A U.S. District judge on Wednesday sentenced boy band mogul Lou Pearlman, who introduced the world to The Backstreet Boys and N' Sync, to 25 years in prison for defrauding investors and several banks out of more than $300 million.
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As part of his plea agreement, the former promoter admitted defrauding creditors through a shell company, Trans Continental Airlines Inc., by presenting fake financial statements created by a phony accounting firm. As part of the sentencing, Judge G. Kendall Sharp said Pearlman can cut down his prison term by one month for every $1 million in cash he can raise to help the trustee overseeing Trans Continental's bankruptcy recover on behalf of Pearlman's creditors.
Four banks -- Tatonka Capital Corp., Integra Bank NA, American Bank of St. Paul and First National Bank & Trust Co. of Williston -- involuntarily placed Trans Continental into bankruptcy on March 1, 2007. They alleged that Pearlman orchestrated the biggest Ponzi scheme in Florida's history and then fled the country. - John Blakeley
For more about Trans Continental Airlines' case, see Bankruptcy Insider
