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Investors' cash gets stuck in plan
By HELEN HUNTLEY
Published December 21, 2006
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[AP Photo]
Lou Pearlman is best known as the founder of several boy bands, including *NSYNC and the Backstreet Boys.
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Floridians trying to get their money back from entertainment entrepreneur Lou Pearlman's controversial investment savings plan have been put on hold indefinitely. Pearlman's Trans Continental Airlines of Orlando notified investors this week that it has stopped processing withdrawals from its "Employee Investment Savings Account." The unusual investment promises high yields with no risk, a combination particularly appealing to retirees. However, withdrawing money has become increasingly difficult. At least one investor has been trying for five months without success. "We have experienced some administrative setbacks," the company said in a form letter signed by vice president Harry Milner. "We anticipate a resolution soon after the first of the year." The Florida Office of Financial Regulation is investigating the program, which was the subject of a story in Sunday's Times. In the Tampa Bay area, two of the largest promoters were Churchill Financial in Clearwater and Seminole financial planner Ross Dickson. Milner's letter offered reassuring words: "The good thing is that your money is secure and on deposit." However, worried investors have been calling the Times, including one who said he mailed Trans Continental a $300,000 cashier's check last Thursday. "I'm heartsick," said Rick Cassidy, who said his bank told him he couldn't stop payment on the check. Several investors said their sales agent told them this week that Trans Continental's bank had frozen accounts for the savings program. When the Times attempted to verify the information, Trans Continental's only response was that investors should call the company. The state's Office of Financial Regulation can be reached at 813 218-5321 in Tampa. Danielle Brooks is the investigator. Helen Huntley can be reached at hhuntley@sptimes.com or (727)893-8230.
[Last modified December 20, 2006, 23:12:16]
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by Joe
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01/19/07 05:11 AM
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I have been advised by Greenspoon Marder attorneys in Orlando that Pearlman has filed bankruptcy three weeks ago in Orlando. I am awaiting the case number...There are 44 judgements against him at this time..I appreciate anyone having more info
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by Janet
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01/04/07 06:23 PM
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I am an investor at Transcontinental. Not one phone call has been returned in over two months, including phone calls to Mandy Newland, executive director. So, therefore, no way of making an appointment to be meet with them.
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by Les
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12/29/06 03:14 PM
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Pearlman's Ponzi? No need to panic if all the money is where Lou says it is, that is. But really now, are there any planes? Why the 1999 Chapter 11? How could his airline lose $1.8 million when his infamous talent scouting business went bust in 2003.
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by Adam
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12/22/06 05:39 PM
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My family and I have always received distributions on request. Additionally, the office is always closed during the last 2 weeks of the year. I feel like these articles are causing unnecessary panic. Please secure all facts before scaring people.
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