He filled his houses with art and antiques, from Queen Anne walnut window slats in his French bedroom to the 18th-century George III coal grate in the fireplace. His vast art collection included an oil painting by Sir Anthony Van Dyck valued at $3.2 million.
He traveled by private jet and kept homes in Martha’s Vineyard, Washington and Palm Beach. His office included a personal dining room and private chef.
Sustaining this life was Pearl’s work in private equity and Perseus, the Pennsylvania Avenue firm he created. Pearl, its founder and sole owner, was in the business of buying and selling companies with borrowed money. Perseus has directed hundreds of millions of dollars to investments such as Converse sneakers, Ritz-Carlton hotels and book publishers such as PublicAffairs.
Now lawsuits filed by major banks that had extended him loans and his own investment firm allege fraud by the man once known for his Midas touch. Bank of America, TD Bank, Eagle Bank and Perseus have filed claims against Pearl’s estate in D.C. and federal courts.
In all, they are seeking more than $50 million.
The allegations and court actions have rocked a corner of Washington’s financial and social elite and have raised questions about Pearl’s actions in the final months of his life, after he was diagnosed with terminal lung cancer.
“At times his conviction on his conclusions seemed unshakable even in the face of evidence to the contrary,” said Fred Malek, who heads his own local private equity firm. “I’ve invested with Frank Pearl and in Frank Pearl deals over several decades, and found it profitable and found Frank to be a man of soaring intelligence. The picture of court papers does not depict the Frank Pearl I knew.”
Others who worked with him, knew him or knew of him say privately the court claims following Pearl’s death cause them to wonder whether he really was fabulously wealthy, or just lived that way.
It’s hard to know.
“Frank Pearl was like the prince of smoke,” said Bill Regardie, a businessman and the former publisher of Regardie’s, a magazine that chronicled the local business scene in the 1980s and early ’90s. “He was one of the those characters that you never really knew what he was doing. You never knew whether he had any money. He was one of those characters that floated around the businesses of Washington.”
The court documents raise many questions. Was Pearl truthful in 2009 and 2010 when he filed financial statements — including his interests in Perseus companies — to TD Bank and Eagle Bank claiming a personal net worth of more than $400 million?