In Corrupt America: Pearlman’s Fall, A Tragedy in Four Acts

In Corrupt America: Pearlman’s Fall, A Tragedy in Four Acts

PROLOGUE

One day in 1964, Lou Pearlman, twelve years old at the time, supposedly moved to his windowsill looking out over the Whitestone Expressway in Queens, New York. A shy chubby kid with few friends, Pearlman fit the template for a dreamer, for an upstart. He looked out toward the Flushing Airport, where a blimp, the first one he'd seen in his life, touched down for the World's Fair. Mouth surely agape, eyes wide, Pearlman was filled with hope and a dream, a fantastical vision of taking to the skies and escaping his overweight frame and friendless existence for the freedom of air.

This is an origin story, and with most criminal's origin stories, there is doubt behind it. The account comes from Pearlman's autobiography called Bands, Brands & Billions, and there is good reason to be skeptical. It's far too perfect a moment, far too planned. And according to his neighbor and childhood friend, Alan Gross, it wasn't even the right windowsill.

Speaking to Vanity Fair a few years back, Gross explained:

This is the window Lou always talks about. Lou’s apartment is on the other side of the building. He couldn’t even see the blimps from there. He saw them here, because I showed him.

It seems like a pointless fact to leave out, but Pearlman did, and it's fitting in a way because, in a life as crazy as Pearlman's, there are plenty more facts I'm sure he'd like to leave out.

ACT ONE

Pearlman became obsessed with aviation, and, most of all, blimps. He began his career by creating a helicopter taxi service based on a business plan he cooked up while studying accounting at Queens College. He claims he made his first million by 21, but some consider that a lie. From there he wormed his way into a relationship with Theodor Wüllenkemper, an industrialist at the head of the one of the best blimp building companies in the world. When Wüllenkemper came to America for the first time, Pearlman sent him a two-foot tall card covered in glitter asking him to dinner. Amazingly, the industrialist agreed, and Pearlman picked him up in the one helicopter he had leased for this taxi company and they dined in his apartment, Pearlman's mom the chef for the evening.

The wooing paid off, as Wüllenkemper allowed Pearlman to train at his facilities in Germany for a few years before he returned to America in 1980 to start his next business, Airship Enterprises Ltd. Pearlman's first order of business was to lease a blimp to Jordache Jeans for promotional purposes, but Pearlman, even after completing the deal, had no blimp for the job. Somehow, he wrangled up a balloon "envelope" and an aluminum frame, which he then covered in gold paint, as per Jordache's request. Unfortunately, after a few days in the sun, the paint turned to a shade of brown, making the ship look like "a giant turd," according to a Gross.

On October 8, 1980, the blimp took flight. It was supposed to circle a party being held by the jean company, but instead crashed into a garbage dump less than a mile away from where it took off. The crash made national headlines, and Pearlman's reputation was thrown up into the air. But somehow, when the dust settled, Pearlman came out on top after a jury awarded him $2.5 million in damages from his insurer.

ACT TWO

After the crash, Pearlman started a new company, Airship International. At the urging of a Wall Street broker, Pearlman took his new company public, and in a 1985 public offering, was able to rake in $3 million and buy his first real blimp. He immediately leased it out to McDonald's and from there, was able to expand.

He relocated to Florida, and began a huge push to bring in new investors. Out of thin air, he produced a second company on paper, Trans Continental Airlines, which he then started selling stock for as well. In the early 1990s, Pearlman offered investors a new option, a chance to take part in Trans Con Air's Employee Investment Savings Account, or EISA, which paid an annual return of about eight percent. He claimed that it was a "rock-solid investment," guaranteed by the Federal Deposit Insurance Corporation, AIG, and Lloyd's of London. In truth, it was guaranteed by none of these, and no such thing as an EISA ever existed. But at the time, for Pearlman, it didn't matter. He now could fly across the country in his rented Lear Jet, back and forth between metropolises and his 6,000 square-foot home in Orlando.

The seeds were planted, but the fall was yet to come"¦

Look for Acts Three and Four next week.