Major arrests over ‘biggest’ global degree mill empire

Pakistani law enforcement officials raided the headquarters of IT software firm Axact in the port city of Karachi last Wednesday and arrested its owner Shoaib Shaikh and five directors of the company for allegedly running a huge global fake degree empire.

Allegedly the business included the production of hundreds of thousands of certificates from bogus institutions, as well as the establishment of fictitious accreditation bodies as part of an elaborate scheme to dupe students.

The regional director of the country’s Federal Investigation Agency, or FIA, Shahid Hayat, said the arrests were made following ‘incriminating evidence’ uncovered during what he described as forensic investigations of the company’s equipment and devices, including two servers seized during raids last week.

Criminal cases have been registered against Axact’s CEO Shoaib Shaikh and others on charges of forgery, fraud, money laundering and cybercrimes. The FIA raiding team recovered “thousands of fake degrees, diplomas and fake ID cards of students” from Axact’s Karachi office, Hayat told the media.

The raids were carried out after The New York Times newspaper ran an investigative article on 17 May alleging that some 370 websites selling fake degrees from bogus universities were being run by Axact.

According to the FIA’s ‘first investigation report’, which will form the basis of the Federal charges, Shaikh and the five managers “indulged in preparing, offering, selling, issuing fake, forged, bogus degrees, diplomas, certificates, accreditations of hundreds of fictitious universities, schools, colleges, purportedly based at different countries including the USA and Middle Eastern countries through a fraudulent online education system to foreign students.”

The report also accuses the company of allegedly establishing “fictitious and non-existent accreditation bodies” and allegedly using them “to fraudulently prepare accreditation certificates of fictitious universities, schools, colleges, in order to portray the universities, schools and colleges as genuine,” the FIA investigation report said.

Accreditation mills

During a raid on 27 May, a number of alleged fictitious accreditation bodies were uncovered, according to the FIA investigation report.

The FIA report named these as “the Gulf Accreditation Council, American Accreditation Council of Business Education, Middle East Accreditation Council, North American Distance Learning Council, Occupational Safety and Fire Sciences Commission, Central American Distance Learning Associate or CADLA, International Board of Accreditation IT Education, Universal Council for Online Education Accreditation or UCOEA, and International Accreditation Agency for Online Universities”.

The FIA’s Hayat said data from the main servers allegedly showed that no software was ever developed by the company. Allegedly, the software business was just a cover-up for the degree mills. Charges of money laundering have been added to the charge sheet against Shaikh.

Pakistani authorities have also started probing the funding sources of Axact’s Bol TV – a soon to be launched media company. The Securities and Exchange Commission of Pakistan, the Federal Bureau of Revenue and the FIA have joined hands to find out whether Bol funds came from the business of fake degrees and whether the launch of the television channel was conceived as a method of laundering money amassed through the fake degrees business.

Overseas contacts

The FIA is also seeking help from its US counterpart, the Federal Bureau of Investigation, or FBI, to investigate the fake degree business – thought to be the biggest uncovered globally to date – Interior Minister Chaudhry Nisar Ali Khan said.

According to FIA investigators, the majority of the fake universities found on the Axact computers were reportedly based in the US.

An initial list of 16 fake universities has been issued, and investigators claim most of the fake degrees had been awarded to US citizens.

Pakistan’s interior ministry has also contacted Interpol, and the governments of the United Arab Emirates and the United Kingdom to help investigate Axact company accounts. The FIA revealed that the company has eight bank accounts in countries overseas.

While the legal action continues, Dr Atta-ur-Rahman, former chair of Pakistan’s Higher Education Commission, or HEC, told University World News: “Strict action must be taken against those involved in the global level fake degree business. It is not a matter of accredited or non-accredited universities; it is a matter of altogether fake universities that do not exist except in the computers of Axact.”

The current HEC chair, Dr Mukhtar Ahmed, told University World News that strict action against sellers of bogus degrees would help make the public more aware and prevent degree mills from becoming established.

“In Pakistan, we have a special department for verification of degrees and we verify the degrees of the world’s recognised universities,” Ahmed said. Even before the current scandal was exposed “we published advertisements cautioning the public on the verification of degrees from fake agents”.

Pakistan does not have verification agents, he said. But the HEC has its own verification department in the capital Islamabad.

Axact authorities had earlier rejected all accusations as "baseless, substandard, maligning and defamatory".

The company’s website said last week: "All 10 business units of Axact are completely legitimate, legal and committed to enhancing the quality of IT services across the world."