The 'N Sync and Backstreet Boys impresario insists he'll find the next Justin Timberlake when he's released in 2029. Here, he speaks for the first time from prison where he's serving 25 years for a Ponzi scheme

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"Well, Bernie, I mean, he didn't have anything that really made money," says Lou Pearlman by phone about Wall Street pariah Bernie Madoff, sounding level-headed and upbeat in his first prison interview since his 2009 incarceration in Texas at the low-security Federal Correctional Institution (FCI) Texarkana. Pearlman, who launched Justin Timberlake's recording career with '90s pop sensation 'N Sync and is serving a 25-year prison sentence for masterminding a half-billion-dollar Ponzi scheme, wants to make it clear he's not the same type of criminal. (Madoff is serving a 150-year sentence for a Ponzi scheme worth $18 billion, the costliest in U.S. history.) 

PHOTOS: From Boy Band Mogul to Convict (via THR)

"He didn't have any real way to make money," Pearlman repeats, "but I had the music. The Backstreet Boys each made well over $50 million apiece. I, of course, got my piece, and it was very nice and very substantial." But in fact a knowledgeable source confirms that the band members never received more than $300,000 each while the former head of Trans Continental Records walked away with tens of millions. Furthermore, to fuel his extravagant Orlando, Fla.-based entertainment empire, Pearlman persuaded trusting investors-what one former employee calls the "South Florida retiree yarmulke gang"-to sink their life savings into a fleet of charter airplanes that turned out to exist only in brochures.

Pearlman continues talking about Madoff: "He was just a scamster. I don't think it was right, what he did. But I had my way to make it all right. I just didn't have my chance to do it."

How did he plan to "make it all right" to his 1,700 victims, whose combined losses have been estimated as high as $500 million? By bottling boy-band magic again-if only Pearlman was given the freedom to conduct business in prison. "I think I could have," he says. "If I was given a chance to put another band together, that would have paid everybody back. But I never had that opportunity, and that's what was very upsetting."

Since authorities caught up with him at a Bali resort in June 2007 (following a yearlong independent investigation that led to an FBI raid on his house and offices in February of that year), Pearlman, now 59, has clung tenaciously to the notion that he can conquer the charts once more. Five days before his May 2008 sentencing, Pearlman, who will be 74 when he gets out, issued a formal request to be permitted to develop bands while behind bars-all he would require was a telephone and an Internet connection two days a week. Prosecutors objected strongly, as did Judge G. Kendall Sharp, who instead ordered Pearlman to 300 months in jail-one month per $1 million he admitted to stealing-with the stipulation that his sentence could be reduced one month per $1 million he repaid.

Four years have been knocked off Pearlman's release date, now projected for 2029, but those were for good behavior. "My sentence has not changed at the moment" from repayment of funds, he says. "But it's ongoing, and monies have been recovered-close to $40 million, I believe." According to Soneet Kapila, the Chapter 11 trustee appointed to Pearlman's case, that's not far from the truth: Recovered funds total in the high $30 millions, of which about 4% has been returned to victims. "But this has nothing to do with him," Kapila emphasizes. "It's recoveries made by my efforts combined with the professionals I hired. It's not like he wrote me a check."

When not pining for his former life, Pearlman says he "walks the track, Monday through Friday, if the weather is nice. I'm also taking a blood thinner, which helps me with my stroke situation." Pearlman suffered a stroke in 2010. Prison staff got him to a hospital in time to save his life. He claims to have lost 75 pounds from walking, down to 250 after maxing out at 325. "If I would have kept on going with my lovely steaks and onion rings and fries, I'd probably be dead right now from a heart attack," says the former mogul, who at the height of his excess eschewed booze and drugs in favor of artery-clogging comfort food. "It was definitely a wake-up call," he adds. "I also help out on a separate unit where we have movies show when they come out on DVD. I also did the little Christmas choir. I helped organize that for two years."

Pearlman generally gets along with fellow prisoners, a majority of whom he characterizes as white-collar criminals and corrupt public officials. He says the inmates with whom he has the best rapport are "the intelligent ones," while he makes sure to keep his distance from "drug dealers and crazies."

Internet access is limited to emailing contacts on a preapproved list. He is permitted use of an MP3 player and may download published music. So yes, he is well aware of record-breaking pop juggernaut One Direction and boasts, "I know if I was out there, we'd give One Direction a run for their money." He reminisces about his "friendly rivalry" in the '90s with that band's puppeteer, Simon Cowell. (A spokesperson for Cowell says, "Simon hardly knows him. They were only ever introduced once, and there wasn't any kind of friendly rivalry.")

NEXT PAGE: "Justin, he matured, and some of the other guys just got a little older"

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