Learn English – Meaning of the quote “As Above So Below; As Within So Without”

OP probably came across the Facebook page Life Is Too Funny To Take Seriously or something similar.

The basic format X is too funny to take seriously (or more often, ...to be taken seriously) can be applied in many contexts. Obviously it would be a completely pointless thing to say about something intended to be funny/amusing (a slapstick comedy sketch, for example). So there's always some "tension" between two ways of looking at the thing (if your mother slipped on a banana skin that might seem funny to many, but probably not to you - certainly not to her - if she broke her back and was paralysed for life).

One well-known (but arguably, sick) example is The Darwin Awards (people who actually die doing stupid things, and hence improve the genetic stock of humanity by removing themselves from the gene pool). The general sentiment (for those not personally involved) can be summed up by the oft-quoted...

If you didn't laugh, you'd cry.
or
You've got to laugh, haven't you?

The definition of defraud is "to take something from someone by fraud." The direct object of the verb is the one who lost something. The preposition of is used with this verb to indicate what was taken. So, we can roughly reword the sentence as follows:

They defrauded students of sizeable sums of money.

They took sizeable sums of money from students through fraud.

The phrase with of is optional; you can leave it out, in which case you are not specifying what was taken.

They defrauded students.

They took something from students through fraud.

There are other verbs with similar meanings that use out of for this relationship, to say what was lost.

He cheated her out of her life savings.

They were tricked out of their land.