*NSYNC and Backstreet Boys Manager Lou Pearlman Ran 1 of America’s Biggest Ponzi Schemes

The Backstreet Boys and *NSYNC dominated the late ‘90s and early 2000s, with young fans all over the world declaring their loyalty to one or the other (but rarely both). They were competitors, but both were cobbled together from boys and men between the ages of 13 and 21 by a man who had no business doing such a thing. 

Lou Pearlman was a professional fraudster who excelled at getting rich by any means necessary. He'd fly fake blimps, run an imaginary airline and happily drain the bank accounts of regular people if it would make him a buck or two. But unlike his blimps and planes, Pearlman's boy bands were real, even if he was grossly underpaying the performers and working them to the bone. 

While the stars he created struggled to reconcile the man they knew as "Big Poppa" with the terrible things he had done, Pearlman died in prison, leaving behind a twisted, complicated legacy. 

In the documentary The Boy Band Con: The Lou Pearlman Story, produced by *NSYNC member Lance Bass, Pearlman's childhood friend, Alan Gross, spoke about seeing the Goodyear blimp for the first time from his bedroom window and developing a lifelong love of aviation. 

Pearlman would later claim that story as his own as he rose up in the blimp industry on the heels of a company, Airship Enterprises Ltd., that he started; Gross joined as its public relations manager. But after one of Pearlman’s blimps, which was supposed to circle over a Jordache Jeans promotional party, was forced to crash land less than a mile into its journey due to engineering, Gross claimed Pearlman knew it was extremely faulty. After Pearlman then claimed millions in insurance for the crash, Gross felt betrayed. Pearlman continued on, scoring deals with brands like McDonald's and SeaWorld and eventually taking the company public. 

The blimps kept crashing as Pearlman kept collecting more money, but eventually the company crashed, too. 

After Airship's demise in the 1990s, Pearlman founded Trans Continental Airlines, a company that actually did not own any airplanes. Gross explained in the documentary Dirty Pop: The Boy Band Scam that Pearlman made it look like he owned airplanes by taking creative photos of Gross's miniature plane models. He would then lease planes by the hour in order to lease them at a higher price to his customers. 

Investors ate it up and continued investing in Pearlman's imaginary company based on the promise of a high yield, which they would only get if Pearlman could attract even more investors. 

When he realized that the members of New Kids on the Block could easily afford to charter private planes, he saw an opportunity for a new revenue stream, and Trans Continental also became a music management company.  

Pearlman put out casting calls and held auditions in Kissimmee, Fla., and by April 1993, he had five Backstreet Boys: Nick Carter (13), AJ McLean (15), Brian Littrell (18), Howie Dorough (20), and Kevin Richardson (21). Carter was so young that Littrell was made his legal guardian as they travelled the world. 

On paper, Pearlman made himself the sixth member of the band, so he made an equal share of whatever the boys earned. 

As The Backstreet Boys took off in 1995, Pearlman decided he'd create his own competition before someone else could: *NSYNC. Chris Kirkpatrick was the first recruit, soon joined by Joey Fatone, Justin Timberlake, JC Chasez and Lance Bass.

"With the success of The Backstreet Boys, as *NSYNC, we always felt like the red-headed stepchild," Bass says in The Boy Band Con. "We couldn't even go into the record label because the employees there didn't know we existed. And Lou did not want them to know about us just yet because he didn't want to upset The Backstreet Boys… It was weird." 

According to Bass, *NSYNC was given a code name in Trans Continental's records and known as "B-5." 

*NSYNC didn't hit it big until 1998 after the Backstreet Boys had to turn down a Disney concert special. *NSYNC immediately took their place, and the performance turned them into an overnight sensation. 

The Backstreet Boys and *NSYNC were at odds, even as they struggled with the same problems. 

"Backstreet Boys were not happy with *NSYNC," said Donna Wright, former manager of The Backstreet Boys, in The Boy Band Con. "And they weren't happy with [Lou] because he would put another band together to compete with them.

Bass remembered Pearlman egging on the competition, saying, "Can you believe the Backstreet Boys? Can you believe what they're doing now? This is ridiculous!" 

"And then he'd go to them and be like, 'Can you believe what the NSYNC boys are doing?'" Bass continued. 

Finally, the two groups played each other in a charity basketball game, and a post-game trip to McDonald's caused them all to realize Pearlman was paying them pennies compared to what they were bringing in.

Lawsuits started flying, with Pearlman fighting back against the band members as they tried to free themselves from his contracts. Pearlman lost his claims that the band names and branding belonged to him, and both *NSYNC and the Backstreet Boys were allowed to go on without him. At the same time, other young singers were still knowingly signing contracts with Pearlman, deciding that a bad recording contract was better than no contract at all.

His other musical projects included LFO, Innosense, Take Five and Aaron Carter, among many others. 

Throughout the boy band lawsuits, it became clear that Pearlman's riches were not coming from his music groups; he was investing so much money into them that the return wasn't impressive. All his money was coming from a full-blown Ponzi scheme. 

He convinced dozens of people—employees, friends, friends of friends, anyone he could find—to invest in the Trans Continental Savings Program, promising huge returns. People believed it was a great place to put their entire life's savings, their retirement funds, their inheritances, but they were investing in lies. As stated earlier, his airline had no airplanes. He also falsified bank documents and certifications, defrauding over $1 billion over more than 20 years. 

Pearlman went on the run from the FBI in January 2007 but was caught in Bali, Indonesia, that June. In 2008, Pearlman was sentenced to 25 years in prison, but he only served eight of those years: He died in 2016 due to heart problems at the age of 62. 

No legal action was ever taken against Pearlman for sexual assault, but a 2007 Vanity Fair exposé revealed allegations that he had taken some of his relationships too far. While leading teens through the early years of fame and fortune, some said he would show them pornographic movies, or jump into their beds, naked, to wrestle. Another allegation was that boys were leaving his bedroom late at night, buttoning their pants.

While some deny that anything like that ever happened, others have told disturbing stories of cameras filming nude teens using Pearlman's tanning bed, or of foreign executives offering fame and fortune in exchange for sexual favors. 

Steve Mooney, who worked as Pearlman's assistant and lived with him for two years, said some guys would make jokes about Pearlman's requests. "I would absolutely say the guy was a sexual predator," Mooney said. "All the talent knew what Lou's game was. If they say no, they're lying to you." 

Nick Carter was 13 when he started working with Pearlman, and there was a time where he suddenly stopped wanting to visit Pearlman's house, though it wasn't clear exactly what had made him uncomfortable.

Pearlman's 2016 death was not exactly the ideal ending to his story, and Bass shared his conflicted feelings in a 2019 episode of 20/20. 

"When I heard that Lou Pearlman had passed away, I was so confused on exactly how to feel," he said, per USA Today. "I was like, ‘How could you die right now when we don't have this closure? You need to apologize! Like, there are so many people who are waiting for you to realize what you did.' And it pissed me off that he passed away.

"You feel happy that no one else is going to be affected by him, and then you feel guilty because you feel that way. You loved him, you hated him, there are so many things that come out with Lou Pearlman."