The New York State Consumer Protection Board (CPB) is hounding Louis J. Pearlman—the Florida-based music promoter responsible for teen bands the Backstreet Boys and *NSYNC—for alleged model-scouting scams in Manhattan and Buffalo through the Wilhelmina Scouting Network, now called the Web Style Network.
Meanwhile in Los Angeles, the Screen Actors Guild's (SAG) legal department appears set to investigate Pearlman's and other managers' activities with actors.
Pearlman's model-scouting efforts—which include franchise offices nationwide as well as a website—also brought a lawsuit from the established Wilhelmina Models agency to make Pearlman's firm stop touting the Wilhelmina designation. The agency last March had licensed the scouting network to use its name.
According to an Oct. 15 filing with the federal Securities and Exchange Commission by Pearlman's parent corporation, Trans Continental Entertainment Group, Inc., Pearlman's firm and its franchisees nationwide have ceased to use the name Wilhelmina Scouting Network. Instead, "the company has adopted its legal name Trans Continental Talent and the trade name Web Style Network" for its website and franchises.
However, the state CPB issued a warning last week that Pearlman's Wilhelmina Scouting Network had "changed its name to the 'Web Style Network' in a bid to avoid negative publicity and continue its misleading sales practices."
According to the CPB, Pearlman and his Florida-based company Trans Continental Talent (TCT) control the scouting network. Last month, the state agency issued its first consumer warning against TCT. "Since then, TCT and one of its leading franchisees closed the Wilhelmina Scouting Network's Times Square office in Manhattan and 18 others across the country," the CPB reported in a press release last week.
Jon Sorensen, a press spokesperson for the CPB, told Back Stage on Monday that a single firm called United States Talent Company had operated those 18 offices in other states. He said his agency conducted a public hearing in Manhattan on Pearlman's scouting network earlier this month, and had scheduled another hearing in Buffalo for Oct. 21.
"We want this scam out of New York state and we want their Western New York office closed by the time we get to Buffalo next week," CPB Chairperson and Executive Director Teresa A. Santiago said last week. "Our investigation has already led to the closing of their New York City office. Now we're focused on their Amherst [NY] operation and our message is simple—you have one week to get out of town."
CPB's Sorenson said Monday they were still awaiting word whether the Amherst office would be closing.
Santiago said that the scouting network's name change to the Web Style Network was the firm's ninth company moniker in four years.
"No matter what they call it, this is still a misleading, overpriced, and high-pressure sales operation that has young people walking a gang plank instead of a fashion runway," Santiago said. "The Wilhelmina Scouting Network has pressured young people and their parents into spending upwards of $2,000 on a high-priced website 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."
For an upfront fee of $995—plus an additional monthly fee of $19.95—WSN will post photographs of a prospective model on a website, the CPB notes. "The company charges hundreds of dollars more for photographers, clothes, makeup, and other expenses. Clients say they are later pressured into paying hundreds of dollars for more photographs and so-called modeling competitions. WSN is now pushing its customers—some as young as six—-to attend a trip to Orlando for a so-called modeling competition called Fashion Rock. The per person charge is $1,800."
Back Stage on Tuesday spoke with Pearlman's assistant at his office in Orlando, Fla., but hadn't heard back from Pearlman by press time.
Website Wants Models, Actors
An Internet check on Monday for the Wilhelmina Scouting Network turned up the web address www.wscouts.com. Clicking that address leads to WSN or "Web Style Network." A box immediately flashes up, reading, "In order to more accurately describe who we are and to better serve the needs and goals of ALL our customers, we are pleased to announce that we have changed our name to WEB STYLE NETWORK (WSN). We believe this name better encompasses the broad range of services, resources, contacts and expertise that we offer to those who aspire to succeed in the fields of acting, music AND modeling. Working together we will continue to use the web and other media when appropriate to convey to the world YOUR individual style and talent in the most efficient and imaginative ways possible."
The website includes individual pages for models, actors, and musicians. Each page contains a headshot, or a group photo for a band, and a description of the performers. Models and actors are listed either with first name and initial along with a serial number, or by full name and serial number. The site features 19 actors, ranging in age from 7 to their 70s.
It also features the recently completed South Beach Superstar Search, and a Fashion Rock "Holiday Fest" to take place in mid-December. A section on the South Beach event states, "More than 2,900 aspiring models, actors and vocalists from around the world gathered in Miami Beach, FL to compete for more than $250,000 in contracts. During the three-day event, talent gained exposure to more than 100 of the world's top agents, recording executives, casting directors and other industry professionals…." The site lists 12 winners in "top" categories for actors, models, and vocalists.
"WSN is not an agency," the site states, "but a service whose clients include more than 1,000 casting directors, licensed talent and modeling agencies and other industry professionals who are seeking fresh and new talent…WSN is the world's largest database for up-and-coming talent. With its pioneering web-based approach, WSN provides aspiring models and actors the opportunity to be seen by industry professionals around the globe, all without ever having to leave their hometown. WSN is the website dedicated to providing models and actors from around the globe with the chance to be discovered."
SEC Report Sheds Light
Trans Continental Entertainment Group's report to the SEC, covering the quarter ending Jan. 31, 2003, refers to Trans Continental Talent Inc. (TCTI) as a corporation marketing and operating "an online database of actors and models." The report says Pearlman is chairman of TCTI and its parent.
The SEC report further states, "The Company's target market is young adults of between 18 and 24 years of age," and the firm "relies on independent contractor scouts to identify the majority of its customers…The Company compensates all of its salespeople and all of its independent contractor scouts with a per sale commission…TCTI's salespeople receive a base salary that is paid if it is greater than commissions due to them…."
The birth of TCTI appears to have occurred in September 2002. At that time, Edelman PR Worldwide issued a press release stating, "Trans Continental Entertainment Unit, one of music impresario Lou Pearlman's entertainment companies, and Options Talent Group, Inc.... announced a strategic merger to create the world's largest music, acting and model scouting company…named Trans Continental Entertainment Group, Inc."
The release said that the subsidiary Trans Continental Talent, Inc. "will feature more than 70 offices worldwide, the largest team of scouts in the talent industry, and some 75,000 images of professional and amateur models and actors on file…."
While the release boasted a grand future, Trans Continental Entertainment's SEC report showed a January 2003 financial statement of assets and expenses coming to only $41,913. "The results of operations for the six-month period ended January 31, 2003 are not necessarily indicative of results to be expected for the entire year," the report said. The company has yet to issue another quarterly financial report in 2003, stating in this year's SEC filings that it is involved in changing auditors.
Petersen Pouncing
Actor Paul Petersen is a child-performer advocate and a member of the Screen Actors Guild's national board of directors. He told Back Stage on Monday that—at SAG's plenary council meeting last weekend—he had brought up the New York CPB's actions involving Pearlman's firm to SAG's legal department and to Hollis Batchelor, SAG's deputy national executive director for organizing, education, and branch management.
"We're on the warpath about this," Petersen said. "SAG's staff was very positive in responding. This is a person well known to us, especially at AFTRA [the American Federation of Television and Radio Artists], because of recording contracts. We want this to stop."
Petersen said he has also been in touch with the Los Angeles city attorney's office, which was instrumental in passage of a California state law creating both civil and criminal penalties for management scams.
Petersen has worked with SAG, city, state, and federal government officials in efforts to create child-performer protection laws. His and SAG's, along with AFTRA's and Actors' Equity Association's efforts, recently paid off in New York state with a new law securing child-performers' income and education.
Petersen had an indirect run-in with Pearlman in 2002 over the youth band Take 5. Parents of the two younger members of Take 5 filed a complaint against Pearlman with the Florida Deptartment of Labor. Petersen said he counseled the parents after they had filed the complaint, but the Labor Department ruled in Pearlman's favor, saying that the children weren't employees of Pearlman, but contracted partners.
In the late '90s, the Backstreet Boys and *NSYNC were engaged in lawsuits with Pearlman. And in June 2002, teen singer Aaron Carter filed suit against Pearlman and his Trans Continental Records, accusing them "of racketeering for a deliberate pattern of criminal activity in dealing with clients like Carter," according to Florida's St. Petersburg Times.
CNN reported last February that the State of Florida was investigating Pearlman and Trans Continental Talent because of "complaints that hundreds of aspiring models and actors were duped into paying up to $1,500 each for spots on his company's website… Florida law prohibits talent agencies from collecting fees up front, but the promoter said Trans Continental was exempt because it is a 'scouting' company that finds talent without marketing it."
But it isn't just Pearlman getting Petersen's gourd; it's the whole talent management scene:
"The problem we really have is that managers are unregulated and they can say and do almost anything," Petersen said. "And I'll speak on behalf of my members right now. The notion that professional performers, young and old, are paying 25% in commissions is anathema. It's got to stop."
Asked if it was common for talent managers to take 25% of a performer's income, he responded, "It's absolutely common. The gatekeepers for actors have become managers. Agents are so overwhelmed, they rely on managers to bring the best youngsters around."
Petersen added, "There are already 600 pending complaints just in Florida over these management scams. These are particularly dangerous. Managers and talent consultants—they're always careful about what they call themselves—they are bringing naïve and inexperienced children from Florida to California for pilot season at a minimum cost of $2,000. But there are others, and, mind you, they're all over the country."