Lou Pearlman Admits Role in Ponzi Scheme

Fox News reports that prosecutors released a 47-page plea agreement signed by Pearlman in which he admits to running scams that defrauded investors and major banks out of more than $300 million.

Pearlman is scheduled to plead guilty in Orlando on Thursday to federal charges of conspiracy, money laundering and making false statements during a bankruptcy proceeding. He has also pledged to help investigators prosecute his accomplices and try to recoup millions of dollars for his victims. As part of his agreement, Pearlman must make full restitution to his victims and forfeit money and several vehicles.

A federal judge will later decide Pearlman's punishment, which could be up to 25 years in prison and $1 million in fines.

It is alleged that Pearlman established a company known as Transcontinental Airlines Travel Services, which he and others used to sell shares of the company, duping investors into believing that it was worth millions.

Prosecutors say Pearlman accepted $118 million in investments into the employee savings account between January 2003 and December 2006. He returned roughly $43 million to investors, but distributed more than $38 million to himself and an entity called Pearlman Enterprises.

Pearlman has been in an Orlando jail since being returned to Florida in July 2007.