Backstreet Boys' creator singing the blues over accounting charges

His hits include "No Strings Attached" by the boy band 'N Sync, but authorities say Lou Pearlman roped bank officials into a scheme that resulted in nearly $20 million in personal and business loans by using forged documents from an imaginary accounting firm.

Indonesian authorities found Pearlman, the creator of the Backstreet Boys and 'N Sync, at a hotel on the resort island of Bali and expelled him from the country last week, the Associated Press reported Monday.


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Pearlman, who had been sought for months, also faces lawsuits from individual investors and two involuntary bankruptcy proceedings. He lost control of several companies in February when they were turned over to a receiver.

Pearlman's ventures have included boy bands, airplane charters, talent scouting and restaurants.

Florida officials also allege that Pearlman defrauded more than 1,000 investors of more than $315 million in a long-running Ponzi scheme. Integra Bank and others are seeking more than $120 million from Pearlman and his companies, according to bankruptcy court documents.

After Indonesian authorities turned him over to the FBI last week, Pearlman was taken to the U.S. territory of Guam to face a federal judge on charges of bank fraud. He faces another hearing next week, AP reported.

FBI officials said Pearlman used the name "Cohen & Siegel" for the accounting firm that created documents for lenders and investors, according to a criminal complaint filed in March. Investigators said the firm appeared to be fake.

Cohen & Siegel was linked to a Coral Gables, Fla., address and telephone number, but only an answering service was at that location, according to the complaint. All bills and other correspondence addressed to the firm were sent to Pearlman, officials said.

Integra Bank said it relied on Cohen & Siegel documents as a "clean opinion" in giving the go-ahead for four loans: two in 2004 for $19 million to Trans Continental Airlines, and two last year to Pearlman totaling nearly $1 million, according to investigators.

The complaint said documents included two tax returns for Pearlman's airline company from 2003 and 2004 prepared by Cohen & Siegel but never filed.

No licensed, state-registered accountants for the firm have been found.

Pearlman had said last fall before he disappeared that Cohen & Siegel was based in Germany. At the time he faced a lawsuit by an investor's estate.

He has denied paying the Coral Gables firm's bills, contradicting a deposition from an answering service worker. The court record also includes cleared checks.

"I don't pay anything. I don't know what they're talking about," Pearlman said. "And even if I did, what does that have to do with anything, anyway?"

The complaint alleged that an FBI official in Germany could find no evidence Cohen & Siegel existed there.
Pearlman also faces federal allegations that he promised payments to lenders from a nonexistent German account.

Pearlman would not answer questions about his assets Friday in a hearing determining whether he would be granted a public defender. He remained Monday at the Guam prison.

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