Pearlman’s Ponzi scheme came to a head in 2006. Skinner described that the lack of new investors made it difficult to maintain the story Pearlman was telling. Investors began to demand their money, which Trans Continental did not have.
Soon after, Trans Continental and Pearlman’s office and home were raided by the FBI. However, Pearlman had already left the country six weeks before the raid.
Ultimately, the FBI found that Trans Continental did not own any airplanes. There were no operations other than the larger investment scam.
Mason said, “Pearlman was a master forger. He would forge signatures and create false seals. Lou Pearlman had totally false bank statements, tax returns.”
In 2008, Pearlman was sentenced to 25 years in prison on charges of conspiracy, money laundering and making false statements during a bankruptcy proceeding. Eight years later, Pearlman died of cardiac arrest in prison.
The docuseries adds, “Of the $500 million Lou Pearlman stole only $10 million has been recovered. Nearly 2,000 individuals and families invested with Pearlman over more than 30 years. It was the longest-running Ponzi scheme in American history.”