Former boy-band svengali/current guest of the federal pokey Lou Pearlman has been ordered to repay some $300 million to the investors who he bilked over years of real-estate fraud and Ponzi-like scheming. How did Pearlman amass these ill-gotten gains? Glad you asked! “The FBI and FDIC determined Pearlman took $195 million from more than 1,000 people in an alleged savings program promising 6 percent to 10 percent returns, and $126.7 million in bogus loans from federally insured banks. Another $70 million was invested by people who thought they were buying shares in companies owned by Pearlman that mostly had no assets. About $95 million was returned to investors over the years, documents show.” Well, you’d think that he’d at least be given some points for trying, there. Instead, he may have to pay back even more money!
But Pearlman’s restitution could go up. Sharpe delayed judgment on prosecutors’ request to tack on $124 million in interest payments to victims, saying he wanted to see Pearlman return some of the principal first.
“If they had not provided their money to Mr. Pearlman, they would have received interest or some return on their investment,” Assistant U.S. Attorney Roger Handberg argued in court.
Pearlman’s attorney, former public defender Fletcher Peacock, said adding interest would only dissuade Pearlman from repaying any of his debt. Peacock also said it was unfair because the money was never invested.
“This is not a case of where Mr. Pearlman accrued an amount of interest and objected to giving that back to people,” Peacock said. “This interest was fictional.”
In non-fictional news, Pearlman’s future gig in the pen will only garner him an hourly wage somewhere between 12 cents and $1.15. Which means that his loyalists are currently scurrying around Florida’s finer resale shops, searching for errant LFO gold records to scrounge up at least a little more cash than what he’d make in a day.