Ponzi Record

United States · To 2007 (sources reviewed do not give a start date)

Trans Continental airline investments and Employee Investment Savings Accounts

The US Attorney's Office described a Ponzi scheme based on investments in Transcontinental Airlines Travel Services and Transcontinental Airlines, which it said existed only on paper, alongside a bank fraud scheme and a bankruptcy fraud scheme. The Tampa Bay Times reported that savings accounts were marketed to retirees as safe, FDIC insured investments and that money was paid out as it came in rather than invested.2,1

Losses as statedThe US Attorney's Office estimated losses from the three schemes at over $300 million. CBS News reported that prosecutors put about $200 million on individuals and $100 million on banks.2,3
Victims as statedNot stated as a number in the sources reviewed. The US Attorney's Office listed investors and federally insured banks among the victims.
Recovered for investorsThe Tampa Bay Times reported in May 2008 that investigators had recovered only about $3.5 million.1

People and outcomes

Louis J. Pearlman

Pleaded guilty on 4 March 2008 to conspiracy to commit an offence against the United States, money laundering and presenting a false claim in a bankruptcy proceeding. Sentenced on 21 May 2008 by Senior Judge G. Kendall Sharp in Orlando to 25 years in prison, according to the US Attorney's Office. The Tampa Bay Times reported 12 years of supervised release and a $200 million judgment. He died in August 2016, aged 62, while serving his sentence in a Florida prison, EFE reported citing the Federal Bureau of Prisons. The Bureau's inmate locator records his release from FCI Miami on 19 August 2016 with release code D.2,1,3,4,5

Response: He told the court: "I'm truly sorry and I apologize for what's happened," CBS News reported. The Tampa Bay Times reported similar words.3,1

Timeline

  1. Pearlman pleads guilty.2
  2. Pearlman sentenced to 25 years in prison.2,1,3
  3. Pearlman dies while serving his sentence, EFE reports citing the Bureau of Prisons.4,5

Sources

  1. Tampa Bay Times, Lou Pearlman gets 25 years in scam, time off for loot (21 May 2008)
  2. US Attorney's Office, Middle District of Florida, Lou Pearlman sentenced to 25 years in federal prison (archived copy in the govdocs1 corpus) (21 May 2008)
  3. CBS News, Lou Pearlman going bye bye bye (21 May 2008)
  4. El Diario NY (EFE), Muere en prisión Lou Pearlman, creador de Backstreet Boys y N Sync (21 August 2016)
  5. Federal Bureau of Prisons, Inmate locator record, Louis J. Pearlman, register number 02775-093 (28 October 2026)