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Investors Sue Crist Over Boy Band Mogul's Scam

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By TOM BRENNAN | The Tampa Tribune

Published: December 29, 2008

A group of investors sued Gov. Charlie Crist and state financial regulators today, claiming they didn't do enough to protect them from losing $44 million in a stock scam ran by boy band promoter Louis Pearlman.

The lawsuit was filled in Hillsborough County Circuit court.

It states that Crist dragged his feet in investigating Pearlman's Transcon Investments scheme, which allowed it to flourish. The suit alleges Crist was swayed by the $12,000 in campaign contributions Pearlman and his associates made.

The lawsuit, which contains only the investors' version of the facts, was filed against Crist, Florida and the Florida Office of Financial Regulation. Crist served on the regulatory board while he was attorney general.

The lawsuit was filed on behalf of more than 200 investors who lost $44.74 million in Pearlman's scams.

Pearlman is serving a 25-year federal prison sentence. He pleaded guilty in May to running a $300 million stock and investment scam. The lawsuit contends Pearlman enticed individuals and banks to invest in Trans Continental Airlines Travel Services Inc. and Trans Continental Airlines Inc., which existed only on paper.

Pearlman fled regulators and angry investors but was arrested in Indonesia in June 2007

The state sued Pearlman in December 2006, but the lawsuit claims Crist and regulators knew of his shenanigans as far back as 2002 and should have stepped in. It claims they turned a blind eye.

It also accuses Crist of delaying or interfering with the state's investigation of Pearlman.

Pearlman was the founder of the Backstreet Boys and 'N Sync.

Reporter Tom Brennan can be reached at (813) 259-7698 or tbrennan@tampatrib.com.

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