Modeling Agency News: American Modeling Industry Headlines

"Two months after Orlando's Lou Pearlman severed ties to a controversial model-scouting company, confusion reigns regarding his involvement in the state's ongoing investigation of the firm. On one hand, Pearlman says his recision of a September 2002 deal that gave him control of Options Talent has erased his involvement with the company--as if it never happened. "They are not investigating me at all," Pearlman said. But that's not how the state Attorney General's Office sees the matter. "Pearlman is still a part of the investigation," said JoAnn Carrin, spokeswoman for the agency. "We believe he is still responsible for some of the actions that took place while he was co-owner."¹

"It's difficult to say what this conflict means for Pearlman or more than 1,700 consumers who have filed complaints alleging misrepresentation by a company known by a host of names, including Options Talent, Wilhelmina Scouting Network and Web Style Network. Investigators began looking into the Internet-based model scouting firm a month before Pearlman and an associate took control--acquiring 50.2 percent of the stock--in September 2002."²

1. Tim Barker, "Pearlman says investigation of him is over but attorney general presses on," Orlando Sentinel, Jan. 1, 2004.
2. Ibid.

(Lou Pearlman, Options Talent, Wilhelmina Scouting Network and Web Style Network)

Scouting network's history troubles Pearlman

"When Orlando's Lou Pearlman took control last year of a controversial model-scouting agency, he went into business with three men who have left a trail of broken companies and angry customers. They included the architect behind a major Wall Street stock fraud, a man convicted of fraud and another whose first foray into the modeling industry prompted a lawsuit by the Federal Trade Commission in 1999."¹

"I'm sure in America somewhere those jobs existed, but we did not have them," Elliott said. "Those ads were simply made up because they drew high volume calls."²

"Pearlman said he discovered the pasts of El-Difrawi and Bell only after he had already taken the helm of the company. "I had no idea that anybody had a prior history at all," Pearlman said. "We found nothing improper at the time we bought the company."³

"Pearlman characterizes the departures of Bell and El-Difrawi as amicable, but said, "They knew I wasn't going to stand for all the negative publicity." Randell apparently surrendered his consultant's position sometime between March and July, according to SEC documents and Pearlman, who said the company has established its own merchant accounts, eliminating that reliance on Randell. Pearlman points to these departures, as well as others, as evidence of his intent to fix the company. "I can tell you right now that everything is under control," he said.⁴

1. Tim Barker, "Scouting network's history troubles Pearlman," Orlando Sentinel, Oct. 5, 2003.
2. Ibid.
3. Ibid.
4. Ibid.

http://www.orlandosentinel.com/business/orl-asecpearlman05100503oct05,0,1277447.story?coll=orl-home-headlines

(Options Talent, Lou Pearlman, Gregory McDonald, Cortes Randell, Alec Defrawy, Ayman El-Difrawi, Ralph Edward Bell)

Pearlman Cuts Ties With Modeling Agency

"Boy band impresario Lou Pearlman formally cut ties with a model scouting company that is being investigated by Florida authorities and has been the subject of hundreds of complaints of misrepresentation. Pearlman, who launched the careers of the Backstreet Boys and 'N Sync, rescinded a merger agreement Friday between his company, Trans Continental, and the model scouting firm formally called Wilhelmina Scouting Network. In a statement, Pearlman said he felt duped by the company. "His right to rescind the agreement is his legal right," said Marcia Horowitz, a spokeswoman. In October, Pearlman filed a $100 million lawsuit against the company and his former associates, alleging violation of Florida's Deceptive and Unfair Trade Practices Act, trademark infringement, trademark dilution and defamation. No one answered the phone at Wilhelmina Scouting Network's Orlando office on Friday. The Florida Attorney General's Office has been investigating the company for more than a year. More than 1,500 consumers and former workers have complained of misrepresentation and deceptive advertising."¹

Lou Pearlman: "I was duped"

"Two weeks after PAGE SIX reported that a modeling agency associated with Lou Pearlman's Trans Continental company had been labeled a scam by the state of New York, the boy-band impresario is getting out of the mannequin scouting business.... "I was duped," Pearlman tells PAGE SIX's Ian Spiegelman. "I walked into this thing, and it turned out to be a hellhole." He says that when Options honchos approached him last year about the merger, they hid their identities from his researchers. After buying 51 percent of the company, Pearlman says, "I got a call from the Florida attorney general's office saying 'we should talk a little bit.' " It turned out that several Options executives "had trouble with the law and [had done] prison time." When he asked his new associates about covering up their pasts, Pearlman says, "They told me they'd paid their debt to society, but I knew we had some problems" .... Pearlman says certain Options employees were violating company policy, and it was hard to keep track of them. "We knew we had to get rid of these people, but who were they and where were they? And they're all using my name. Everything is Lou Pearlman this and Lou Pearlman that. I said, 'I gotta get out of this. This is a mess.' " Pearlman's decision to ditch Options follows his filing of a $100 million lawsuit in Florida against several franchisees, founders and consultants for engaging in deceptive business practices, trademark infringment [sic] and defamation. "I feel as much a victim in this as anyone can feel," he said. "I invested $3 million and came out a creditor."¹

Model Agency Labeled A Scam

"Lou Pearlman, the character behind such boy bands as *NSYNC and Backstreet Boys, has officially been labled as a scam artist by the State of New York. The N.Y. State Consumer Protection Board is issuing warnings to aspiring young models and their parents that the impresario's modeling company doesn't deliver on its promises Board spokesman Jon Sorenson tells PAGE SIX's Ian Spiegelman, "The scam involves 'scouts' going to shopping malls and bus terminals and telling kids or their parents that the youngster could be a model. They are then charged upwards of $2,000 for the privilege of having their photo on a Web site and e-mails telling them about auditions that are open to anyone."¹

"The very name of Pearlman's operation, Wilhelmina Scouting Network, seems designed to mislead naive hopefuls. The actual Wilhelmina modeling agency had to drag Pearlman and his company, Trans Continental Talent, into court to force him to stop using its name for his modeling company. Early this week, a state Supreme Court judge in Manhattan issued a preliminary injunction preventing Pearlman from using the Wilhelmina name while the two parties fight over the money that Pearlman's business has made using that name. Pearlman's operation is now called Web Style Network, but the watchdog agency is not letting up."²

"Board chairwoman Teresa Santiago said, "Trans Continental Talent and its Wilhelmina Scouting Network have pressured young people and their parents into spending upwards of $2,000 on a high-priced Web site and photography package--all on the promise that this will lead to modeling jobs. "But those jobs never appear, and yet the money continues to disappear with a monthly fee of $19.95 and high-pressure sales for trips to so-called modeling conventions in Florida. These aspiring models soon learn that while they're looking up at the stars, the Wilhelmina Scouting Network is picking their pocket." The board recently forced Pearlman to close his Times Square office, but he continues to operate three more in New Jersey and many others across the country. A rep for Pearlman did not return calls."³

1. "Model Agency Labeled A Scam," PageSix, New York Post, Oct. 20, 2003.
2. Ibid.
3. Ibid.

Florida takes step for claim against modeling company run by Pearlman

"The Florida Attorney General's Office laid the groundwork last week for a claim against the assets of Options Talent, the now-bankrupt company once known as Wilhelmina Scouting Network and run by Orlando's Lou Pearlman. The attorney general filed a proof of claim in U.S. Bankruptcy Court in Nevada, where Options filed for bankruptcy. The unsecured claim was for $3.69 million for "restitution, fines, penalties," according to the document."¹

1. Tim Barker, "Florida takes step for claim against modeling company run by Pearlman," Orlando Sentinel, Dec. 1, 2003.

Pearlman rescinds model scouting company deal

"Boy band king Lou Pearlman on Friday officially repealed the agreement under which he took over Options Talent Group more than a year ago. "We are now out of the scouting business, a practice I never advocated or approved of," Pearlman says in a written statement. Pearlman explains that he rescinded the agreement because he believed he was misled by certain individuals in the 2002 deal. Under that agreement, Pearlman merged his Trans Continental Classics Inc. with a newly formed subsidiary of Options and says he lent the operation several million dollars. Pearlman's decision comes on the heels of an Oct. 23 amended complaint he filed against the model scouting company's former associates in Orange Circuit Civil Court. The lawsuit contends certain Options' franchisees, founders and consultants were engaged in deceptive and unfair business practices, trademark infringement and defamation, from which Pearlman says he suffered $100 million in damages. The defendants have not yet responded to the original complaint, filed on Oct. 10, or the amended complaint. The main defendants in the suit could not be reached for comment."¹

1. Jill Krueger, "Pearlman rescinds model scouting company deal," Orlando Business Journal, Oct. 31, 2003.

Clients Unhappy With Modeling Agency

"Wilhelmina took pictures of Krystina in their Lawrenceville, N.J. office. She was told it would cost $995 plus $19.95 a month to put them on the corporate Web site. This was a site where all of the company's potential models and actors could be seen by talent agents. Krystina's family borrowed the money. "She said my daughter was going to get jobs, like six jobs within this month," Noeme said."¹

"NBC 10 went to WSN's Lawrenceville office. The name had changed, but the franchise owner was the same. Michael Fomkin says he started his own business three weeks ago when WSN went bankrupt. When asked by NBC 10 if the Vasques's were the target of a scam, he had this response: "This is not a scam," Fomkin said. "Absolutely not. 100 percent not. I don't appreciate you using that word."²

"NBC 10 sent two producers in undercover to the agency. An interviewer told them that it didn't cost anything to sign with the agency if they had pictures. But the agency may reject their photos if they didn't like the quality. If they didn't have proper photos, the agency could do them for $995."³

1. "Clients Unhappy With Modeling Agency," NBC 10 Philadelphia, Nov. 26, 2003.
2. Ibid.
3. Ibid.

National Modeling Scam Is Focus of LI Hearing

"Last winter, Christina, 14, was approached in Roosevelt Field mall by a talent scout from the New Faces Agency. Advised by agency representatives that she had a "different look" because of her cleft chin, Christina persuaded her mother to dish out $1,000 for photos. After spending the money, the family was never contacted by the agency again."¹

"Jill Harkins of Setauket said that after her daughter Meghan, 15, was approached in the Smith Haven Mall last August, her parents were asked to be with Meghan for the interview. In the waiting room, a videotape played showing the company, New Faces Development Center of Hicksville, being interviewed by News 12. Jill Harkins said that made it seem legitimate. After paying $850 for photography and the Web site, they were never contacted again."²

1. Lisa Schiffman, "National Modeling Scam Is Focus of LI Hearing," Newsday, Nov. 18, 2003. p. A.61.
2. Ibid.

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