Onetime boy band producer Lou Pearlman is telling friends that he has been considering a plea agreement that would bypass a trial but could result in a sentence of up to 25 years in federal prison.
"He's between a rock and a hard place," said Dave Hedrick, the owner of an Orlando-area audio video business who has been one of Pearlman's most frequent visitors at the Orange County Jail. "If the judge says 'I'll give you 10,' he has something left of his life. A 25-year sentence, that's almost a life sentence for him."
Pearlman, 53, is scheduled to go to trial in April on federal charges of bank fraud. However, prosecutors have said they plan to file additional charges against him. That would most likely delay the trial, providing an additional incentive for Pearlman to strike a deal.
No charges have been filed yet regarding the massive investment scheme Pearlman ran for years through his Orlando company, Trans Continental Airlines. Investors who thought their money was FDIC-insured discovered it was missing last year, and so was Pearlman.
He fled the country in January 2007 owing investors and banks more than $500-million. Although he was captured last June in Indonesia, only about $2.4-million has been recovered by the bankruptcy trustee searching for his assets.
Federal prosecutors declined to comment on plea negotiations. "It would not be appropriate for us to make any comment on discussions we may or may not be having with Mr. Pearlman," said Steve Cole, Tampa-based spokesman for the U.S. Attorney's Office in Central Florida.
While federal prosecutors, Pearlman and his public defender may agree on a deal, it will be up to U.S. District Judge G. Kendall Sharp to decide what kind of sentence will be handed down. Federal sentencing guidelines must be considered, but are advisory.
"The primary reason to enter a plea agreement with the government is that you hope to get a sentence reduction based on your substantial cooperation," said Tampa criminal defense lawyer Lori Palmieri, who is not involved in the Pearlman case.
She said sentencing occurs at least 75 days after the plea to allow time for a presentencing report to be prepared and reviewed. Victims can write letters and attend the sentencing. Palmieri said federal prisoners must serve at least 85 percent of their sentences and should expect to serve 100 percent.
"Whatever he gets, he deserves more," said St. Petersburg investor Monty Montgomery. "Twenty-five years sounds significant, but what really counts is the money and lives he ruined and people he ripped off who will never get paid back no matter what he gets."
Some investors say they'd rather have their money back than to see Pearlman locked up.
"They ought to squeeze him until he fesses up," Clearwater investor John Leritz said. "What good is he going to do us in prison?"
Investor Hal Stayman of West Palm Beach called Pearlman "a total disgrace," saying, "I can't think of anything that's bad enough for him."
Hedrick declined to provide additional details of the plea agreement Pearlman is considering. He said he still believes Pearlman is "innocent until proven guilty," but "I'm a true believer if you're innocent you don't take a deal. If the evidence isn't there, you shouldn't be convicted."
Hedrick spent thousands buying Pearlman's possessions at two auctions conducted by the bankruptcy trustee. He currently has many of those auction items for sale on eBay, including Pearlman's "World Connection Award" presented by Mikhail Gorbachev.
Helen Huntley can be reached at email@example.com or
(727) 893-8230. Go to blogs.tampabay.com/money to read more about the Lou Pearlman case.