The end of the boy-band craze may be the least of Lou Pearlman’s worries.
Pearlman, the music impresario known for discovering the pop bands N*SYNC and Backstreet Boys, is in hot water over allegations that his talent agency, Trans-Continental Talent, told thousands of aspiring models and actors it would help them find work, and then simply posted their photos in its database.
Numerous former employees and clients have come forward with complaints in recent months, triggering investigations in California, Massachusetts and Florida. Pearlman is the chairman of Trans-Continental.
Meanwhile, the Orlando, Fla.-based company has raised eyebrows by continuing to work with at least two men who have spent time in prison on fraud charges, according to sources and SEC filings.
The company has offered conflicting stories about one of the men – Cortes Randell, the Federal News Service founder who went to prison twice for fraud.
When Pearlman bought Options Talent last year and rolled it into his Trans-Continental empire, he said that Randell, until then a top exec at Options, had left the company. But in Trans-Continental’s most recent Securities and Exchange Commission filing, the company disclosed that Randell had been retained as a consultant.
Moreover, according to sources, Randell continues to have a wide involvement in the company. “He basically still runs the show,” says one former employee.
The other ex-con, Alec Defrawy, who once served time for bank and wire fraud, remains a consultant to Trans-Continental, according to SEC filings.
A large block of Trans-Continental shares is owned by an investment partnership controlled by Defrawy’s mother.
A spokesperson said neither man is employed by Trans-Continental – which bills itself as the largest modeling agency in the world – but they continue to work as consultants.
Meanwhile, several state investigations of the agency appear to be gaining steam.
Florida recently launched an investigation over allegations the company dupes aspiring models and actors, charging them up to $1,500 to post their pictures on its Web site, instead of providing active representation.
The disgruntled clients claim that Trans-Continental deceives them into believing it will help them get modeling or acting work, rather than just posting their pictures in a database.
In a statement, the company said: “Mr. Pearlman has investigated the customer issues lodged with TCT and found the vast majority are general issues regarding day-to-day operations and that the vast majority have been satisfied.”
But former talent scouts at the company say the claimants have a case.
“The market is as big as people with dreams,” says one former talent scout. “You get someone who is convincing to tell them, ‘You’ve got the right look.'”
According to published reports, the company rarely turns away potential clients.
Meanwhile, Dean Fryer, a spokesman for the California Labor Commission, told The Post that California is investigating whether Trans-Continental is operating illegally in that state.
“They are not licensed and they are acting in a manner which leads us to believe they are a talent agency and should be licensed,” Fryer said.
He said his office has received a number of complaints and that it is cooperating with the San Francisco district attorney’s office, which is also probing Trans-Continental.
It’s not just clients who are steamed. Former employees allege the company has misled them about how they would be paid.
Specifically, some claim they were promised a base salary, only to learn that they would remain independent contractors paid on commission.
“When they told me they couldn’t get a check to me when they said they would, I left,” one former employee tells The Post. “I need to make a living.”
Who, me?
The talent agency of Lou Pearlman, discoverer of N*Sync and the Backstreet Boys, is under investigation. Here’s what’s going on:
* The company allegedly uses as consultants two men with prior fraud convictions.
* Florida is probing allegations it dupes aspiring models and actors into paying up to $1,500 to post their pictures on its Web site.
* California is investigating whether the agency operates illegally there, a source close to the probe told The Post.