves. And this is really wild. But one of the ways that he was able to convince people of his airline

legitimacy was by using these little small model airplanes and holding them at the tail and taking a picture of it at an angle that would make it look like they were actually in the sky an actual full-size plane when he didn't actually have these planes. It turns out he literally stole these model airplanes from his friend Alan, childhood friend Alan, who he had the blimp company with for a minute, and he actually brought the model over to LaGuardia airport to take these photos and he would try to impress investors with them. You can see in all these photos that the tail of the plane is just missing and that's literally because his fingers were there holding them up.

And looking back, all of the members of these different bands noticed that even though he had transcontinental airline, they had never flown on it. Doesn't really add up. So this was a complete fraud. And this went on for years. Money from investors for his airline company was coming in left and right.

But eventually in 2006, the investors started catching on when they realized they were never seeing any money in return. Imagine that. Investors started calling him, trying to get answers, and eventually the phones for his company were just disconnected. So finally, in 2006, all the pieces of the puzzle

started coming together. It became clear that none of these investments were real, that transcontinental airlines literally was not real, and shit really hit the fan when Lou was sued by his own lawyers for $16.5 million. And this is because he had gone behind their backs to collect money during the lawsuits he faced against the backstreet boys.

And in this particular lawsuit, the judge had cited against Liu and ruled that he pays 16.5 million, but that money never came through. He allegedly set up a wire transfer from a bank in Munich where he claimed he had this sort of money, but of course, that was a lie too. In fact, the bank account that he said the money was coming from didn't even exist. That's right.

Turns out, Liu was actually borrowing money from banks all across the country and using money from bogus investments and money made off the bands to pay off the debts that he owed. And this cycle just repeated itself again and again. So eventually authorities caught wind of this and started looking into Liu themselves. And that's when they realized that Liu had actually swindled dozens of banks and investors out of 300 million dollars. Nice. Approximately 200 million had come from investors and the other 100 million had come from 11 separate banks. Lou had hired fake accountants, had created fake accounting firms,

to convince the banks that his profits were real. And he even signed some contracts using the name of a dead man. Lew was actually promising 6-10% in returns for those who invested in his made-up company. And in reality, he was really using the money that people invested to pay off his earlier investors. So, it was essentially a Ponzi scheme. After authorities looked more into him, they found over 20 years of fraudulent activity.

But unfortunately for them, before they were really able to make their move, Lou caught wind of what was happening. They ended up doing a search of his property and offices and realized that he had taken all his stuff and ran. So an international manhunt began, and the FBI started receiving tips from people all over the world. Sightings of Lou would come in, but quickly be ruled out, and they had a really hard time finding him.

One journalist named Helen Huntley had taken a particular interest in the story and created a blog where she kept track of all things Lou Pearlman. And in 2007, one of her readers emailed her from Bali, saying that he and his wife had actually spotted Lou while on their vacation. And investigators actually thought that it was Lou, emailing them trying to get them off his tail and kind of divert them. And they even responded, saying, if you see Lou, let him know that he's not in trouble. We just want to talk to him, which was not true. They were trying to arrest

him. And then on June 14th, 2007, FBI agents ended up in Bali to follow up on that lead. And before they started their search for Lou, they decided to get some breakfast. So they went to a local restaurant in Bali. And it turns out Lou just happened to be at the same restaurant having breakfast that morning as well. So it was very convenient for them. And what's so funny about all this is the guy who had been reporting to them that Lou was in Bali had been really frustrated that they weren't taking it seriously and that it was taking the FBI so long to get to Bali. So he actually took a picture of Liu at the restaurant that morning, and you can see FBI agents literally in the background of the photo.

At this point, agents were able to arrest Liu who didn't really put up a fight. So when he got back, Liu's sendencing took place in the largest courtroom called the ceremonial courtroom, because more than 200 people showed up to witness what Lou was in for. And in the end, he would end up pleading guilty to two different conspiracies, one of which was related to investment fraud, conspiracy to commit male fraud and wire fraud, and the second was conspiracy related to bank fraud. Lou also pleaded guilty to money laundering and bankruptcy fraud, and judge Kendall Sharp, who is a senior US district judge, sent in slew to a maximum of 25 years in prison, which is the most time given to any fraud case to date.

In the end, slew didn't have any money. He had nothing to pay people back with. His life had completely fallen apart. All of his dreams of being this successful entrepreneur were gone and all because of him. And this is hilarious. He ended up telling court officials that if they gave him access to a cell phone in a laptop, he could create a new band while in prison and start paying people back that way. And even though he pleaded guilty because lawyers told him it was in his best interest, Lou never thought that he was guilty. He actually had many

different ideas of businesses that he could run from prison, but he never got the chance. Because Liu actually ended up dying of cardiac arrest on August 19th, 2016, while he was in jail. And it seems like pretty much all of the members of all the bands that he created were kind of just relieved when he was gone. Some of them felt like he got off easy in a way created were kind of just relieved when he was gone. Some of them felt like he got off easy in a way and felt kind of resentful, but most of them just felt relief that he was gone. Except for Aaron Carter, he gets extremely emotional about his death. Obviously, most of the bands that Lou created didn't really have a lot of success,

but Backstreet and Sink definitely went on to have really successful careers. Most of the guys are still doing things to this day or have made pretty much. Here's a fun fact that I found very interesting. It turns out in Sink's most, I'm pretty sure this is the most famous song of all time. Bye bye bye. That is about Lou Pearlman and breaking free from him. In fact, their whole album was inspired by their experience with Lou. No strings attached as in they're not attached to Lou anymore. And they came up with the idea just in a taxi cab

right after all of this had happened. That is going to be it for me today, guys. Thank you for joining me for another episode. And make sure you follow the show on Spotify and Apple Podcasts. It really does help me out. If you want to watch the video version of this show, you can find it on my YouTube channel, which will be linked, or you can just search Kendall Ray. I will be back with another episode soon, but until then, stay safe out there. Whether you're doing a dance to your favorite artist in the office parking lot, or being guided into Warrior I in the break room before your shift, whether you're running on your Peloton tread at your mom's house while she watches the baby, or counting your breaths

on the subway. We are inhaling and long exhale. Peloton is for all of us. Wherever we are, whenever we need it, download the free Peloton app today. Peloton app available through free tier or pay to description starting at 12.99 per month.