March 15, 2007

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  NEWS: Businessman Guilty of Fraud

  Andrew N. Yao, the young businessman behind the now-bankrupt student loan lender Student Finance Corp., was found guilty of two criminal counts of bankruptcy fraud this week. Yao, who once was hauling in $20 million annually as sole shareholder in the then-thriving loan business, was convicted of lying under oath about just under $700,000 in wire transfers to his mistress, and an additional $150,000 transfer to two Las Vegas casinos for gambling funds in the days before the Newark-based Student Finance Corp. was forced into bankruptcy and ultimately dissolved as a result.
  
  Yao's attorney did not dispute that his client lied under oath, but told jurors that Yao did not do it with the intent of misleading the bankruptcy court or creditors, but to protect his family (along with his reputation) from the fact that the married Yao was cavorting with former Playboy Playmate mistress, and lavishing her with money and gifts. Apparently, jurors agreed with the prosecution's argument that no reason is a good reason to perjure oneself, and convicted Yao.
  
  Yao lied to a judge in bankruptcy court in 2003 as part of review proceedings, claiming that the $669,000 in wire transfers to "A. Karlsen" were for routine repair and maintenance on his two airplanes, and that the $150,000 wired to Vegas was for a family party honoring his sickly grandfather. In fact, the former transfers were to Alexandria "Lexie" Karlsen Wolfe, Playboy's March 1999 Playmate of the Month and Yao's ex-girlfriend, who stated that she knew nothing about Yao's falsehoods, only that he had given her the money for a new car and half payment on a residence. Those in Yao's circle stated in court that Yao was known to have a huge affinity for gambling, once even losing $33,000 in minutes playing blackjack.
  
  Yao faces up to five years in prison and a quarter-million dollar fine at the time of his sentencing next week, as well as further repercussions when he goes to trial again soon on twelve separate counts of criminal fraud.
  
  
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