Creditors get OK to question Pearlman

Judge Arthur Briskman approved the request from Fred Lowe and Jim Lowy to question Lou Pearlman on behalf of creditors. According to the judge's order, what's known as a "Rule 2004 examination" has been approved for this Thursday and Friday, between 9 a.m. and  5 p.m. at the federal courthouse. However, it appears that a deal has been worked out to postpone the examination until after the sentencing.

Lowe and Lowy and/or their clients will have to pay any costs involved. They hope to get information that will help them in pursuing cases against others. Note: these exams are not open to the public.

Comments

Any association with pearlman will hurt US5. The further pearmans fat grubby fingers stay away , the better there chance for success.

Not when that opinion comes from nameless, faceless as-holes! I empathize with all you are going through sir, Karma works in strange ways. Good Luck.

your right.

Right, but it's no excuse to be nasty to someone who expresses a different opinion.
--------
His anger is fear. We all handle things in our own way and time.

Posted by: | May 19, 2008 at 06:42 AM

His anger is fear. We all handle things in our own way and time.

I'm sorry about your situation and your wife's bad health. However, like anyone else, I have a right to state my opinion why I think this is a bad idea and not in the best interests of the investors.There are many who have also expessed the same sentiment, and it is your right to disagree.Your nastiness and anger are misdirected.
-----
11:21 If you are so f smart what is your better idea? I'm 60 years old, no s.s. yet, my wife is terminal,and I have to sell my home because I can't afford the taxes and insurance. I'm sick and tired of jerks on this blog talking out of their butts but not offering any viable solutions. how about a new rule don't say anything negitive, unless you have a positive solution.

Posted by: | May 18, 2008 at 12:55 AM

May 18, 12:55 Sir I do not have a idea for you, but I am sorry about you and your wife and I will pray for you both. May God Bless You and your family.

sorry, newspaper

Alec, just because something is writtten in a Newspapar does NOT make it true. Please, I thought you were smarter than that.

Clean Air, TCA, and Airship searches all come up with the name Julian Benscher as one of the biggest shareholders. If this guy knew about the fraud but took a payoff not to report it, is that a crime?

"Everything I had believed [about TCA] for eight years was a lie. I didn't know what to do." "But Benscher struck a settlement agreement with Pearlman [in 1998] in which he promised not to publicly disparage him, and he has never revealed his discovery to a soul until now."
-Vanity Fair

It looks like this guy (who supposedly inherited a fortune) can come up with $217 million. That's about half of what was lost from banks and investors after he took his payoff from Pearlman ten years ago, that should have been prevented. Why is he being ingnored? Is it legal to not report fraud in exchange for money?

http://albany.bizjournals.com/albany/stories/2007/12/10/daily7.html?jst=pn_pn_lk

11:21 If you are so f smart what is your better idea? I'm 60 years old, no s.s. yet, my wife is terminal,and I have to sell my home because I can't afford the taxes and insurance. I'm sick and tired of jerks on this blog talking out of their butts but not offering any viable solutions. how about a new rule don't say anything negitive, unless you have a positive solution.

11:27 it never will be he will be in the county club of prisons and the joke will be on you. I think he needs to come up with money now in order to get this deal, and only with a one year probationary period.

Where's the hope that we will ever get any money back? Soneet is just going to line his own pockets and you people keep forgetting he's not going to be in a max security prison. Fed. prison for white collar crimes is often referred to as a "county-club." Give the authories some credit. If he doesn't show some pos. results in a year they revoke his deal. He's asking for phone and internet use not a weekend pass. What do we have to loose?

Life in jail needs to be unbearable for him, not more pleasant because he can get on the internet and bs over the phone.

I'm sorry, I know people want to have hope. In a dreamworld it sounds like a good idea. the reality is that this band doesn't need him and why would they want work for or be associated with him. People are going to be turned off that he is behind it. They're not going to buy records out of sympathy and he can come up with all the business plans he wants, there's no real potential for success.Who is going to call to borrow money to fund this? Who would believe him. At best it would be a curiosity than ends quickly and doesn't amount to much.I truly believe he needs to be forced to cooperate now and that's it.His real motives are just not to be trusted, maybe he needs more time for someone to move his money around and then there will never be any hope of recovery.This deal would be like all of his others, based on promises that never come to fruition and people are waiting and hoping.Emotionally and mentally do victims need to fall for this crap again.Let authorities and Soneet or someone more qualified work harder to find what may already exist.He's getting people to fall for his nonsense again.It's time for this to be over.No pie in the sky scenarios.
-------------
6:38 I agree with you to a certain point,how about he returns as much money as possible along with having internet access a couple of days a week. He also has to stay in prison until all is paid back.

Posted by: | May 17, 2008 at 09:59 PM

6:38 I agree with you to a certain point,how about he returns as much money as possible along with having internet access a couple of days a week. He also has to stay in prison until all is paid back.

How is another of Pearlman's company doing...Clean air Systems in Israel?

The success he "built" with Nsync and BSB were not his successes! These groups did not make any money in the US until they were signed by Jive. LJP only made a profit on them by making them sign their soul to the devil....

He's not an optimist. He a BS artist stalling for more time and thinks he can STILL manipulate people into doing things his way.Unfortunately, I know some victims may be thinking that could be a possible solution. No way.Don't be fooled again. HE's a fool,still unwilling to part with his secrets and hidden cash,even at this point, if he can finagle something else.He's lied so long about not having any money left and now he wants to have a band work off the debt.He's always got it all figured out.Time to get tough with him, for once and forever. NO DEALS,you talk now or you sit in a corner for a oouple of years and think about what you did and the darkness ahead.He's got to realize he is no longer in control.
--------------
......Pearlman is an optimist who's probably confident he could rebuild once freed, so if did have any money he would fess up to get out of jail even just for one year off. This seems like an effort to come up with anything that will reduce the 25 years.

Lavish lifestyle spending?

here is homework assignment:

Take $100 million dollars cash and attempt to write down how you can spend this much cash in one year, item by item.

post the budget on this blog

the results will be fascinating

Soneet, ever heard of Clive Davis? Louie's #1 arch nemesis in the music industry? Sell US5 to him......

Wrong - the $130 million that he borrowed from the banks was borrowed in the last 2 years before he fled the country. Some of it was used to pay a bank or two, but what happened to the rest?

===========

It looks like he spent everything on a lavish lifestyle and to pay enormous monthly bank loan payments. (What's the payment on $200 million?)

After BSB and NSYNC there has been no success, from what I can tell. He's tried several times including O-Town, Take 5, LFO, C-Note, Natural, Phoenix Stone, and even an Aaron Carter comeback, among others, but they all failed. It looks like he spent everything on a lavish lifestyle and to pay enormous monthly bank loan payments. (What's the payment on $200 million?) Then when he ran out of money it all fell apart. Pearlman is an optimist who's probably confident he could rebuild once freed, so if did have any money he would fess up to get out of jail even just for one year off. This seems like an effort to come up with anything that will reduce the 25 years.

A Solution

Release Pearlman from Jail forever

under the condition that he gets picked up from Prison by a large bus full of the people that he has defrauded.

Very simple, eh?

The only "ceremony" that Big Lou should attend are the ones that we get to "roast" him... literally, not figuratively.

Right, and then when they win a Grammy, he'll make a video speech in a tux from jail. And then this will become a great story for the movies, and then they'll interview him about the great thing he's doing and then maybe he'll become a saint.Keep fantasizing.Maybe we should allow him and all the white collar criminals to become day traders

If he thinks he can make compensation money while he's in jail, he has absolutely no incentive to cooperate now.People don't have time to wait for his band to become a hit.The guy is delusional.He needs to face and feel the reality of the future he created for himself without making it more pleasant and interesting for himself. Maybe then he'll feel like talking after he's had a few years to really think about what he's done without distractions and hope.He needs to feel the dread of spending years in jail.

No extra phone time
No Internet time
No extension to the sentencing hearing

PERIOD

Exactly. who does he think he is...he thinks, as usual, that he will arrange the deal, so that's it's satisfactory for him.He had his chances,he had the time,and the money and now he thinks he's going to continue his chosen career and feel like a mogul behind bars? Forget it. He's a criminal, and he needs to be making license plates that's it.No more glory.If he can't cooperate and part with his stash now, let him rot in jail.He thinks he's the exception to every rule. Why not just let every criminal continue business as usual from jail,like it's just a vacation.Doesn't work that way.He needs to realize his last deal is now...cooperate and give up information and serve your sentence.
-----
If US5 needs to be promoted in the USA let the trustee get someone to do it that isn't in jail. Maybe Soneet would like to become a promoter? I say "sorry, Charlie" and I am an investor that he owes money. I don't ever want him to see the light of day outside of the four walls of the prison. EVER. Even if that means I don't get a dime back.

Posted by: | May 17, 2008 at 01:46 PM

If US5 needs to be promoted in the USA let the trustee get someone to do it that isn't in jail. Maybe Soneet would like to become a promoter? I say "sorry, Charlie" and I am an investor that he owes money. I don't ever want him to see the light of day outside of the four walls of the prison. EVER. Even if that means I don't get a dime back.

Smoke and mirrors. You would think that by now the authorities would see through the games. Oops I forgot that Perlman learned how to work the system decades ago.

It substantiates it in your own mind. The number of people actually charged doesn't preclude having a network of facilitators who are guilty or negligent.That you and Jeff? are fixating and monopolizing on relatively unimportant with all your posts displays a very desperate and defensive attempt to distract and control the topics and sway opinion.
---------
To substantiate the argument this was a small scam (small number of scammers), read this:

I think Pearlman's motivation is not to help repay money, it's to help reduce his sentence. Otherwise he could be sentenced and then do his "charitable" work.

I think Pearlman's motivation is not to help repay money, it's to help reduce his sentence. Otherwise he could be sentenced and then do his "charitable" work.

Fool me once, shame on you, fool me twice, shame on you too!

Link to Orlando Sentinel story:
http://www.orlandosentinel.com/business/orl-pearlman1708may17,0,4456471.story

Do we have to wait for US5 to be a hit? Helen must have slept late. It is in the Orlando paper

[Alec]

To substantiate the argument this was a small scam (small number of scammers), read this:

124) The primary actors in The Fraudulent Enterprise were Defendant Pearlman, Defendant Pearlman Companies, Defendants Fischetti, Crudele, Finger, Bacchus, Wuellenkemper, McDonald, Tolner, Jans and Chamberlain and other Defendants.

125) The secondary actor in The Fraudulent Enterprise was Defendant FISERV and its predecessor Retirement Accounts Inc.

126) The other negligent participants in The Fraudulent Enterprise were the directors, officers, agents and representatives of Defendant Pearlman and his companies, as well as the directors, officers, agents and representatives of Defendant Banks which allowed Plaintiffs money to be deposited into unauthorized, improper and unsecure accounts from which it was later stolen.

-

1. Pearlman
2. Fischetti (Sales)
3. Crudele (Sales)
4. Finger (Secretary)
5. Bacchus (Accountant)
6. Wuellenkemper (???)
7. McDonald (???)
8. Tolner (???)
9. Jans (???)
10. Chamberlain (Attorney)

... "other Defendants"

The individuals noted with question marks are presumed guilty by association, yet the suit does not allege with specificity any criminal actions. Further, they have not been indicted by the government.

(Note that Alec D. wasn't listed.)

This was a very small group of scammers, even if you include the extras, running a telemarketing scam. The scam was a few phone calls and letters or less to each person.

Yes, 7:19, the banks are liable and likely guilty. What is the threshold of money transfers for the classification of "suspicious"?

Remember when Eliott Spitzer got in trouble? It was after a bank, because of the law, reported suspicious transfers (less than $10,000).

Whether Pearlman moved $100,000,000 or $78,000,000, or some other number last year (or before), it's possible the transfer(s) surpassed the limit of suspicious.

Yet the banks could argue they thought Pearlman was a billionaire as he claimed to be; therefore tranfers of $50,000,000 or more were not inherently suspicious.

Then the issue becomes *where* the money was transferred to. If the amount was not seen as too high, but the destination was suspicious, they would be liable by failure to report it.

3:08, it is sloppy lawyering without references as to the money moved claim. And sensational. However the bank charges may have merit.

[chetv2]

when is sentencing is it may 20

[Alec]

> (approximately $78 million or more, according to reports)

According to reports? Whose reports? How do these attorneys get away with making such extreme allegations with no source cited? It's not published in any newspaper or previous court record. It's not common knowledge. There's no footnote in the suit. It's sloppy lawyering. Where did they get that info? They saw it somewhere on the internet like a blog?

[Alec]

"--------------------
Clements et al v. Pearlman et al – Florida Federal Complaint March 2007 – Page 29

114) Defendant Pearlman convinced the other Defendants to go along with him and as
a result Defendants FISERV, Bank America, 5/3 Bank and Wachovia Bank (i) did not
report the problems they learned of because of their relationship with and the profits
they earned from their business with Defendant Pearlman and Defendant Pearlman
Companies, (ii) did not perform their fiduciary duties, and allowed monies to be
transferred to wrong or improper or unauthorized accounts; (iii) did not utilize
ordinary care, did not adhere to banking reporting laws such as the US Bank Secrecy
Act, which requires reporting suspicious activity; and allowed monies to be deposited
into improper, unintended and/or non-trust or non-fiduciary accounts from which they
were withdrawn and misappropriated, and also allowed money (approximately $78
million or more, according to reports) to be transferred out of Defendant Pearlman
Company EISA accounts and/or overseas in the last few months of 2006 and the
beginning of 2007.
115) Defendant Crist – as a licensed attorney, the Attorney General of Florida and a
Public Official of the State of Florida - had a duty to avoid the appearance of

Case 8:07-cv-00399-EAK-TGW Document 1 Filed 03/05/2007 Page 29 of 104

I find it hard to believe Soneet, his professionals and the FBI investigators on the case missed the angle Lowy is going after.

Or is it an alleged Government conspiracy to not recover the funds and pardon Louie ASAP?

what going away party? The one with the champagne?

5:01 You are 100% correct! I just went to the Lowy suit on page, 29 item, 114 it names the banks and financial
institutions that permitted the wiring. It does say approx. 78 million so you were slightly off with your numbers but as far as 9:14 you are talking out of your a@@ or you work for Pearlman.

9:14 you need to go to this blog's archives and read the Lowy Lawsuit. I didn't make this up and you can read
it in black and white for YOURSELF!

Why not ask the people who attended his going way party.

[these boys is crazy]

i ain't neber seen such crazy goin ons since my mama said the great lord lived in her left knee.

12:08...for such a strong opinion at least say who you are in some sort of way or it's just more hot air..

12:08 you are so wrong. He had alot of long time people. He even had a few people whose only job was to write on blogs. Small time scam???

No, you're wrong again. He didn't have any boys to pay off. What exactly do you think he needed help with? Don't you know how small this scam was? He had one office, one secretary, one lawyer, one accountant, and a few salesmen. That's it.

2 heads are better than one they say.

Wrong again. Lou was paying off his boys in the 11th hour.

> there is approx. $100 million that Lou diverted out of the country during the 11th hour when this was all becoming exposed.

False. If he'd moved $100m then, he wouldn't have pi$$ed around with Rene Chamberlain or used bogus documents after he left the country in his bantruptcy fraud attempt. Read the Chamberlain Depo Transcript, and stop spreading false rumours online.

Why do we need these two characters when Soneet is already going to question him? They can't possibly have better leads than Soneet after all his months of investigations, depositions, court hearings, document reviews, etc. Basically, Soneet is hot on the money trail and they're coming in cold. What do they know that Soneet doesn't?

Just because they are allowed to ask, doesn't mean they will get any answers or truthful answers. Creditors should have asked a lot more questions before they lent him money.

[Kim]

I could care less if they question him or not, I'm just glad that the sentencing date is almost here. Only 7 days to go, watch out Pearlman!

pipe in his briefcase hahahahaha..too funny.

[wise fool]

i'm sure the big man will be shaking in his boots while in the same room as lowy. i wonder is lowy will forget that he has a pipe in his briefcase when he goes to the pokey.

10:51 am, indeed...and why is this not common knowledge...what our government has proven in all this so far is they are better at intimidating people than protecting them...if this is good news for EISA people, will creditor committee lawyers make their own claims?

The reason the Lowy questions to Pearlman are going to be so very important is because if you look at his initial lawsuit, you will see his investigators had uncovered several banks and financial sources that had wired money out of the country in Nov/Dec 2006. As several previous bloggers have spoken about this, there is approx. $100 million that Lou diverted out of the country during the 11th hour when this was all becoming exposed. This could be good news for the EISA people. But why didn't our government do this?

9:35 am, of course. Longer it ran the more damage it caused and the more premeditated it was. They call that evil.

Most of us hope Lowy is vindicated of any negative unproven perceptions by winning for the creditors. How could anyone not hope for that? Maybe in doing that the NY case involving Fagan and Lowys fallout will show what's what in all that garbage that put clients last. It will take some time to see if truth can avoid being a casualty of war.

9:22 Sorry to disappoint, Investor

I don't see a connection please explain.

Does the period of time Pearlman swindled people have any bearing on his sentence? Would his sentence be less if he swindled peoople for say 1 year instead of for over 20 years?

Sounds like it, out for yourself..

I believe it is self explanatory don't you Jeff.

Ah so you don't care to enlighten the ignorant masses?

Please do your own research and educate yourself on the subject.

understand what 8:38 am? enlighten us.

I do not know if they are using public defenders? Why would they Lou took the money.

Maybe if you read the plea agreement you will understand or you can have someone read it to you.

Are any agents using public defenders yet? Guess not. Guess why.

Soneet is the final authority? That's a hot one. Agents knew they were dealing in an unregistered security for years. Ask the OFR.

Attorney's did nothing wrong? Please elaborate.

Sonet himself said that Crudele supplied all the false information to the agents. How could they know. You need to get your facts straight. Check the victims list which has been so top secret on this blog.

Lou fooled everyone.

The agents will go to jail. Do think you are safe because you went out of the way to not know what is going on. All of Lou's Boys are blaming the agents. The easy money, nice cars and big houses where not free. It is time to pay.

Agents did nothing wrong? Please elaborate.

Attorneys, Financial Planners, Agents, Friends of Friends, they all get trashed here and did nothing wrong. What makes you so special. Wait nothing.

No one dishes it out better than the attorneys.

To all those who think they know what is going on, and who have criticized the attorneys...Go somewhere else and dish out your garbage there.

Rule 2004. Examination

(a) Examination on motion.

On motion of any party in interest, the court may order the examination of any entity.

(b) Scope of examination.

The examination of an entity under this rule or of the debtor under § 343 of the Code may relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge. In a family farmer's debt adjustment case under chapter 12, an individual's debt adjustment case under chapter 13, or a reorganization case under chapter 11 of the Code, other than for the reorganization of a railroad, the examination may also relate to the operation of any business and the desirability of its continuance, the source of any money or property acquired or to be acquired by the debtor for purposes of consummating a plan and the consideration given or offered therefor, and any other matter relevant to the case or to the formulation of a plan.

(c) Compelling attendance and production of documentary evidence.

The attendance of an entity for examination and for the production of documents, whether the examination is to be conducted within or without the district in which the case is pending, may be compelled as provided in Rule 9016 for the attendance of a witness at a hearing or trial. As an officer of the court, an attorney may issue and sign a subpoena on behalf of the court for the district in which the examination is to be held if the attorney is admitted to practice in that court or in the court in which the case is pending.

(d) Time and place of examination of debtor.

The court may for cause shown and on terms as it may impose order the debtor to be examined under this rule at any time or place it designates, whether within or without the district wherein the case is pending.

(e) Mileage.

An entity other than a debtor shall not be required to attend as a witness unless lawful mileage and witness fee for one day's attendance shall be first tendered. If the debtor resides more than 100 miles from the place of examination when required to appear for an examination under this rule, the mileage allowed by law to a witness shall be tendered for any distance more than 100 miles from the debtor's residence at the date of the filing of the first petition commencing a case under the Code or the residence at the time the debtor is required to appear for the examination, whichever is the lesser.

Notes

Wow, very good. Good luck getting info. Hanberg dosn't want known though unless the Judge is really on the creditors side.

So what is stopping the other lawyers from doing same? Certain officials may be squirming.

Excellent

good decision by the judge in this case

What possible costs?

Transcription? The attendance of the public defender? A jumbo pack of Twinkies to keep Lou attentive?

Why haven't the prosecuting attorneys already asked the questions and made the answers freely available to the creditors?

Interesting development. I hope these two know what they are doing and are successful. Good luck, gentlemen.