Aug. 16, 2006

FORMER OWNER
OF AMERICAN ACADEMY OF HAIR DESIGN
CHARGED WITH WIRE FRAUD

Laurie Yocum of American Academy of Hair Design also indicted on charges of attempting to thwart investigators by tampering with witnesses and destroying records

TOPEKA, KAN. – A 38-count federal indictment was unsealed Tuesday charging the owner of the American Academy of Hair Design in Topeka with wire fraud and attempting to obstruct a federal investigation.

Laurie Yocum, 36, Rossville, Kan., is charged with 33 counts of wire fraud, one count of tampering with a witness and three counts of altering or destroying records after she learned of a federal investigation. A separate count seeks the forfeiture of all proceeds from the alleged crimes.

“The indictment accuses Ms. Yocum of falsifying information on applications for federal student financial aid,” said U.S. Attorney Eric Melgren. “As a result, more than $98,000 in Pell Grants was awarded to students of the academy who were not entitled to receive them.”

Yocum was the sole owner of the academy which offers students a course of study to become licensed cosmetologists and licensed cosmetology instructors. While she was at the academy her duties included processing all financial aid applications for students attending the academy. That includes applications for Pell Grants, which are offered by
the U.S. Department of Education to students with very low or no incomes. Recipients are not required to pay back Pell Grants.

According to the indictment:

– Yokum told prospective students of the academy she could get them more financial aid to attend the academy than they could receive by going to another school. She had students partially complete financial forms with their names, addresses and other demographic information. She also had them sign many blank documents so she could complete the forms herself.
– To make students eligible for more money from Pell Grants than they were entitled to receive, Yocum submitted false information on Free Application for Federal Student Aid forms. She falsely indicated that married students were separated or divorced, that students without children had children, that students who were not pregnant were pregnant, and that students who were living at home were living on their own.
– The false information made some students eligible for Pell Grants who otherwise would not have qualified. In other cases, it allowed students to receive more money than they were entitled to receive.

Counts 1 through 11 of the indictment charge Yocum with wire fraud by causing false information in financial aid documents to be transmitted electronically to the Department of Education’s Central Processing System in Connecticut. Counts 12 through 33 charge her with wire fraud by causing disbursements to be transmitted electronically from the Department of Education to the American Academy of Hair Design.

In count 34, Yocum is charged with attempting to keep investigators from obtaining information from a former student and employee of the academy. According to the indictment, the former student was served with a federal grand jury subpoena on Jan. 6, 2003, she notified Yocum. Yocum told her not to give the agent information about financial aid she received while attending the academy. On Feb. 7, 2005, Yocum pretended to be the former student when she called the Department of Education and said that the former student did not want to cooperate with the investigation. Later that month, at Yocum’s urging the former student gave false information to investigators.

In counts 35 through 37, the indictment alleges Yocum attempted to obstruct the investigation by destroying original records and creating new ones.

If convicted, she faces the following maximum penalties:

– 5 years in federal prison on counts 1 through 10 and 12-26 (wire fraud).
– 20 years in federal prison on counts 11 and 27 through 33, and 35 through 37 (wire fraud, altering documents).
– 10 years in federal prison on count 34 (tampering with a witness).

The U.S. Department of Education investigated the case. Assistant U.S. Attorney Tanya Treadway is prosecuting.

As in any criminal case, a person is presumed innocent until and unless proven guilty. The indictment filed merely contain allegations of criminal conduct.

##