[cheers and applause] this is "nightline." today, boy band bonanza, monster hits and stealing hearts worldwide. while in synch and backstreet boys were blowing up the charts, competing for popularity, their music mogul manager was keeping their profits for himself. >> i was in the biggest band in the world, but i can't even afford my apartment in orlando. >> backstreet betrayal. the master manipulator cashing in big on their fame and fortune. ♪ i want it that way ♪ tell me why >> why? how? and the unbelievable how

but first the nightline 5. number one in just sixty

[ drathis holiday... ahhhhh!!! -ahhhhh!!! a distant friend returns... elliott. you came back! and while lots of things have changed... wooooah! -woah! it's called the internet. some things haven't. get ready for a reunion 3 million light years in the making. woohoo! -yeah! good evening. thanks for joining us. in synch and backstreet boys

took the stage by nagt t dominating the charts in the '90s. >> reporter: at one moment in time, they were the biggest boy bands in the universe. backstreet boys and nsync. global heartthrobs and rivals. >> backstreet fans were mad. they were like, "oh, we can't have another, you know, group like this." some girls loved backstreet boys and hated nsync and some girls loved nsync and hated backstreet boys. >> you have coke and you have pepsi. this was not the cola wars, it was the boy band wars. >> reporter: both bands were put together by record producer lou pearlman. >> hey, we signed a contract, let's move forward and let's make a lot of money together and let's make this thing happen. >> reporter: a hit maker who'd later end up in bitter litigation with the young men he made into stars. 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. >> reporter: and worse.

>> i could have emptied the federal criminal code charging him with different violations. >> reporter: lou pearlman was an unlikely entertainment mogul from queens, nework. he first made his money by selling advertising space on blimps before moving into the charter flight and helicopter business in the 1990s. >> we flew paul mccartney and wings, rolling stones. phil collins, madonna. and lo and behold, new kids on the block. i just didn't know who they were and i was just questioning how could these kids afford an airplane? and i was told these kids did $200 million in record sales and $800 million in touring and merchandising. i was like, "i'm in the wrong business." ♪ step by step >> in the early 1990s, new kids on the block. they were the biggest thing in the world. and, teenage girls went bananas for them. >> they were everywhere. they were dolls, they were towels. they were lunchboxes.

>> reporter: the huge success of new kids caught pearlman's attention. he spoke to chris cuomo on "20/20" in 2000. >> i was invited to come down to one of their shows. all the screaming. i was like, my god, what's going on here? i said, "i think i can do that. i think i can put a group like that together." >> reporter: he was living in orlando, florida where a lot of young talent was auditioning for roles at the theme parks. >> so lou puts an ad in the orlando sentinel, which reads "producer seeks male singers that move well between 16 and 19 years of age, wanted for a new kids type singing dance group." >> reporter: one by one, the boys came in...aj mclean, howard dorough and nick carter. >> i liked the sound but i'd said to them, "you really need to have five- part harmony." >> reporter: kevin richardson was playing aladdin at disney world. >> kevin came into the group and recommended his cousin brian. so that formed five guys together.

i put the money out to help them. we'd give them choreographers, we'd give them vocal lessons, we'd give them tutors. i think i'm a great cultivator. they call me big papa. >> lou does give himself a nickname, it's big papa because he's got it all covered. he's taking care of all of it. >> reporter: the band became backstreet boys and started making appearances like here on channel 6 in orlando. channel 6 in orlando. >> what is your name? >> i'm aj mclean >> john seabrook then lou books them at seaworld, which is of course a big attraction in orlando. >> make some noise for the backstreet boys! >> pearlman makes a video tape of a seaworld performance and sends it around to people in the industry. >> reporter: next the group went on a tour of high schools. >> they would do three shows a day in three different schools. they would bust out on the gym floor and the girls would lose their mind but they couldn't land a record deal. until jive records said "yes." >> hey, we signed a contract, let's move forward and let's make a lot of money together and

let's make this thing happen. >> when he signed the record deal with the backstreet boys, he not only made himself the sixth member of the band, so that he would get paid what they got paid. but he also paid himself as the manager. >> why is that so important to you? to be called one of the band members? >> well, one is i share in the income. >> money aside, money aside. >> i mean, backstreet boys is a part of my life as much as it is theirs. >> reporter: they had the band, but they still needed a hit. >> we used to call america no fan land. >> reporter: for that they turned to swedish producer/songwriter max martin who in 1997 co-wrote "quit playing games with my heart" ♪ ♪ quit playing games with my heart ♪ >> it was set with "quit playing games with my heart". five guys begging girls not to break their heart into the

pouring rain. >> reporter: they became huge in germany before breaking through back home. >> to the delight of their screaming fans, the boys do rounds on talk shows like "regis and kathie lee." >> we hoped we would be successful, but we never imagined this would happen. >> so meanwhile, while all of this work on making backstreet boys a hit is going on, lou is thinking, "hmm, this is a good idea and someone else is going to come along and try to copy this idea. why shouldn't that person be me? >> reporter: unbeknownst to backstreet boys, pearlman set out to re recreate their success with another boy band. >> at that point, i knew lou had the backstreet boys. they were out doing it, and i was like, if this guy thinks he can help me out in any way, i'll meet him. >> kris kirkpatrick had the idea, and lou backed him and made this happen. >> reporter: when the mickey

mouse club stopped production, justin timberlake became available. >> the first thing justin suggested was one of his friends from the mickey mouse club, jc, so justin kind of brought jc into the make. >> reporter: but then joey fatone joined. >> and he said i know this guy in mississippi. it was lance bass. >> in mississippi, no one ever dremts dreamt of being a successful musician. it was out of the cards for someone like me. >> reporter: until a phone call changed his life. >> i arrived, 14 year old justin timberlake looking real cool and sly. then they have lou pearlman, and they pull up in the rolls-royce limo, that's how i'm introduced to this whole world. >> reporter: the five became 'n sync and would go through the same boot camp as back is street boys. >> if wt was so hard, and it rey took us months to focus on that

and learn thousand dance without being out of breath. >> i would come watch and be there to make sure they're getting the best training, that they're getting pampered with every possible need. that is what i did. ♪ every beat ♪ >> so the first show we ever did was a showcase we did at pleasure island. and we just did some of the songs that we had. >> reporter: like back street boys, 'n sync needed a record deal. >> every record exec out there turned us down. huh-uh, nothing like this would ever work no america. this is way too cheesy. >> reporter: it always amazes me that 'n sync took almost the exact same route to fame as backstreet boys. they, too, went to europe. they, too, went to max martin to record. >> max martin writes the song for them, which is "i want you back." ♪ tell me what to do now

♪ i want you back ♪ tried to say i'm sorry >> reporter: and then they get a big break in the states. a disney concert special in 1998 that back street boys turned down. >> it was incredible. and that one gig right there to me is what made us in america. >> and the disney channel plays that concert over and over and over again. >> reporter: creating a rivalry. >> backstreet fans were mad, they're like, oh, we can't have another group like this. >> almost from the beginning, lines were drawn. some girls loved backstreet boys and hated 'n sync. and some girls loved 'n sync and hated backstreet boys. >> i love you! >> yeah! >> when backstreet boys found out that lou was the manager behind that great east rival, they were outraged. >> reporter: with the competition between the two bands heat being uing up, both

soon discovered he was holding out on their fortune and fame. >> i knew something was wrong. >> reporter: when we come back. upbeat music♪ no cover-up spray here. cheaper aerosols can cover up odors in a flowery fog. but febreze air effects eliminates odors. with a 100% natural propellent. it leaves behind a pleasant scent you'll love. [ deep inhale] freshen up. don't cover up. febreze. this is charlie not coughing because he took delsym 12-hour. and this is charlie still not coughing

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>> he believed hundred you had five members and a guy for every girl. >> they'd find something in nick. they'd find something different in kevin. >> 'n sync was in some ways more relatable than backstreet boys. >> our clothes were just horrible. they were always yooversized. no one really care. there was never a stylist, no, here's a rack, we're putting new this, that's it. >> reporter: even pearlman became a celebrity. >> he would be at their shows and be like big papa, it's lou! he wanted to be a star. >> reporter: the band started to wonder why they hadn't ever seen a paycheck. >> we were getting our $35 perdiem. i was no the biggest band in the world and selling millions of records, and someone's make millions and millions, but i can't even afford my apartmentna orlando. >> reporter: lance bass thought a celebratory dinner would be

what he'd been waiting for. >> we had these envelopes sitting in front of us, and i knew my life was going to change. a million dollars would have been oh, my gosh. that's what i thought we deserved. then we opened up the check, and it was $10,000. we went back to the hotel room, and that's when it hit me. i was so disappointed, and i ripped up the check. ♪ quit playing games with my heart ♪ >> reporter: backstreet boys were the first to take pearlman to court. >> he said we are getting mistreated, and there's something wrong. >> backstreet's out there bringing in millions and millions of dollars, and then they find out lou has taken $10 million for himself and left $300,000 for them to split amongst themselves. they said they began to feel like indentured servants. >> when brian littrell filed a lawsuit, lou felt i'm not in the wrong, i spent $3 million, they

haven't paid me back. >> the backstreet boys hadn't worked, i would have eaten the buck. that was a lot of money i put up. >> when we wanted to renegotiate, it was a hard no. that's when lou changed from jolly lou to here's business lou. >> reporter: the man they all looked up to as a father figure was ripping them off. >> how much was lou pearlman taking overall from what 'n sync was making? >> i still don't know the answer to that question. >> do you know that it's more than 20%? >> i know it is more than 65%. >> lou sued us for our name. he was the sixth member of the group, and he owned the name 'n sync. that's why we ended up in court. >> reporter: they reached an agreement, both bands ousting him as manager, but he walked away with settlements that continued to provide an income. >> when 'n sync breaks their contract, they celebrate with their album "no strings

attached." >> it had 1000% to do with lou. we were in a cab in london, talking about the next record, and i said, you know, there's no strings attached anymore, and jc goes, i'm going to write a song about that. >> reporter: pearlman wanted to stay in the game, so he tried to recreate the boy band magic again, this time with make being the band which first aired on abc. >> it went from how the members were selected to eventually them signing their record contract and releasing records. >> that's how he creates the band out sound. >> the first thing i thought of when i saw making the band was happening, i felt sorry for the band, basta point, i knew who pearlman was. >> reporter: while pearl man's boy band empire was faltering, his other business dealings would prove to be his undoing.

transcontinental had a component that allowed regular people to invest with him. >> right away we trusted him. they had pamphlets showing us fdic approved. >> reporter: but the savings plan he sold to investors like jean was a lie. >> i said lou, i waupnt to get some money out of my account. he says i can't get that to you right now. then the following month there was no check again, that's how it started crumbling. >> reporter: the st. petersburg times exposing the fraud. prosecutors in florida start to investigate and determine that he was likely involved in an estimated $400 million investment and bank fraud scheme. >> about eight days after i opened up our investigation, lou pearlman fled the country. >> i didn't really understand the whole lou pearlman empire until he was on the run, basically. i just couldn't believe it.

you know, i was like, really? >> reporter: investigators looked for evidence at his home and his transcontinental offices. >> transcon was a con, all the way through. transcon airlines had no airplanes, had no employee, had no revenues, no contracts with airlines. >> reporter: now a film maker, lance bass produced a documentary, the boy band con, which revealed that a marketing photograph of a plane from pearlman's airline was really just model planes from a childhood friend. >> time and time again we are finding there wasn't any kernel of truth to anything to whatsoever. and it got easier for us to think and assume everything is fraudulent. >> reporter: the problem, authorities didn't know where pearlman was until a tourist spotted him in bali. he was found and taken to guam where he's arrested and brought back to the states to face charges. >> he pled guilty conspiracy to commit bank fraud, money

laundering, bankruptcy fraud and ordered to pay $300 million in restitution and to pay a $200 million forfeiture judgment. he was sentenced to 25 years in prison. >> reporter: he died in prison of heart failure in 2016. he was 62. >> i was so confused on exactly how to feel. i'm like, how could you die right now when like we don't have this closure. you need to apologize. >> lou pearlman stole from so many innocent people, ruined their lives. he's got what he deserved. >> i doubt, you know, there would have been a band without him, but the work that was put into it, i mean, i almost died for this band. pretty sure the other four guys would say the same thing. we are the band, not lou. >> you can watch much more on

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and finally tonight, pure joy. 4-year-old brantley of dallas, texas had one wish this holiday season, see snow for the first time. so santa and the make-a-wish foundation enlisted a modern sleigh ride to denver, where with st. nick and a few elves, brantley's frosty dream came true. holiday cheer. that's "nightline." thanks for staying up with us. have a great weekend. goodnight, america.