N*Sync's Secret Sixth Member: The Boy Band Pyramid Scheme with Good Children Podcast | 77

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Speaker 1 I've got a tough question for you. Which group do you stand harder, the Backstreet Boys or InSync?

Speaker 1 You know, they were the biggest boy bands of the 90s, but did you know that the same guy was responsible for creating both groups? And did you know that he also wound up in jail?

Speaker 1 Well, today on the big flop, we're talking about Lou Perlman, the boy band mogul who lost everything because he made some exceptionally shady business deals and made a lot of people's money go a bye-bye bye.

Speaker 1 Lou Perlman created the Backstreet Boys and in Sync and he cashed in big on their fame at their expense.

Speaker 3 I was in the biggest band in the world and selling millions of records and someone's making millions of millions, but I can't even afford my apartment in Orlando.

Speaker 2 Boy band promoter turned federal prisoner.

Speaker 1 Lou Perlman sentenced today for defrauding banks banks and investors out of as much as $300 million.

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Speaker 1 From Wondery and At Will Media, this is The Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time.

Speaker 1 I'm your host, Nisha Brown, social media superstar, and starting a petition to get together, back together at Don't Cross a Gay Man.

Speaker 1 And on our show today, we have the co-hosts of the podcast, Good Children. We'll see how good they really are.
It's Joe Hedges and Andrew Muscarella. Welcome to the show.

Speaker 2 Thank you for having us. Yeah, we're an honor.
So excited. True.

Speaker 1 So so excited okay so before we get into the disaster that is lou what's your history with boy bands

Speaker 2 besides like gay awakenings yeah i think that's that's definitely my history with them were you a big i was more of a girl group type of guy i understand that you know for me like i was at in sync concerts i was at backstreet boys concerts like i was at um what was that other one there was 98 degrees of course 98 degrees and then there was an even niche one who was singing the song about evercrambling fitch and new kids they sing i like girls that wear abercrombian

Speaker 2 chinese food makes me sick whatever whoever that was i was also standing that group i think we honestly we stand whatever our older sisters stand yeah like that's my sister was 10 years older so i was like living vicariously through her especially when it came to New Kids in the Block or 98 Degrees like their Christmas albums

Speaker 2 we were streaming and I always had a crush on I think Jay-Z

Speaker 2 Oh, my God. Oh, my God.
Jay-Z.

Speaker 2 Jay-Z.

Speaker 2 I guess also Jay-Z.

Speaker 2 Jay-Z, Jay-Z, Shazay, Shazaz.

Speaker 2 Specifically his puppet doll. If you remember those.

Speaker 1 No.

Speaker 2 They sold like the dolls of them in whatever music video that was. And my sister had them all, and I definitely got acquainted with the dolls for sure.

Speaker 2 That's kind of crazy, Joe.

Speaker 2 Okay.

Speaker 1 Well, in this episode, we are talking about Lou Perlman, the music manager who made millions as the mastermind behind the Backstreet Boys and Insync, but wound up on the run from the law without a single dollar to his name.

Speaker 2 I know. We've all been there.

Speaker 2 We have all been there. Definitely been on the way.

Speaker 2 Not having a single dollar to my name. On the run.
Yeah, I'm here.

Speaker 1 So going all the way back, Lou is born in 1954 and grows up in New York City. As a kid, there's one thing he loves more than anything else.
Aviation. Okay.
And I'm not talking about Ryan Reynolds gin.

Speaker 1 I'm talking about like anything that flies. Right.
Now, Lou particularly loves blimps.

Speaker 1 And when he's 10 in 1964, he rides his bike out to an airport where the Goodyear blimp has landed and pleads with the captain to give him a ride.

Speaker 1 But the captain, rightfully so, refuses, telling Lou that rides are only for VIPs and members of the press.

Speaker 1 So what does Lou do? He goes to his school paper, tells them he wants to write about the Goodyear blimp, and that's how he gets his blimp ride.

Speaker 2 This is a sick man already. I mean, that's just.
That's a crazy workaround. I mean, it's very you.

Speaker 2 Yeah, it's very me. Oh, that's great.
We're already comparing you to Lou Brim. That's amazing, actually.
I will say it is, if they were to tell me I'm not VIP, I would. You'd find a way to be VIP.

Speaker 2 Yeah. Yeah.

Speaker 1 She's a mover. She's a shaker.

Speaker 2 I'm not getting on a blimp. I'll tell you that.
No. End of situation.
So good for him, I guess.

Speaker 1 Clearly, from a very early age, Lou is exceptionally good at finding sneaky ways to get people to give him what he wants.

Speaker 2 Yeah.

Speaker 1 Okay, since you are Lou Perlman-coded, what's the sneakiest method you've ever used to get something you wanted?

Speaker 2 Oh, shoot. Now, this is really putting.
I think I would say maybe the podcast.

Speaker 2 I guess. I guess I just say what I speak for.

Speaker 2 I'm speaking for both of us there. I'm not just throwing you under the bus.
Thank you.

Speaker 1 Well, in the 70s, while he's still in college, Lou starts a helicopter taxi service. And eventually in 1980, Lou's able to get his very own blimp.

Speaker 2 Okay.

Speaker 1 It's saying mommy and daddy have money.

Speaker 2 Yeah, exactly. Yeah.

Speaker 1 So, but how does he do it? Well, he goes to a clothing company and convinces them to give him money to sponsor a blimp, a blimp he does not yet have.

Speaker 1 And then once he's got the sponsorship, he pays contractors to actually build his blimp.

Speaker 1 So Lou is basically making a bunch of promises to people and hoping he'll be able to find a way to keep those promises later. It's a classic con artist mentality.

Speaker 1 And though Lou gets away with it this time, as we'll see, he won't be so lucky forever.

Speaker 2 It's so scary because I'm like, that's actually genius. Like I'm like, we should start doing that more.
Conning people?

Speaker 2 I didn't, though, before the word con was brought into it, I was like, okay, like, I mean, as long as the blimp shows up, everyone's happy. Yeah, you're right.

Speaker 2 So you promise the blimp and see what happens.

Speaker 1 I tell you, the amount of flops that we've covered on here that were totally because there is some man who had a full cup of audacity in the morning and was like, I'm worth billions of dollars.

Speaker 1 And people just listen to him.

Speaker 2 It's so scary.

Speaker 1 You could make something work. You just have to be a good person after you get what you want.
Right.

Speaker 2 And that's the tough part because once you get the blimp, it goes to your head.

Speaker 2 You're flying high. It's always the blimp.
It's the blimp.

Speaker 2 He could have gone from flop to bop really quick, but like not here.

Speaker 1 Well, from there, Lou goes on to fly even higher and he founds Transcontinental Airlines, a company that charters luxury private jets for the rich and famous.

Speaker 1 And that's what gets him into the boy band business because you know what kinds of celebrities travel on private jets a lot, musicians.

Speaker 2 Wow.

Speaker 1 So Lou says that because of this private jet business, he was able to meet New Kids on the Block. And that led to his boy band light bulb moment.

Speaker 1 In the immortal words of LFO, New Kids on the Block had a bunch of hits.

Speaker 2 LFO, that was the missing link.

Speaker 2 That was it.

Speaker 1 These days, the new kids are less remembered for their hit songs and more for the fact that they basically invented the boy band formula.

Speaker 1 Get five cute white boys and put them on stage to sing and dance.

Speaker 1 But later on, Lou might call himself the boy band visionary, but he's really just following this model that has already proven to be successful. But here's how it happened.

Speaker 1 When Lou hears about New Kids on the Block, he can't believe that they have the money to charter an airplane.

Speaker 1 And he's even more surprised to find out that in 1990 alone, the new kids earned practically a billion dollars.

Speaker 2 Whoa.

Speaker 1 Surprising fact.

Speaker 2 Okay, let me clarify one thing. He took on new kids on the block, or did he see new kids on the block? And that's where he started what's happening.

Speaker 1 Yeah, he was just chartering a jet film. Okay.

Speaker 2 So new kids on the block, they kept their money. Like he, they had nothing to do with Lou Perlman.
Okay.

Speaker 1 No affiliation.

Speaker 2 Okay. Thank God.
Thank God for their block.

Speaker 1 Thank God for that block. But Lou says to himself, I'm in the wrong business.
He's had his head in the clouds while the real money is on the ground in record stores when we still had those.

Speaker 1 But in 1991, Lou moves to Orlando, which at this time is ground zero for talented teenagers because it's where Disney is filming some of their biggest new kid shows, perhaps most notably the Mickey Mouse Club, which features two kids you may have heard of named Britney Spears and Justin Timberlake.

Speaker 1 Yes, yes, yes. So Lou sends out an ad that says he's putting together a band that is looking for talent and that this is the band that will become a cappella drumroll, please,

Speaker 1 the backstreet boys wow

Speaker 2 wow wow wow wow wow we would i would see that ad oh we'd both be auditioning i mean i was listening to the ads from disney being like do you want to are you a kid and do you want to audition and i'm like yeah this is meaning

Speaker 1 yeah could have been us but thank god here's a question do you know how the backstreet boys got their name or do you have any guesses oh jesus christ um

Speaker 2 my whole body just ran cold like you just asked me like well it's like they're they're seemingly obsessed obsessed with like street, like backstreet, new kids on the block. Right.

Speaker 2 You know, and even there's a lot of blocks at the backstreet of the duke kids.

Speaker 1 Well, Lou named the band after a flea market. Backstreet flea market in Orlando.

Speaker 2 Wow. We got to get to Orlando more.
Yeah, I know. Seriously.
So far, that's not enough.

Speaker 1 Not enough people are saying that.

Speaker 1 So Lou finds the kids he's looking for and starts training them to become the perfect pop stars.

Speaker 1 He gets the budding Backstreet Boys dance lessons, singing lessons, tutors, and Lou's protégés call him Big Papa.

Speaker 2 Yeah. Oh, I hate that.
I was just thinking, even just the idea, like, how old are these kids at this point? Because they're like kids.

Speaker 1 Children. We'll see some videos in a moment.

Speaker 2 Okay.

Speaker 1 Well, by 1993, the Backstreet Boys are ready to launch. So let's take a look at a clip from a local interview that the Backstreet Boys did when they were still Backstreet babies.

Speaker 6 We have five very popular new guys here.

Speaker 6 Two of you guys are from Orlando, right?

Speaker 6 It's called the Backstreet Boys, brand new group. And which two of you are from Orlando?

Speaker 6 What is your name? I'm A.J. McLean.
A.J., and who are you?

Speaker 1 Howie Dee.

Speaker 6 Howie? Okay, now, where are you from? I'm from Lexington, Kentucky. My name is Brian Littrell.
Brian, okay. And over here? I'm from Tampa, Florida, and I'm Nick Carter.
Okay, and who are you?

Speaker 6 I'm Kevin Richardson. I'm from Lexington, Kentucky.
The new heart throbs, huh? What do the girls have to say about this?

Speaker 6 Well, they like us.

Speaker 2 They like us.

Speaker 1 They like us.

Speaker 1 How little was Nick Carter?

Speaker 2 Nick Carter. Nick Carter was a little bit

Speaker 2 a little baby. And who, what was the giant one on the end? Kevin Richardson.
Kevin's being like 6'8. He's one of my tops, I would say.

Speaker 2 Well, I...

Speaker 2 No, I'm not even going to make that joke, but

Speaker 1 we can't get into tops right now.

Speaker 2 But yeah, he was a top. Yeah.

Speaker 1 But also, how 90s was this?

Speaker 2 Oh my God, they're full-on Bobs. It's not even a middle.
Literally Bobs.

Speaker 1 Yeah, it was like the stop it Crohn's lady from the commercial. How would you rank their interview skills?

Speaker 2 I mean, for their age, you know what I mean? For infants. To be infants and to be on screen like that, I think that they were doing the best they could.
I was like getting personality, not really.

Speaker 2 Really, they're nervous. Yes.
And that's where you're kind of like, okay, we put a lot of years into dance classes. Like I'm always putting media training above it all.

Speaker 2 I want to see media training at the top of the pyramid for a group like the Backstreet Boys. And I'm sure they got it, but it wasn't really flexed in that moment.

Speaker 1 Not in that exact moment, no.

Speaker 2 But I feel nothing but sympathy and almost grief seeing those children. Like, that's actually just devastating.

Speaker 1 Yeah. It's like there should be laws put in place.

Speaker 2 There almost should be.

Speaker 2 Almost should be, yeah.

Speaker 1 Well, in 1993, Lou sets the boys up with their first public performance. I don't know if you know the lore of Backstreet Boys.
Do you know where their first performance happened to be?

Speaker 2 I wish.

Speaker 2 Orlando.

Speaker 2 Well,

Speaker 1 they perform for the first time at SeaWorld.

Speaker 2 Ah,

Speaker 2 wow. It just gets more cursed with each sentence.

Speaker 1 Well, Lou records the performance and starts sending the tape around to music industry folks to get the boys noticed. They don't blow up in the U.S.

Speaker 1 right away, but they are a a huge hit in Europe almost immediately. So they start touring overseas.

Speaker 2 Jesus Christ. No, I can't.

Speaker 2 This is like literally American horror story. It's literally

Speaker 2 worst case scenario to me. These babies touring Euro with Luke Problem.
I'm sure they were so excited. I'm sure Luke Problem was so thrilled to get on a plane.
I'm sure that was his, the highlight.

Speaker 2 I'm sorry.

Speaker 2 Has the plane chapter closed? Like, was that legit? Oh, no, it's still open. Oh, yeah.
We'll be flying that. We'll We'll be on that rack for a while.
Okay, great. Amazing.

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Speaker 1 So this whole time, throughout all the touring, Lou has been covering all the band's expenses.

Speaker 1 And while the Backstreet Boys are getting everybody in Europe to rock their bodies, Lou's also still running Transcontinental Airlines. And it's no longer just an airplane rental company.

Speaker 1 It's become the umbrella company for all of his projects. Even the Backstreet Boys are part of Transcontinental Airlines.

Speaker 2 I don't like this, man. I'm sorry.

Speaker 2 What I said earlier about you and Lou Girl. Thank you.

Speaker 2 I'm going to be so serious, Joe. Like, it's been in my mind the entire time.

Speaker 2 Every time we mention Lou's name, my stomach sinks. Yeah, yeah.

Speaker 2 That just doesn't sound right. It doesn't sound right.

Speaker 1 There are two problems with Transcontinental Airlines. One, Lou's burning through company money, spending big on meals, helicopters, private jets.

Speaker 1 The Backstreet Boys' hair gel bill alone must have been astronomical.

Speaker 2 Oh, I thought you were going to give us a real stat just now. I was, I was shaking in my

Speaker 1 spending $9,000 a month on hair gel.

Speaker 2 I wouldn't be shocked. I wouldn't be shocked.
And those customable outfits. I'm sure that wasn't cheap.

Speaker 1 Lou's businesses, they're actually not as robust as they seem. By 1995, Lou's blimp business has deflated.
He's totally out of blimps.

Speaker 2 Clock that's he's out of blimps. His blimp business is out of blimps.
Well, I feel like blimps had their day in this. They did.
You know, I'm not really seeing many blimps nowadays.

Speaker 2 I do feel like I saw a significant amount more of blimps than I was a kid. Yeah.
Yeah. So something happened.

Speaker 1 But the heart of Lou's empire is supposed to be his airline service, but it basically exists only on paper. Lou's been telling people he's got a whole fleet of jets, but in reality, he only has three.

Speaker 2 Okay.

Speaker 1 So he's just lying.

Speaker 2 Yeah. So, yeah.
And sometimes you have to do that in business. Yeah.
Well, he's been lying. He's been lying.

Speaker 1 Yeah, he's been lying ever since he was on that school paper.

Speaker 2 Yeah.

Speaker 1 But what does Lou do to keep the lights on and keep the backstreet boys on tour?

Speaker 1 Well, he hypes up his businesses even more, lies, to get investors to pump more money into them, even though he's not sure when he'll be able to get them their money back.

Speaker 1 Lou also starts selling investment savings accounts. These are supposed to be super safe and reliable, the sort of thing you invest your retirement money in.

Speaker 1 But the ones being sold by Lou are going to turn out to be anything but safe and reliable.

Speaker 2 Okay, okay.

Speaker 1 I know investment savings accounts sound super boring, but just remember them because they'll be important later on.

Speaker 2 Sure, it's giving it's giving Jen Shaw immediately to me. I just immediately am scared.

Speaker 1 Yes.

Speaker 1 But back in boy band land, Lou, he's thinking ahead. The Backstreet Boys may not have broken through in the U.S.
just yet, but they are getting bigger and bigger. And Lou, he is smart.

Speaker 1 And he's smart enough to know that eventually they'll have competition from a rival group. So what does Lou do?

Speaker 2 He makes the rival group.

Speaker 1 He decides to create the rival group himself.

Speaker 2 He's a genius.

Speaker 1 I mean, it is smart.

Speaker 2 He's a genius. He thinks to say, but he's very smart.
That's very smart.

Speaker 1 This way, it doesn't matter which boy band you prefer, Lou will be making money off of both of them. As Lou puts it, quote, where there's McDonald's, there's Burger King.

Speaker 1 And where there's Coke, there's Pepsi. And where there's Backstreet Boys, there's going to be someone else.
Someone's going to have it. Why not us?

Speaker 2 Wow. Wow.
I have chills. That was a really good quote.
We're going to have that framed in our home soon.

Speaker 1 Yeah.

Speaker 2 Where there's Burger King, where there's McDonald's, there's a Burger King.

Speaker 1 Yeah, take that live, laugh, love.

Speaker 1 And so, to compete with the Backstreet Boys, Lou puts together a little band you might have heard of called Asterik N SYNC, otherwise known as InSync. The new band debuts in 1995.
Right. Okay.

Speaker 1 Lou, however, doesn't tell the Backstreet Boys about his involvement with InSync.

Speaker 2 That's right.

Speaker 1 Big Papa's got a secret second family.

Speaker 2 Not the

Speaker 2 nasty word. That's crazy.
Yeah, that's criminal. That is criminal.
That's scary. Yeah.
They're just like, what's this new group? Who's this new group? And he's like, disappear.

Speaker 2 And they're like, where's Big Papa? Like, where is Lou? We're touring like Germany. We haven't seen Big Papa in weeks.
Where's Lou? I need hair gel. Yeah.
Shall we putone it somewhere else?

Speaker 2 It's crazy.

Speaker 1 Yeah, but good news for Lou because soon Lou's boy band plan starts paying off because both his bands make it big. In 1997, the Backstreet Boys finally have a hit in the U.S.

Speaker 1 They sell 2 million copies of their single, Quit Playing Games with My Heart.

Speaker 2 Hit clips. Hit clips.

Speaker 1 The song goes to to number two on the charts. And just a year later, Lou strikes pop gold once again when InSync explodes in popularity.

Speaker 1 Their first album is paired with a concert movie filmed at Disney World in Orlando. And after that footage airs on Disney Channel, InSync becomes a pop culture phenomenon.

Speaker 1 Sales of their album explode and it goes on to sell 10 million copies.

Speaker 2 Wow. So they in sync blew up bigger than Backstreet Boys at this time.
Oh, yeah.

Speaker 2 I would be biting at the bars of my enclosure if I was in Backstreet Boys and this was happening to me. Like, actually, I would be losing my mind.
Poor Nick Carter. Yeah.

Speaker 2 Well, for many reasons, poor Nick Carter, but that's crazy.

Speaker 1 Here's my other question: like, how impressive is it that Lou has been able to put together two bands that are sensations when he was like flying blimps?

Speaker 2 Yeah, it is kind of really like he could have, it's, it's, oh, it's the age-old thing where it's like if only these people used their power for good. Yeah, it was right.

Speaker 2 So we could have had a dozen boy bands happening at the same time and instead it was Lou Everyone saying Papo. Yes,

Speaker 2 he knew the girls were gonna they were gonna love it and

Speaker 2 us and the gay bands.

Speaker 1 Well, at this point, you might think that Lou would sit back and enjoy all the money he's making from the Backstreet Boys and in Sync and not keep trying to prop up his other basically questionable businesses.

Speaker 1 But no, Lou leverages the fame and legitimacy of the boy bands and all the cash they're pulling in to get people to keep investing in his other sketchier ventures.

Speaker 1 It's like he just can't help himself.

Speaker 1 So when it comes to getting people to give him money, Lou is truly a master of finding ways to wow investors.

Speaker 1 He has a business card that folds out to reveal dozens of different companies that he owns, like more than could possibly fit on one regular business card.

Speaker 2 That's a resume. That's a huge red flag to me immediately.
It's like, be good at one thing. Be good at like two things maximum in Sync and Backstreet Boys and Blimbs, three things.

Speaker 2 He wasn't good at blimps, though. That's it.
There are no blimps that exist.

Speaker 1 Yeah. It's like if you go to a restaurant other than the Cheesecake Factory that has too big of a menu, you're like, I don't know about this.

Speaker 2 Yeah.

Speaker 1 He also takes investors for rides on private planes and drives them in limos to recording studios. And he also, of course, gets his boy bands to perform for potential investors.

Speaker 1 And here's what's really shady. The boys have no idea that they're performing for people in business with Lou.
They just think they're his pals.

Speaker 2 I hate this, man. What?

Speaker 1 I know. Just tell them.

Speaker 2 Yeah, it seems like there's nothing that like a 16-year-old boy is really going to say or do with that information. You think it would be

Speaker 2 a pressure situation? You think that if he told them these are major investors before they went on, they wouldn't be sick to their stomach. You're trying to be, you're trying to find the good.

Speaker 2 No, I'm not trying to, you know what? I'm going to start laughing a little bit too much. I don't want to relate to Lou any more than I already have.
So I'm going to shut up.

Speaker 1 Okay, well, let's think about the other side. If you were going to be one of these big investors with Lou, like, how much are you swayed by getting to see like Backstreet Boys or Insync perform?

Speaker 2 Like, that's just like the really troubling element of all of this is why do they even even care? They're seeing the talent. They're saying, How are they going to get there? What do you mean?

Speaker 2 Because they're doing the little song and dance. They're like, this group is amazing, but we need to give money to Lou's plane.
Lose other random companies.

Speaker 1 Yeah.

Speaker 1 Just imagine the boys being like, quit playing games with my blimp.

Speaker 1 Yeah, stop playing games with that blimp. Let's let's give it money.

Speaker 2 You're going to South Korea. We're getting you there.
We're flying you there right now.

Speaker 2 Right now.

Speaker 1 Well, as we know, Lou's glitz and glam is actually just smoke and mirrors. And soon some of Lou's shady deals are going to be exposed.

Speaker 1 So how do you think people first find out about some of Lou's not so honest deals?

Speaker 2 The investors that have just been like, what's going on? Like, there's been no returns. What's happening? Like, ROI.
Where are your planes? Missing ROI.

Speaker 2 R-O-I.

Speaker 2 ROI is a really good way to put it, Joe. Yeah.
Yeah. Where are the planes?

Speaker 1 It's not actually Lou's investment deals that first get him into trouble. No, it's his deals with his boy bands.
Oh, God.

Speaker 1 So as the bands are blowing up, the members of Backstreet Boys and InSync know that they should be raking in the dough, but somehow they're barely seeing any of it.

Speaker 1 And so now they're starting to wonder, where is all this money going? So at this point, InSync is selling tens of millions of albums and generating $300 million in revenue.

Speaker 1 But the members of InSync, they don't see any of the money. They're getting just $35

Speaker 1 a day from Lou, a poultry per deal.

Speaker 2 That's the craziest number you could have said. $35 a day?

Speaker 1 $35 a day.

Speaker 2 Oh my God.

Speaker 2 Because you would see them at the time, too, and you'd be like, oh, these kids are rolling in money, millionaires.

Speaker 1 Yes. And in 1998, Lou takes all of the members of InSync out for a big celebration dinner where he says he's going to give them all checks.

Speaker 1 They think we're finally going to get a cut of all the money that we've been raking in. And they're expecting that these checks are going to have a lot of zeros at the end.

Speaker 1 How much money do you think? I don't even want to do that.

Speaker 2 I'm like so scared because you just said $35 a day. So like, I have to only like, do we think the checks were like, I would hope, no,

Speaker 2 hundred thousand dollars each that's like still low that but that sounds right they should be yeah yeah yeah that sounds like a bare minimum bare minimum

Speaker 2 100k okay don't even with me don't even the checks are for ten thousand dollars i gotta go

Speaker 1 when they've made 300 million okay

Speaker 2 So now my question, as it always does when it comes to a child start, is what's going on with the parents?

Speaker 1 Well, that's, yeah, that's, that's a really good question.

Speaker 2 What's happening here?

Speaker 1 Well, I don't know about the parents, but his other boy band, the Backstreet Boys, they aren't doing any better.

Speaker 1 Collectively, they've only made $300,000 for all of their hard work touring, recording, while Lou himself has pocketed $10 million.

Speaker 2 I want to say things that would get me on a watch list about this man at this point. Like, I have to just bite my tongue because this is evil work, evil work.

Speaker 1 I mean, we have to remember that the Backstreet Boys are on the front front lines of yeah screaming teenagers every day they literally deserve 300 grand just in hazard pay yeah truly therapy bills but this is also how the backstreet boys find out that lou was behind their rivals in sync and they're devastated this is how long was it how long did this go on it's been three years No, that's unacceptable.

Speaker 2 Well, obviously this is unacceptable, but that is truly unacceptable. It's cause for us to scream.
Yeah, that's really. that's crazy.

Speaker 1 Yeah. Can you imagine that moment of finding out that Big Papa

Speaker 2 lied to

Speaker 2 years?

Speaker 2 They're trapped there because it's like, can they really like, can they even leave these contracts? And if would they even want to, would they have success? That's their life now.

Speaker 2 You know what I'm saying?

Speaker 1 I mean, $35 a day in 1998 money was pretty good.

Speaker 2 They're like, we're eating.

Speaker 2 We're eating.

Speaker 1 So In Sync and the Backstreet Boys, they start looking into the fine print of their deals with Lou and find some seriously shady stuff.

Speaker 1 But the worst thing might be the fact that Lou wrote into the contracts that he was the sixth member of the Backstreet Boys and Insync.

Speaker 2 No one was the lawyers, nobody was reading over this contract saying, what do you mean, sixth person?

Speaker 2 He was taking advantage of kids in Florida. I'm sure their parents didn't have like extensive legal backgrounds or the funds to even get a lawyer.
Jeez. He was choosing the vulnerable.
Jeez.

Speaker 2 That's crazy.

Speaker 1 Yeah, I mean, if you're from Lexington, Kentucky, and this guy is like, hey, I'm going to make you an international sensation. You're just like signing on that dotted line.

Speaker 2 He says, look at my blimps. Just look at my blimps.

Speaker 2 Big papa's blimps. Ew.

Speaker 2 Hey, Zach.

Speaker 1 Are you smiling at my gorgeous canyon view?

Speaker 2 No, Donald.

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Speaker 1 Donald, you still haven't returned my weed whacker.

Speaker 2 Carl, don't you embarrass me like this, please. What's everyone yelling about? T-Mobile's got home internet.

Speaker 2 Yes, T-Mobile's got home internet.

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Yodeling.

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Speaker 1 Well, the Backstreet Boys, they were the first to push back against Lou and they sue him in 1998. Of course.
I mean, that's right. Backstreet is backing out of their contract with Lou.

Speaker 1 Soon after that, InSync follows suit and files a suit of their own.

Speaker 2 I wish I had like more brain cells at this time. You know, are they saying that they were like, I'd love to be paying attention? I was like three years old.
I need to know.

Speaker 1 But Lou's not letting the boys go without a fight. He hires a lawyer named Cheney Mason to defend him in his Backstreet Boys and InSync cases.

Speaker 1 Lou also makes the case for himself in the press, saying that the bands basically wouldn't ever have gotten off the ground without him and he's just trying to get the money back that he invested in them.

Speaker 1 He said, quote, I pay the bills. I gave them a house.
I paid their living expenses for vocal coaches, choreography.

Speaker 2 I think this is a classic example of like,

Speaker 2 We need more things in writing here because I actually like I would be on Lou's side if he was like, once we earn our first million like 500k that is coming out and it's going to cover what we spent on you.

Speaker 2 And then from that point forward, it's yours to figure out. Like this just seems like it's a it's a cop-out for crime and I want to lock Lou up.

Speaker 2 I want to lock up.

Speaker 2 Lock him up.

Speaker 1 Well, after a messy bunch of litigation, the Backstreet Boys and Insync make a deal to get out of their contracts with Lou.

Speaker 1 In order to sever ties with Lou, the bands wind up having to pay him around $64 million to buy out the rest of their contracts. I guess Cheney did a pretty good job as Lou's lawyer.

Speaker 2 I'm sorry. Cheney got them to have to pay $64 million when they were being paid $35.
Yeah, how did they come up with that? So, like, how did they accrue that? Grand deals. Brand deals at the time.

Speaker 2 Yeah, grand deals. Disney.

Speaker 1 But the boy bands are free.

Speaker 1 And one year later, InSync uses their newfound liberty to put out a song that actually sounds like a regular boy band love song, but that some people think is actually about everything they went through with Lou.

Speaker 1 Oh. The song is called No Strings Attached.

Speaker 2 Very puppet dolls. The puppet dolls.
It all comes back.

Speaker 2 Very sexy puppet dolls.

Speaker 1 So in the wake of losing the Backstreet Boys and InSync, Lou is

Speaker 1 actually

Speaker 1 doing pretty much completely fine. Of course.

Speaker 1 Even though everybody knows about Lou's shady shady contracts now, Lou's still got lucrative deals with bands like LFO, Aaron Carter, and a girl group he created called Innocence.

Speaker 2 Well, I wish we heard more from them. Yeah, I do.
Like Lou Aside, I wish I would be an Innocence fan.

Speaker 1 Now, Innocence is best known because Britney Spears was a member for a hot sack, but she decided to go solo instead of sticking with them. So maybe she innocensed something fishy was up.

Speaker 2 I was going to say, I feel like Brittany and Lou Perlman had some situation happening at some point. That's

Speaker 2 that girl. That poor girl.
That's crazy.

Speaker 2 So many victims in this story surrounding Lou Perlman. It's actually crazy.

Speaker 1 Well, Lou also creates a hit show making the band

Speaker 2 loved.

Speaker 1 And he uses the show to make another boy band sensation, Oh-Town.

Speaker 2 Wow.

Speaker 1 And as all this is going on, Lou's business lies, they're getting bigger and bigger. He continues to tell investors that his businesses are booming.

Speaker 1 He says he owns real estate, a movie studio, even his own airline, and investments, they keep rolling right in.

Speaker 1 But Lou's empire is about to crumble, and it all starts because of his former lawyer, Cheney Mason.

Speaker 1 Chaney is about to go from defending Lou to attacking him.

Speaker 2 Wow. Thank God for Cheney.
This is the arc I was not expecting.

Speaker 1 Can you possibly think what Cheney's beef with Lou might be?

Speaker 2 Well, did Lou ever pay Cheney for the fees?

Speaker 1 Ding, ding, ding.

Speaker 2 This man just thinks he can get away with everything. Yeah.
It's crazy.

Speaker 1 Yes, Cheney wants Lou to quit playing games with his attorney's fees. Cheney's looking to get his cut of that $64 million Lou got in the boy band settlement, but Lou doesn't want to pay up.

Speaker 1 So Cheney decides he's taking Lou to court. If you're getting sued by your own lawyer, you've really messed up.
Now, as part of this suit, Lou has to provide financial statements.

Speaker 1 He gives documents to Cheney that show he barely has any cash at all. Sorry, he just won't be able to pay.
But there's a problem.

Speaker 1 In other documents, like the ones he shows his investors, Lou's claiming that his businesses couldn't be doing better.

Speaker 1 Cheney sees this discrepancy between all these documents and he thinks something's not on a level here. Spoiler alert, he's right.
So he calls up old girl, the FBI.

Speaker 2 Oh my God.

Speaker 2 It's just, it's like, don't answer.

Speaker 2 Is there like an American Crime Story season about this? Right.

Speaker 2 It really I am. Like, it would just be a fantastic show.
I'm hooked.

Speaker 1 So here we go. Remember all those investments Lou is getting people to make in his businesses?

Speaker 1 It turns out Lou has been behind one of the biggest Ponzi schemes in the history of the United States.

Speaker 2 I love a word.

Speaker 1 All the money Lou was making from the bands, from loans, from investors, he didn't keep any of it separate.

Speaker 1 He used it to pay whatever bills he needed to pay until he could get more money from somewhere else. And remember those investments accounts.

Speaker 1 Those were totally phony. Lou lied about basically everything about them.
He lied about the accounts being fully insured and also forged all the documents related to them.

Speaker 1 He also set up a phony accounting firm called Cohen and Siegel.

Speaker 1 When Lou wanted to get a bank loan, he'd tell the bank to check with his phony accountants and they'd tell the bank what great financial shape Lou was in.

Speaker 2 And it was just Lou?

Speaker 1 Yeah, yeah. He's like, hello, how you doing?

Speaker 2 Like, I'm holding phone calls.

Speaker 1 And remember that airline he said he owned.

Speaker 1 Lou faked promo photos for the totally fake company by taking pictures of toy airplanes.

Speaker 2 No.

Speaker 2 I'm obsessed with him again. I'm back on.

Speaker 2 You're ebbing and flowing. Because now I relate.
I'm like,

Speaker 2 I would do that in a heartbeat. At some point, it's like, when you're scamming the rich, it's fine.
It's when you're scamming like children that I draw the line, but go ahead. But toy planes?

Speaker 2 That's funny. That's really creative.
Yeah. That's

Speaker 2 genius.

Speaker 1 Well, all in all, Lou is said to have stolen over $300 million

Speaker 1 from nearly 1,000 people.

Speaker 2 That is disgusting, to put it frankly.

Speaker 1 As investigators are closing in, Lou starts shredding documents. And in February 2007, the IRS and the FBI raid Transcontinental's office and Lou's home.

Speaker 1 But at this point, Lou has already fled the country.

Speaker 1 country by the time of the raid lou hasn't been seen in the u.s in a month lou has straight up vanished he said a blib to put it in 90s terms it's where in the world is lou pearlman

Speaker 2 love and he's our carmer in san diego there we go really is if you had to flee the country where would you go croatia i love it yo that's really well i think it's what did you say I said, I love it there.

Speaker 2 Oh, yes. Well, yeah.

Speaker 2 Well, I think the criminals, like, it's famous for like, if you're trying to like, um, avoid getting tried for something in the us you will go to croatia i just know that off the top of my head that it seems like why would you go to croatia because there's something about the laws or something it's not like you hide like it's like they're that's a known fact i am not going to where would you go i don't know iceland i mean that's very close though i think very close they could hop skip in a jump but i feel like the ice planetic people would be like yeah it's like so i'll go when it's like dark 24 hours and be there they can't wouldn't you get depressed i mean any more than i already am don't that's why you need someplace like Croatia.

Speaker 2 You can get like right jumping. At least you can go to the blue lagoon and I'll be fine.

Speaker 1 Well, with Lou nowhere to be found, his companies declare bankruptcy and Lou's assets start to get auctioned off to cover his massive debts.

Speaker 1 At the auction, which takes place in Lou's offices, people are bidding on all kinds of boy band memorabilia, like platinum records, posters, autographs.

Speaker 1 They also auction off Lou's ceremonial key to the city of Orlando. Any guesses at how much a city key goes for? Especially Orlando?

Speaker 2 I imagine that that's like 20 bucks. Like, what does it really get you?

Speaker 1 Easily.

Speaker 2 20 bucks in Orlando?

Speaker 2 What does the key get you besides like symbolism? Right? It should get you into every single park. That's well, yeah.
It should be a fast pass straight into SeaWorld.

Speaker 1 Fast pass for the rest of your life. That's true.
Well, somebody at auction really loves the city of Orlando because they thought it was worth $1,400.

Speaker 2 Okay.

Speaker 2 Okay. I'm sorry.
I would have given it to Walt Disney. I would do that.
Yeah, exactly. I think I would buy that key for $1,400 after I priced it at 20.
I'd be willing to do it.

Speaker 1 Well, listen, another item that you might have been able to buy at this auction is a portrait of Lou, and we do have a photo of it.

Speaker 2 Oh, Jesus.

Speaker 2 Oh, my God.

Speaker 2 I'm sorry.

Speaker 2 And he had that in his home?

Speaker 1 Yeah, I'm sure this was hanging right above his office desk.

Speaker 1 For the people who are listening only, can you describe this portrait of Lou for them?

Speaker 2 I would

Speaker 2 I'm just in disbelief. I would it's spectral.
Yes. It's definitely spectral.
It definitely feels like it's not of this realm.

Speaker 2 It feels like a haunted mansion. Like it feels like it would move if you walked past it.
The eyes would follow you.

Speaker 2 i'm not under i'm is he bald or is that a halo it's almost a halo it's getting it's lighter by the head which is shocking and then i'm now noticing the toy plane front and center and that kind of says a lot unless that's a portrait of a plane but regardless it looks very toyish and obviously we have the moon man the the vma some other awards it seems gorgeous houses in the back yeah Gorgeous homes.

Speaker 2 That's Orlando for you.

Speaker 2 It's very much giving Orlando to me, I have to say.

Speaker 1 Well, as all of this is going on, stories start to come out about people who lost money to Lou's scheme, including people who lost their entire life savings.

Speaker 1 One of Lou's victims says, quote, he stole money from innocent people who trusted him and put all their life savings into an investment we thought was secure.

Speaker 1 Some of the people he scammed were elderly people. Some were even friends and relatives of Lou.

Speaker 2 This is a, I'm really shocked that this man didn't like run for office here. I think he really would, he would have done a great job, I have to say.

Speaker 1 I mean, if he were still around here in 2025, he would be in the cabinet.

Speaker 2 Oh, he'd be there. He'd be there.
Yeah.

Speaker 2 Yeah.

Speaker 1 In June of 2007, Lou is arrested in Bali, where he's been laying low in a resort under a fake name.

Speaker 1 Can you guess what his fake name was? Is it guessable?

Speaker 2 Is Is it going to upset us? It's Big Papa.

Speaker 1 Oh my gosh, that would have been good. No,

Speaker 1 he signed into this resort as Incognito Johnson.

Speaker 2 I love him. That's such a good drag name.
Welcome to the same Incognito Johnson. That is an excellent drag name, actually.

Speaker 2 Bali, at least, was a good choice, I have to say.

Speaker 1 At least he was catching some sun, some vitamin D. It really helps with the depression I'm sure he was, you know, dealing with by having to give up that self-portrait.

Speaker 2 Sure. I'm sure he was at the white lotus.

Speaker 1 Yeah, yeah, very white lotus. Well, after his arrest, Lou is brought back to the United States to face justice.

Speaker 1 And around this time, Vanity Fair publishes an article alleging that Lou sexually abused members of his band.

Speaker 1 Uh-huh.

Speaker 1 And though these very serious allegations are never litigated and Lou publicly denies that any abuse ever took place, they do cast a disturbing shadow over Lou's legacy of cultivating young talent.

Speaker 2 I mean, was the shadow not already kind of there? You know, like it's almost that almost just only adds to.

Speaker 2 And I'm not gonna say it doesn't surprise me. I know.
I was gonna say the same thing. I was gonna say the same thing, unfortunately.

Speaker 1 So, in May of 2008, Lou is sentenced to 25 years in prison, but the judge does give him a little offer.

Speaker 1 The judge offers to remove one month from Lou's sentence for every million dollars he gives back to his victims.

Speaker 1 So just doing some quick math here, that means if Lou returns the entire $300 million, he won't have to go to jail at all. But the cash was gone, so he did go to prison.

Speaker 2 That's like some, it's like in a Christmas Carol bargain.

Speaker 1 That's very like Scrooge, Scroogeian.

Speaker 1 So now Lou's broke behind bars, and he's also been revealed as a con man and a total fraud.

Speaker 1 All that and the continuing swirl of allegations of abuse mean that Lou's been brought to one of the lowest points imaginable.

Speaker 2 I don't feel bad.

Speaker 1 So, let's do a little where are they now? After everything they went through with Lou, Insync and the Backstreet Boys persevered to become the legends of pop music that they are today.

Speaker 1 In fact, many of the group's biggest successes and biggest albums, like Millennium and No Strings Attached, which both broke sales records, came after they parted ways with Lou. Thank God.

Speaker 2 That's really sweet. Yeah.
That's nice. Yeah.

Speaker 1 As for Lou, while in prison, he continued to stay involved in the music industry.

Speaker 2 And how?

Speaker 1 By working with a choir made up of other inmates.

Speaker 2 Oh, God. Oh, my God.

Speaker 2 He said, I know how to make a group. Let's go together, girl.
Can you imagine the choreo those inmates had to learn? They were like,

Speaker 2 I steaks every day.

Speaker 1 He also always believed that he'd be able to make a comeback. In an interview from jail, he said, I'll be back.
But he died in prison in 2016.

Speaker 2 That sounds about

Speaker 2 correct. Yeah.

Speaker 1 Now, listen, here on the big flop, we try to be positive people and end on a high. So are there any silver linings that you can think of that came about from Lou Perlman and his boy band era?

Speaker 2 I would say that he put

Speaker 2 very talented people on the map.

Speaker 2 And they, while they weren't getting the money that they deserved I'm happy to hear at least two of the groups were able to part and still find success yeah I would agree with that I also think that

Speaker 2 hopefully we have learned from these transgresses and people have you know really have have I think maybe parents have gotten more aware of when a contract is in front of them I mean clearly that isn't the case because we've only seen this happen time and time again in recent years but I hope that the more the story thanks to you for sharing this story, you're going to single-handedly stop a child from signing an entertainment contract at nine years old.

Speaker 2 And that's the beauty of it.

Speaker 1 Hope so.

Speaker 2 That's what this is all about.

Speaker 1 Well, now that you both know about Lou Perlman, the boy band mastermind whose schemes cost him everything, even his freedom, would you consider this a baby flop, a big flop, or a mega flop?

Speaker 2 I would say dying in prison means mega flop. I think that you can't really come back from that in several ways.
Yeah, no. And he's been lying from the very beginning.

Speaker 2 And if you have a blimp involved, mega flop. Even just being a kid obsessed with blimps, that starts you off on a really bad note.
Yeah. And it continued throughout his career.
Yeah.

Speaker 1 Well, thank you so much to our high-flying guests, Joe Hedges and Andrew Muscarella for joining us here on The Big Flop. And of course, thanks to all of you for listening and watching.

Speaker 1 If you're enjoying the show, please leave us a rating and review.

Speaker 2 Oh, what's this?

Speaker 1 Are you excited that we'll be back next week with another flop? Or did you just take an enzyme? That's right. Our next big flop is Steve Warshack's natural male enhancement pill.

Speaker 2 Bye.

Speaker 2 Bye.

Speaker 1 If you like the big flop, you can listen early and ad-free on Wondery Plus. Join Wondery Plus in the Wondery app or on Apple Podcasts.
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Speaker 1 The Big Flop is a production of Wondery and At-Will Media. Hosted by Misha Brown, produced by Sequoia Thomas, Harry Huggins, and Tina Turner.
Written by Anna Rubinova and Luke Burns.

Speaker 1 Engineered by Zach Rapone. With support from Andrew Holzberger.
The video podcast is edited by Olivia Vessel. Managing producer is Molly Getman.

Speaker 1 Executive producers are Kate Walsh and Will Malnotti for At Will Media. Legal support by Carolyn Levin of Miller, Korzynik, Summers, and Raymond.

Speaker 1 Senior producers for Wondery are Adam Azaraff, Matt Beagle, and Jennifer Klein Walker. Managing producer is Sarah Mathis.
And the senior managing producer is Callum Plus.

Speaker 1 Music supervisor is Scott Velasquez for Freesong Sync. Theme song is Sinking Ship by Cake.
Executive producers are Lizzie Bassett, Dave Easton, and Marshall Louie for Wondery.