Monday, February 9, 2009

Delaware Businessman Gets 5 Years For Fraud

Andrew N. Yao, 47, of Radnor, Delaware and the former CEO of Student Finance Corp., was sentenced last week to 5 years in prison for fraud. Yao was also ordered pay more than $12.5 million in restitution resulting from his fraudulent scheme to try to keep the company in business. Yao allegedly made false statements to banks for loans in the amount of some $40 million. Many of the more recent loans were used to pay off earlier ones. Meanwhile Student Finance Corp. had losses approaching $400 million and a default rate of nearly 80 percent. The company filed for bankruptcy at the end of 2002. Yao, who is married, previously plead guilty and was sentenced to one year in prison for fraudulent transfers to pay for gambling debts and his girlfriend, Playboy Pet Alexandria "Lexie" Karlsen Wolfe's living expenses. He pleaded guilty last June to 10 fraud counts in this case and admitted that he spent some of the loan money on a $4 million private plane and his $3 million Nantucket home.

Read the story here, here and here.

Read the original DOJ announcement here.

Read the Bankrupcty Court opionion here.

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