Pearlman Agent Indicted in Tampa Federal Court for Fraud

According to federal prosecutors in Tampa, Steven B. Rodd and William P. Kress targeted 250 people in Pinellas, Hillsborough and Pasco counties as they solicited supposed investments in imprisoned music mogul Lou Pearlman’s company, Trans Continental Airlines. Rodd, a Tampa insurance agent,  was indicted last week on fraud charges accusing him of selling up to $32 million in unregistered securities.

Prosecutors said the pair targeted the elderly and did not tell investors that Rodd had been barred by the state of Florida from selling securities in 1998 and again in 2003, according to the indictment. Despite being prohibited from selling securities, Rodd and his partner allegedly began selling an unregistered security named the Employee Investment Savings Account (EISA) through two companies, the Churchill Financial Group and Oxford Financial. The EISA program was supposedly an investment in TransContinental Airlines but was fraudulent.

Rodd was indicted on charges of conspiracy to commit mail fraud, conspiracy to sell unregistered securities and mail fraud. If convicted, he faces 25 years in prison. The government also is seeking the seizure of $936,500 for illegal commissions Rodd received in the scheme, the U.S. Attorney’s Office said.

Kress pleaded guilty to fraud charges last August and is awaiting sentencing. Pearlman was sentenced in 2008 to 25 years in prison after he admitted stealing $300 million from investors and banks in a scheme that operated for more than two decades. Pearlman fled the country in 2007 when his financial empire collapsed and investors began to discover their losses. He was later captured in Indonesia and returned to the U.S. for prosecution.

Pearlman achieved fame for creating and backing boy bands Backstreet Boys and ‘NSync in the late 1990s and early 2000s.