End of the Road for "Backstreet" Impresario

While he was busy promoting popular 90s band sensations 'N Sync and the Backstreet Boys, impresario Lou Pearlman acknowledges that he was also engaged in a big bucks scam selling shares in a fictitious airline company, according to federal prosecutors.

Pearlman, 53, signed a plea agreement Tuesday — it was 47 pages long — with details of how he defrauded hundreds of investors and some well-known banks of somewhere in the neighborhood of $300 million.

He is set to plead guilty Friday in Orlando to federal charges of conspiracy, money laundering and making false statements during a bankruptcy proceeding.

The band promoter could get up to 25 years in prison and $1 million in fines — it's up to the judge. He must not only make full restitution to victims but also forfeit several cars, including his super pricey 2004 Rolls Royce Phantom.

During his time promoting Justin Timberlake and others, Pearlman was also talking investors into buying stock in his non-existent Transcontinental Airlines, Inc. and convincing Bank of America, Washington Mutual and others to loan him money or provide lines of credit.

In his plea agreement, Pearlman admits the company "existed only on paper." Prosecutors said the fake airline and its sister travel services firm as well as another scam, the Employee Investment Savings Account, "were 'Ponzi' schemes by which money raised from later investors would be used to pay off earlier investors."

He returned some $43 million to investors in his savings account scheme, which lasted from 2003 through 2006, but funneled $38 million to various entities he owned. He also tricked investors by providing faked tax returns to banks, and by creating a fictitious German bank branch.

He also filed faked documents during his bankruptcy proceedings.

Pearlman fled the country a year ago. He was found in Indonesia and deported to Orlando, where he has been in jail since July 2007.

by Elizabeth Olson