It was a cheque that blew the lid on the duplicitous dealings of one of pop’s most controversial music managers. Having already turned Backstreet Boys into a 1990s boyband juggernaut, Lou Pearlman had become the mastermind behind ‘NSync, designed as rivals to his other band.

After three years of nonstop work and tens of millions of record sales, in December 1998, he invited the five singers and their families to an expensive restaurant to officiate over the ceremony where they would each receive their share of the vast fortune their career had generated so far.

Until then, the members of ‘NSync had lived on an allowance of $35 a day: they were giddy with the prospect that they were about to become instant millionaires. They held their collective breath and savoured the moment when their lives would change for ever, stretching out their eager hands to receive a cheque for … $10,000 each. The floor fell away beneath them.

Facebook Twitter Pinterest Three years of nonstop work and tens of millions of record sales ... ‘NSync. Photograph: Jon Super/Redferns

“That is when I knew we were being taken advantage of,” says Lance Bass of ‘NSync, now 39. “There was something wrong. We immediately started calling lawyers.” Bass and his bandmates managed to jump clear of the wreckage using a buried clause in their contracts – that stipulated Pearlman had to sign the group to a US label (they were signed to a label within the German major BMG) – to declare it null and void. The judge in the case was flabbergasted at Pearlman’s claim, that according to his contract and ownership of the band name he was ‘NSync, and therefore entitled to 90% of their earnings. She ruled for the band and the implosion of Pearlman’s empire began.

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Bass, along with director Aaron Kunkel, created the YouTube documentary The Boy Band Con: The Lou Pearlman Story to reveal how this extraordinary character became a pop kingmaker and eventually lost everything, cataloguing in unflinching detail the damage he caused, the people he ripped off and the lives he ruined. It is part disaster movie, part warning from recent history.

YouTube’s Luke Hyams calls it “one of the great untold scandals of the music industry” and says this documentary, along with Leaving Neverland and Fyre: The Greatest Party That Never Happened, are tapping into the public’s “natural appetite for drama”. He adds that Backstreet Boys and ‘NSync’s YouTube streaming figures were consulted in the commissioning process in order to weigh up demand for a documentary about these acts. It is the age of the analytics-powered documentary.

Pearlman joined a long line of svengalis who had infected the popular music industry since the 1950s. He was also the last of that breed, minting and riding the late-90s boyband wave that coincided with the record industry’s commercial peak, just before digital detonated the lucrative CD business.

Facebook Twitter Pinterest Boyband juggernaut … Backstreet Boys. Photograph: Brian Rasic/Getty Images

Pearlman used his ostentatious lifestyle to seduce people and to distract from his lies. His childhood obsession with blimps led him into the plane hire business, which he allegedly bankrolled by insuring a substandard blimp for $3m, knowing it would crash. Renting a plane to the then ascendant New Kids on the Block in the mid-80s showed him just how much money was sloshing about in the pop world, and whetted his substantial appetite for a share.

Facebook Twitter Pinterest Successful solo careers … Britney Spears and Justin Timberlake. Photograph: Jeffrey Mayer/WireImage

Having relocated from New York to Orlando, Pearlman began styling himself as Big Poppa, a man in search of a family as much as he was in search of money. He wanted to be a father figure to the groups he recruited through open auditions, which he personally funded, but he also wanted to hang out with younger people to indulge his big-kid tendencies. As with Tam Paton and the Bay City Rollers, there was a darker side. The documentary features Bass talking about how Pearlman gave him massages: “He was very touchy-feely … It always felt a little like, ‘OK, I know what you are doing.’”

It also draws on archive footage from Howard Stern’s radio show where Rich Cronin of LFO, who died in 2010, claimed that Pearlman asked the group to fondle his penis as “practice” for meetings with German music executives, though it is not suggested any of them ever did. Nikki DeLoach of Innosence (Pearlman’s only girlband, which briefly counted a pre-fame Britney Spears as a member) claims that he covertly filmed them naked on the sunbed at his house to show members of his boybands as part of a bizarre bonding ritual. “That felt pretty darn violating,” she says.

Conspicuous by his absence is Justin Timberlake, the only Pearlman artist to transcend his boyband roots with a successful solo career. Bass said he was not approached to participate as “we already had three ‘NSync members in the film”, which seems a somewhat flimsy reason. Timberlake has rarely spoken about Pearlman, although his mother Lynn Harless appears, humanising Pearlman. “I think deep down in his heart that’s what he [Lou] really wanted to be – the sixth member of the group,” she says. “I think he wanted those boys to see him that way, too. And if he hadn’t taken advantage of them, they would have.”

Facebook Twitter Pinterest Pearlman with one of his lesser-known boybands, Natural, successful in Germany and the Philippines. Photograph: Herbert Pfarrhofer/EPA

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There are strong echoes of Leaving Neverland, the documentary about Michael Jackson’s alleged abuses. Pearlman understood that charming the parents was key to putting the groups under his spell. “What we wanted to show is that the adults in the room were also duped,” Bass explains. If Pearlman had given them each $100,000 instead of $10,000 at that fateful dinner, would this have changed things? “It definitely would have prolonged his business with us,” Bass says. “I would have definitely thought we would need to renegotiate as even that [$100,000] was ridiculously low for what we were supposed to get at that point.”

When his house of cards and Ponzi schemes crashed down around him, Pearlman fled to Indonesia, but was spotted by German tourists in Bali and arrested by the FBI. His career ended in involuntary bankruptcy and he died in a federal correctional institution in Florida, the state that was once his fiefdom, in August 2016. Yet he always believed he was due all the money he grabbed: these were all his ideas and he was the one bankrolling them.

“It is a cautionary tale that we have to keep reminding ourselves of,” says Bass. “Yes, people can get called out a lot easier and quicker these days [because of social media] and the temperature is definitely cooling down, but there will always be people out there trying to take advantage of young entertainers.”

• The Boy Band Con: The Lou Pearlman Story is available on YouTube Premium.