The swindler behind two of the biggest boy bands in history

Lou Pearlman created Backstreet Boys and *NSYNC, and cashed in big on their fame at the groups’ expense.
4:23 | 12/13/19

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Transcript for The swindler behind two of the biggest boy bands in history
Back now with the inside story of the man behind two of the biggest boy bands ever. Lou Pearlman created the backstreet boys and 'nsync and cashed in big on their fame at their expense. Chris Connelly has part of the story thaw didn't know. Good morning, Chris. Reporter: Good morning. It's quite a story. It was back in the '90s when the backstreet boys and 'nsync were put together by Lou Pearlman. Sweet harmony on stage but discord behind the scenes as the guys topped the pop charts but weren't getting paid. Turned out there was a lot going on that nobody knew about other people's money and the manager they called big papa. He was the man behind some of the biggest boy bands ever. Including two of the biggest juggernauts of all time. Backstreet boys. Backstreet's back all right Reporter: And 'nsync. Every little thing I do never seems enough for you Reporter: The strangest part of the whole boy band world is that the two huge boy bands were created by this great big dude from queens who made his money from blimps. Reporter: In the early '90s Lou Pearlman was running a blimp business when he decided to wade into the boy band business. After seeing the hottest act of the time, new kids on the block. Step by step I was invited to come down to one of the shows. All this screaming. I was like, my god, what is going on here and these girls in these t-shirts and hats and chains and posters. It's like, man, this is exciting. Not to mention there is a tinkle to the cash register. Reporter: With a keen eye for casting he launched backstreet boys and later 'nsync. Both groups skyrocketing into the stratosphere. The money started rolling in for Perlman, but for the bands, something didn't add up. I was in the biggest band in the world and selling millions of records and someone's making millions and millions but I can't even afford my apartment in Orlando. I couldn't even get a car. Reporter: Backstreet is out there bringing in millions and millions of dollars and then they find out that Lou is taking 10 million for himself and left 300,000 for them to split amongst themselves. They said they began to feel like indentured servants. Reporter: They all wound up in highly publicized legal battles. When we wanted to renegotiate it was just a hard no. That's when Lou changed from jolly Lou to here's business Lou. Lou sued us for our name. He was the sixth member of the group and owned the name 'nsync so he took our name so we could never use it. That's why we ended up in court. Reporter: It wasn't just music where he was raking in the cash. At the same time Perlman was luring investors into what he claimed was an empire. Under a brand he called trance continental. Trance continental companies is a conglomerate. What we have is transcontinental airline, foods, entertainment. Reporter: But Roger hanburg says it was all part of a big fraud. Transcon was a con all the way through. They had no air plain, no employee, no revenues. Had no contracts with airlines. Reporter: In the documentary "The boy band con: The Lou Pearlman story" produced by Lance bass of 'nsync, Perlman's childhood friend shows how Perlman was able to perpetrate a con by using a model 6747, a real airport and some deceptive photography. We never ever flew on a trans continental airplane. Would fly over to different places in Europe and always be on these delta flights, you know, in coach and I always thought it was weird that someone that was in the airline industry couldn't help us out a little bit getting to places. Reporter: Authorities believed Lou Pearlman had engineered a massive Ponzi scheme and went after him. Eight days after I opened up our investigation Lou Pearlman fled the country. You'll hear a while lot more tonight. Good times with two beloved groups of 9 late antidepressants 90s and the fraud and deceptions of Lou Pearlman that shocked band members and shattered lives. Guys. Fraud, deception, a lot of greed. You can see more during the two-hour "20/20" event "The hit man: From pop to prison."

This transcript has been automatically generated and may not be 100% accurate.

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