Former Student Finance Corp CEO Gets 5 Years in Prison for Loan Fraud
The former head of bankrupt Student Finance Corp. has been convicted
of fraud — his second fraud conviction in two years — after he was
found guilty of lying on loan documents used to secure a $25 million
line of credit for the student loan company and to obtain $7 million
in personal loans, reports The Delaware County Daily Times (“Radnor
Businessman Gets 5 Years for Fraud,” Feb. 9, 2009).
According to David Weiss, acting U.S. attorney for the District of
Delaware, former student loan executive Andrew Yao also fraudulently
obtained millions of dollars in bank loans to purchase a private
plane worth $4 million and to refinance his $3 million vacation home
in Nantucket, Mass.
Yao has been sentenced to five years in prison and has been ordered
to pay $12.5 million in restitution, Weiss said. In 2007, Yao was
convicted of bankruptcy fraud after lying about giving almost
$700,000 to his mistress, former Playboy centerfold Alexandria
Karlsen Wolfe, and about gambling away $150,000 at two Las Vegas
casinos.
In his most recent fraud conviction, Yao pleaded guilty to seven
counts of making false statements to a financial institution, and
one count each of mail fraud, wire fraud and engaging in an illegal
monetary transaction. In addition, Yao is subject to criminal
forfeiture of $1 million.
As part of the loan scheme, Yao hired an accountant to prepare
fraudulent personal tax returns for himself and his corporation from
the early 1990s up through 2002. These tax returns were different
than the actual returns filed with the IRS, Weiss said, and in many
cases, the returns overstated Yao’s income by several million
dollars.
“The sentence imposed on Mr. Yao sends an important message to all
those who would think about attacking our financial system through
fraud,” Weiss said. “His false statements led to the loss of
millions of dollars by financial institutions, losses that affected
those institutions, their employees, their shareholders and the
public.”