February 4, 2011

http://www.bcbr.com/article.asp?id=55913

DENVER - Former Boulder fund manager and Flatirons Bank chairman Mark Yost has pleaded guilty in federal court to seven counts of financial fraud and money laundering in a more than $5 million scheme.

Yost, 47, pleaded guilty on Thursday in U.S. District Court in Denver to four counts of making false statements to banks and to one count each of wire fraud, bank fraud and money laundering. In exchange, the government agreed not to initiate charges against him in related matters in Nebraska, Minnesota and Iowa.

Yost last week pleaded not guilty to the same charges. But he waived his right to a grand jury, which commonly means a defendant will later reach a plea agreement with prosecutors, said Jeff Dorschner, a spokesman for the U.S. Attorney's Office in Denver.

"He knew he was in trouble, so he negotiated a precharge disposition," Dorschner said. "So this is not a surprise."

Yost faces a maximum prison sentence of 30 years, but could spend as little as six or so years in prison, based on the plea agreement. He also could face fines of up to $6.75 million and a suggested restitution amount of $10.9 million. Yost is scheduled to be sentenced on April 15.

The plea agreement lays out a complex scheme of fraud in which Yost opened lines of credit worth $1.5 million at certain banks, diverted funds to his personal accounts and deceived investors by creating false fund statements from 2005 to 2010. Yost managed Yost Partnership LP throughout that time period, diverting an estimated $1.8 million in funds for his own use.

Yost also forged signatures of people he knew on promissory notes, loan agreements and bank forms. Yost Partnership LP's fund had less than $20,000 in assets at the end of 2009, according to the charge sheet against him, even though he told regulators that the fund had about $28 million.