Lou Pearlman faces new federal charges

You might remember the name Lou Pearlman because he was a former boy-band promoter but now federal prosecutors say that Pearlman sold worthless stock, used a bogus accounting firm, and bilked investors banks out of more than $300 million.

Pearlman is accused of selling worthless stock, used a bogus accounting firm, fictitious overseas financiers and even the signature of a dead corporate officer to bilk investors and banks out of more than $300 million. Charges were filed against Pearlman last year and in a 28-page criminal complaint prosecutors detailed 18 years of lies, misrepresentations and frauds to investors, banks and federal and state regulators. On Monday the new charges were filed after U.S. District Judge G. Kendall Sharp was informed by attorneys that Pearlman wanted to change his not-guilty plea to guilty. According to one of Pearlman's court appointed lawyers the plea is the first step in taking responsibility for what has happened. A plea deal was finalized last week after months of secret discussions between attorneys and prosecutors. Pearlman has been held without bail since July 10 and he decided he was going to change his plea because he thought it was the right thing to do. Pearlman has also agreed to assist the government and the court-appointed trustee in his pending bankruptcy cases in recovering assets and making reparations. Pearlman faces hefty fines of $1 million and up to 25 years in prison and that is in addition to assets being seized by the government that is related to any fraudulent proceeds. The charges outlined several criminal plans which included a 1989 scheme to sell worthless stock and retirement-account investments through Trans Con Airlines Inc. and Transcontinental Airlines Travel Services Inc. Pearlman also defrauded many banks out of millions of dollars by submitting false tax returns overstating his personal and corporate finances. Pearlman fled the country in January 2007 after creditors and regulatory agencies were closing in on his crumbling empire. FBI agents later tracked him down at a hotel in Bali, Indonesia and he was later expelled from the country and arrested by U.S. authorities in Guam and than returned to Orlando in July. Pearlman is best known for promoting boy bands Nsync and Backstreet boys in the 1990s.