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Depending on whom he talked to, Yaeger explained his cash flow by saying that he had inherited a hefty trust fund from his deceased father or that he had won a lawsuit resulting from botched laser eye surgery. "Kevin was good at not having more than two people know the same thing, which made it impossible to know what was true," former coffee regular Steven Hildreth says. "But he always had the ability to come up with money no matter the circumstance, so I had no reason to question it."
It was true that Yaeger's father had died, though there was no inheritance. No one knows for sure where Yaeger got his money at the start, before his Internet companies were up and running. Many friends have their theories. And investigators -- who are still working to solve the mysteries surrounding Yaeger's career of deceit -- do too.
One thing was certain: Yaeger was -- and is -- obsessed with youth and beauty. "The type of guy I'm attracted to is not attracted to me," he says. "And I understand how they feel, because I wouldn't want to date someone who is heavy or older, either."
Everyone in the coffee club faced the same dilemma: The transition into adulthood was hard enough without the added complexities of being gay, especially at a time when society was much less accommodating. But Yaeger didn't grow up. "Kevin can be sweet, funny, and nice, but there is a dark side to him. I haven't seen someone so insecure since Charlie Sheen in Wall Street," Schwab says. "He wanted status and to be a player. The more things he got, the more confident he became. That was his passion: more money, bigger house, better car, more boys."
All around him in Silicon Valley, Yaeger could see men his own age founding high-tech companies, minting millions, being lionized as celebrities on the covers of magazines. Everyone was getting rich. Jerry Yang and David Filo of Yahoo! were heroes of the new economy. It was hardly surprising that Yaeger wanted to make it in a culture that held up young men who were basically geeks as something akin to rock gods. What was surprising was how far Yaeger was willing to go. "We always knew he was a wannabe," Schwab says. "But not a crook."
It turned out Yaeger's dot-com companies, Priority Web and Cyberpop, didn't do anything -- or, at least, nothing very legitimate. And when those endeavors didn't adequately support his lifestyle, he resorted to check kiting and counterfeiting schemes to raise quick cash.
In January, he was convicted of grand theft by the Santa Clara County Superior Court for stealing nearly $40,000 from the computer company Acer America using phony invoices. He was sentenced the same month to a one-year jail term in Milpitas. Yaeger celebrated his 28th birthday last month in the L.A. County Jail. Prosecutors in Los Angeles extradited him to face charges that he set up a fraudulent Acer bank account there in which he deposited more than $100,000 in bogus checks.
Yaeger pled guilty to that felony last week. How much jail time he serves will depend on whether he can pay restitution. And investigators have intimated there will be additional federal charges because Yaeger's Internet ventures crossed state lines.
The party house on Old Adobe Road -- nicknamed "the den of iniquity" by Los Gatos police because neighbors complained about the activity there so frequently -- doubled as Yaeger's company headquarters. Young men earned their keep at a phone bank, soliciting customers to sign up for a new Internet service provider that promised unlimited access to the net for $9.95 a month, but didn't really exist. The same angry customers who found their attempts to dial into Priority Web somehow never resulted in the high-pitched warble of a modem connection also allege their credit cards were billed not $9.95 a month, but $99.95. Conveniently for Yaeger, companies like Visa and American Express don't bother to investigate dubious charges under $100.
"He's got his finger in every type of fraud imaginable: false impersonation, bank fraud, wire fraud, money laundering, and plain old grand theft," says James Wagner, a San Jose police detective who followed Yaeger's money trail for nearly two years. "He's a one-man crime wave."
Even Yaeger's mother, Stella Ray, ended up serving seven months for helping her son embezzle from Acer, where she worked as an accounts payable supervisor. Yaeger admitted stealing invoices from his mom, filling out fake work orders, and returning them to her inbox. Ray processed and issued the checks, which were sent to addresses belonging to her son, though she says she did so unwittingly. The family's unfortunate involvement didn't end there, either: Yaeger leased a half-dozen cars for his trophy boyfriends to drive using his brother's name.
Then there were Yaeger's friends. He convinced several of them to set up credit card accounts that he was authorized to use, telling them he had an Internet business plan that would turn his and their lives around, if only he could circumvent his bad credit. All of them believed their lent credit would be used to purchase the computers, software, and office supplies Yaeger needed to get his business started, and that he'd reimburse them and share a generous piece of the profits.