Nov. 14 , 2006

FORMER OWNER
OF AMERICAN ACADEMY OF HAIR DESIGN
PLEADS GUILTY TO FRAUD CHARGES

Laurie Yocum of American Academy of Hair Design also pleads guilty to tampering with witnesses and destroying records

TOPEKA, KAN. – The former owner of the American Academy of Hair Design pleaded guilty Tuesday to wire fraud and attempting to obstruct a federal investigation.

Laurie Yocum, 36, Rossville, Kan., pleaded guilty to two counts of wire fraud, one count of witness tampering, and one count of destroying records during a federal investigation. She also agreed to forfeit all proceeds from the crimes.

"Ms. Yocum obtained more than $98,000 in federal Pell Grants for students at the academy by submitting false information on applications for student financial aid," said U.S. Attorney Eric Melgren. "She also attempted to keep a witness from speaking with investigators and destroyed records that might have provided evidence of her crimes."

Yocum was indicted in May. According to the indictment, she was at one time the sole owner and at other times a part owner of the academy, which offered 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 included 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.

Yocum committed 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 and by causing disbursements to be transmitted electronically from the Department of Education to the American Academy of Hair Design.

Yocum attempted to keep investigators from obtaining information from a former student and employee of the academy. Yocum told the former student 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.

Yocum is set for sentencing March 6, 2007. She faces the following maximum penalties:

– 5 years in federal prison on each of the wire fraud counts.
– 20 years in federal prison on the count of destroying documents
– 10 years in federal prison on the count of tampering with a witness.

Melgren commended the U.S. Department of Education, which investigated the case, and Assistant U.S. Attorney Tanya Treadway, who is prosecuting.

 

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