Anchorage Daily News

The former Rhodes scholar accused of defrauding student loan companies of hundreds of thousands of dollars will get a free lawyer to defend her case.

U.S. Magistrate Judge Deborah Smith sided with Rachel Yould, 37, in a court proceeding on Thursday and agreed she did not have enough money to hire a private attorney.

Prosecutor Retta-Rae Randall unsuccessfully argued earlier this week that Yould, a former Fulbright scholar and Oxford University Ph.D. candidate, had plenty of money to afford her own attorney. She said Yould, who grew up in Anchorage, had hidden assets and was stashing money in an offshore account in Guernsey, off northwest France.

It was the first showdown in the bizarre case in which federal prosecutors say Yould is a fraud who used student loan companies like her own private money tree, while Yould says she's just a Ph.D. candidate, now a professor in Japan, a nerdy academic who took out a lot of loans to pay for an expensive education.

Yould faces 10 counts of fraud.

The case centers on Yould obtaining a second Social Security number. She got the number through a federal program for victims of domestic violence. The program allows victims to create a second identity to hide from stalkers and abusers. In Yould's case, the alleged abuser is her biological father.

On Tuesday, Judge Smith asked for details of that abuse to explain why Yould was still so scared that she has been switching safe houses every night since returning to the United States to face the charges.

But no details were offered Thursday. Yould agreed to month-long stays at temporary houses, and to always let the court know where she was. That satisfied the judge but denied those in court an explanation of what Yould claims drove her to create a second identity and leave the country.

Because her assets and financial portfolio go to the heart of her defense, Yould requested the Thursday court proceeding about whether she could afford a lawyer take place in private with just the judge. Even the prosecutor was asked to step outside while Smith talked to Yould and a temporary lawyer for about 20 minutes.

Federal prosecutors say Yould took out $680,000 in student loans to attend institutions like Stanford University and Oxford University. They say about $270,000 of that was obtained illegally from 2003 to 2006 -- it was not only above her lifetime maximum allotment for the subsidized student loans but it wasn't even used for education, they say. Instead, she used the money to boost her investment portfolio and start a business, they say.

Yould says she may not have been attending classes but she was a student working on her Ph.D., and everything was spent on education. She thought the money she obtained was legal and blames the Social Security program that gave her the second Social Security number for giving her bad advice.

Yould is scheduled for trial June 15.

Find Megan Holland online at adn.com/contact/mholland or call 257-4343.

ADVERTISEMENT