I guess I am naïve. My thinking is that if you make it big – that is, by doing something famous that makes you a lot of money – you must have it made. Apparently, that is not always the case.
Take boy band impresario Lou Pearlman for example. He was the mastermind behind two bands I abhorred in the 90s – Backstreet Boys and ‘N Sync. Just like the New Kids on the Block before them, these bands were targeted primarily at young girls, but both managed to have many hits on the charts and many of the former members have gone on to have solo careers (Justin Timberlake anyone?).
You would think after having founded those successful groups, Pearlman would just sit back and enjoy his spoils. But it appears he was too busy defrauding people. Pearlman had to declare bankruptcy and this week, his assets – including gold records and a key to the city of Orlando, Florida – were sold at an auction. He had to declare bankruptcy to pay his creditors. Pearlman supposedly defrauded over 1,000 investors with a phony savings account plan. How much did he swindle out of people? An estimated $315 million dollars was lost in the scheme. He needed that money to cover losses in other businesses. In addition to the $315 million he owes the investors, he also owes $120 million to banks. Ouch! If that weren’t bad enough, he is under investigation by the FBI, the IRS, and state authorities. It is not sounding good for Mr. Pearlman, who has been missing for months.
But, collectors were able to benefit from his losses. It wasn’t the young girl crowd you might have expected at the auction, but actually older middle-aged men. The gold records started with bids of $80, while a five piece Chihuly glass art series was priced at $18,000. A wall hanging that commemorated the 7 million records sold by the Backstreet Boys went for $2,200. Pearlman’s Orlando home is on the selling block too – for $8.5 million. And what about that key to the city? The key was sold for $1,400 after a starting bid of $300.