Questions persist despite acquittal in fake degrees case

The arrest warrant issued for the former chief minister of the Gilgit-Baltistan region and leader of Pakistan Tehreek-e-Insaf Muhammad Khalid Khurshid Khan for his continued absence in the fake degree case involving fake degrees issued by Axact or institutions linked to Axact comes more than a year after a high court in Pakistan acquitted Axact CEO Shoaib Ahmed Shaikh in alleged fake degrees and money laundering cases.

Questions about the cases still circulate in legal, academic, and social circles given the prosecution’s initial claims of having “irrefutable evidence” against Shaikh and his co-accused.

Legal battles spanning eight years between Pakistan’s Federal Investigation Agency (FIA) and Shaikh, chief executive officer of Karachi-based software firm Axact, ended when the FIA decided not to challenge the verdict of the Sindh High Court that acquitted Shaikh and other company directors on 10 March 2023.

A single-member bench comprising Justice Omar Sial ruled that there was “no probability of conviction in the case lodged in 2015 and hence the accused are acquitted”. The charges were fraud and forgery-related and were linked to the selling of fake degrees and money laundering of the proceeds.

This was a high-profile case that garnered daily media attention from around the world and attracted the notice of the country’s parliament – to the extent that then interior minister Chaudhary Nisar ordered the FIA to conduct a speedy probe and apprehend the culprits.

A New York Times report by journalist Declan Walsh in May 2015, which established connections between Axact and at least 370 education websites, many of which claimed to represent online universities and high schools in the United States, spread shockwaves across the entire country.

Munir Ahmed, an Islamabad-based independent columnist, told University World News: “There are many questions that remain unanswered after the acquittal of Shoaib Shaikh in alleged fake degrees cases.”

Munir said: “Axact-linked BOL News TV was forcefully supporting ousted Prime Minister Imran Khan and was vehemently criticising the new government which came into power after ousting Imran Khan through a vote of no-confidence in Pakistan’s National Assembly.

“Then we saw [a] change in military leadership and some media gag [orders] were reported. The moment Shaikh was acquitted, a shift in coverage angles of BOL News TV was observed: it stopped pro-Khan media coverage and became neutral. There is no evidence to support this theorem, but these are the observations.”

Reportedly, the BOL TV network was later sold – in September 2023 – to another firm.

Shortly after his acquittal Shaikh was briefly held in custody by the FIA, about which an anchor person of BOL TV, Sami Ibrahim, said: “Shoaib Shaikh and BOL TV are being punished for supporting Imran Khan, PTI [Khan’s Pakistan Tehreek-e-Insaf party] and the judiciary and for raising the voice against the cruelty of the imported government.”

He was referring to the previous coalition government, led by then Prime Minister Shehbaz Sharif, which ousted the Imran Khan-led government (April 2022) through a parliamentary vote of no-confidence, but Khan claimed it was a US-sponsored regime-change conspiracy. The judiciary at that time was also considered to be pro-Khan. The same coalition government has, however, come into power again after the February 2024 election.

In March 2023, when Shaikh had been acquitted by Sindh High Court but yet not acquitted by the Islamabad High Court, BOL Newsquoted then Secretary General of Pakistan Federal Union of Journalists Rana Azim saying: “The arrest of Shoaib Shaikh is an attack on the freedom of press, adding that preparations are being made to impose restrictions on Bol News under a conspiracy.”

Various PTI leaders criticised the arrest of Shaikh. Later, he was released again and the FIA maintained that he was taken into custody for interrogation over charges he faced of bribing the judge overseeing his case in 2016.

A high-profile case

The case against Axact, about which very few people now talk, was once a very high-profile case in the higher courts and there were concerns about its effect on the country’s international reputation. However, independent analysts now question why the case was heard by a single-member bench (Judge Sial) and why the prosecution neither challenged the verdict nor filed any review petition.

The FIA had claimed to have recovered thousands of bogus degrees, stamps and letterheads of various non-existing universities, according to the First Information Report (FIR) of the FIA, based on which the accused were convicted and sentenced. However, the Sindh High Court verdict on 10 March 2023 said that not even a shred of evidence was presented to proceed with the case.

The court ruled: “The state had admitted that it could not establish any falsification of accounts, forgery, cheating, dishonestly inducing delivery of property and other allegations levelled by the prosecution.”

The judge observed that the state initiated the case claiming laurels and credit for its remarkable work, but it ended by admitting it was not able to justify its allegations. He further said that such actions have the potential to negatively impact the economy of the country.

“Citizens merely demand of the state that it gives them speedy justice. After a passage of eight years, there had not been a decision and all players in the criminal justice system were responsible for this delay,” the judge said.

Reprimanding the prime investigation agency for not working properly as the prosecution, Judge Sial said: “[The] Country’s integrity and goodwill in the international world was put at stake through such misconceived actions.”

The judge was of the view that the FIA had initiated the case without adequate preparation and had simply acted upon the news story written by Walsh – a person whom, the judge said: “was declared by the state to be a persona non grata and expelled from Pakistan”.

In May 2013, two days before Pakistan went to the polls, Walsh, a highly respected journalist and, at the time, Pakistan bureau chief for The New York Times, was given 72 hours to leave the country by authorities who cited his “undesirable activities”.

After leaving Pakistan, Walsh continued to cover developments within the country from outside its borders, publishing his explosive story on 17 May 2015.

Just over a month later, on 27 June 2015, the case was registered in Pakistan by the Corporate Crime Circle of the FIA on behalf of the state through FIR number 7 of 2015 in which charges of forgery and fraud (sections 420, 468, 472, 473, 474, 477-A, 109 and 34 of Pakistan’s Penal Code, along with relevant sections of the Anti-Money Laundering Act of 2010 and Electronic Transaction Ordinance of 2010) were invoked against Shaikh, alleged to be the mastermind, and others.

Evidence

Raids were conducted on the offices of Axact in Karachi and Islamabad and the FIA, via the FIR, claimed to have seized sufficient evidence for a conviction.

The FIR stated: “During the course of enquiry, a number of incriminating material-articles including fictitious-fake certificates, degrees, blank and filled accreditation letters, blank certificates-degrees, validation letters, different stamps, embossing machines used for commission of above offences, have been recovered from the premises of M/s Axact (Pvt) Ltd which have been seized under proper seizure memos.”

The FIR further stated that after the FIA conducted forensic tests of installed computer systems seized from the Karachi office of Axact, the technical findings explained that “CRM (Customer Relations Management) web applications [were] used by M/s Axact (Pvt) Ltd for the purpose of sale of online fictitious/fake educational degrees and certificates to different customers”.

It stated that in the presence of Judicial Magistrate Javed Iqbal Malik FIA opened a block of the Axact’s office in Karachi and during the search, “hundreds of thousands of blank degrees and certificates of hundreds of foreign fictitious schools-universities-colleges, foreign accreditation organisations’ envelopes and other incriminating materials were found in cabinets and racks”.

The FIA, through this FIR, maintained that “the incriminating evidence/articles seized in presence of the judicial magistrate, constitute the commission of offences punishable under various sections of Pakistan Penal Code and other laws of the state”.

The FIA also provided to the court of the session judge in Karachi the details of various bank accounts, alleged to be linked with the “transfer of illegal funds”.

In its online newsletter in November 2017, the Association for International Credential Evaluation Professionals (TAICEP), a credential evaluation organisation working worldwide, published an article titled “The Aftermath of Axact: A Summary of the Investigation on the Degree Mill Operation and Current Updates” which stated: “Over the past decade, Axact has taken money from approximately 217,000 people from 197 countries, with about a third of their customers located in the United States of America. At least $140 million were collected by Axact with US-based bank accounts from thousands of individuals from about 2006 to around May 2015. After the New York Times article, the Axact offices in Pakistan were shut down and hundreds of documents were confiscated.”

In an article published by the American Association of Collegiate Registrars and Admissions Officers (AACRAO), a Washington-based not-for-profit professional association, in its magazine College and University (Vol. 94 No 4) of 2019, former FBI investigator Allen Ezell stated: “The investigation resulted in FIA armed raids on Axact offices in three cities and the seizure of computers and servers and business records. The FIA then conducted interviews with hundreds of Axact employees; more than fifteen became ‘approvers’ and agreed to testify. After seizing approximately 2.2 million blank diplomas, transcripts, school identification cards, accreditation documents, and counterfeit US State Department apostille attestations, the FIA arrested Shaikh and his co-founder, Viqas Atiq.”

During his time as an FBI special agent, Ezell oversaw the FBI’s Diploma Scam investigations (DIPSCAM) from 1980 until 1991 and continues academic fraud consulting in his personal capacity.

On 27 May 2015, British newspaper The Independent covered the story and quoted Shahid Hayat, provincial director of the FIA, as saying: “There were hundreds of thousands of documents there [at the raided Axact office in Karachi]. We have enough evidence to proceed – we have forensic evidence.”

The newspaper has since published two short updates based on information from Axact’s legal representative but has not taken down the original story.

The last update, on 4 January 2024, states: “Legal representatives of Axact, Shoaib Ahmed Shaikh and Bol Network contacted The Independent to say that Shoaib Ahmed Shaikh has been acquitted by both the Sindh High Court and Islamabad High Court of all charges. They say that there are no pending cases against him.”

Twists and turns

The legal journey to Shaikh’s acquittal has been marked by multiple twists and turns. After Shaikh and others were arrested in May 2015, they were convicted and sentenced on various charges by the session courts of Karachi and Islamabad, then acquitted of those charges and freed, only to be arrested again after it came into light that a judge of an Islamabad court who acquitted Shaikh and others was bribed for this decision.

The cases were then started afresh while the accused secured protective bail until last year when, on 20 February 2023, the trial court in Karachi dismissed their acquittal applications. However, they appealed to the Sindh High Court and secured acquittal in all cases in March 2023.

The court order of 10 March 2023 also incorporates the accusations and charges framed by the prosecution which state: “An inquiry had revealed that Mr Shaikh incorporated a company by the name of Axact Private Limited and established Axact FZ LLC in [the] United Arab Emirates (UAE). FIA alleged that Mr Shaikh, as CEO of Axact, and his management team, were involved in preparing and selling bogus degrees and certificates of bogus universities and colleges located in [the] United States of America and the UAE. To support Axact’s business of making fake degrees, Axact had also set up fictitious and non-existent accreditation entities so that degrees would appear to be genuine.”

The prosecution charged that: “Through the business of fake degrees Axact defrauded many persons and made them pay the fee into the account of Axact’s holding company in the UAE.” It alleged that: “The money received in the UAE was then transferred to various bank accounts in Pakistan and categorised as proceeds of software exports.”

However, the court order that ultimately acquitted the men, observed: “In this case, the situation is that … the state which initiated the case … admits that none of the proverbial shred of evidence was found by it to back up the allegations.”

The verdict states: “Saeed Memon, the main investigation officer of the case, testified before the learned trial court … that not one piece of incriminating evidence was found to prove the case. He has repeated the same before this court during the hearing of this case.”

However, the judge further said: “It seems to me … that Memon’s investigation was hampered by the reluctance of foreign authorities and business entities to provide the requisite evidence.”

According to the judge, Memon informed (the court) that upon completion of the investigation of this case, sufficient evidence was not collected and charges of money laundering were dropped. Similarly, allegations pertaining to electronic transactions were also not found to be incriminating in nature, as per the disclosure in the verdict.

Regarding the allegations of selling bogus degrees, the witnesses, as mentioned in the verdict, did not testify against Shaikh and the others. Regarding sections pertaining to forgery, cheating, fraud and falsification, the court observed that the state itself admitted that it did not find any evidence of forgery, any forged documents, any counterfeit seals and any falsification of accounts. The applicants, Sheikh and other directors of Axact, were therefore acquitted of the charge.

The same Sindh High Court that acquitted Shaikh in 2023 had, almost seven years earlier, dismissed a petition by M/s Axact related to provisions of the Anti-Money Laundering Act. The court’s judgment on 4 January 2016 specifically included the state counsel’s argument that the petitioners “were involved in extortion of money from local as well as international customers, who were desirous of obtaining degrees required for their promotions, and other service benefits in continuing their jobs…”.

The verdict also stated: “Mr Zahid Jamil, learned counsel for respondent/(FIA) has contended that the petitioners (M/s Axact and one other) are engaged in illegal business activities, including selling of fake degrees.”

Based on the Sindh High Court acquittal on 10 March 2023, which was not challenged by the prosecution in the same or higher court, the appeal of Shaikh’s lawyers for acquittal for the same offences was later accepted by the Islamabad High Court as well.

That conviction came in July 2018 after the Islamabad High Court set aside the findings of district and sessions judge Pervaiz-ul-Qadir Memon who acquitted Shaikh and others in June 2017. Judge Memon, who later admitted to accepting bribes worth Rs5 million for the acquittal, was suspended on 7 June 2017 by the chief justice and subsequently fired in February 2018.

The FIA registered a case of illegal gratification against Judge Memon on 8 March, 2023 – days before Shaikh was acquitted by Sindh High Court and the Islamabad High Court – stating that: “the event [of bribery] occurred in 2016 and upon receipt of information from Islamabad High Court, the case is registered against Mr Pervaiz-ul-Qadir Memon, former Additional District and Sessions Judge, on the charges of taking illegal gratification of 5 million rupees for acquittal of Shoaib Ahmed Shaikh, Axact CEO as that constitutes offences of misuse of authority for illegal personal gains and criminal misconduct”.

This case registration also charged Shaikh with sections 161, 165-A and 109 (dealing with punishment on abetment in crime of illegal gratification to a public servant) of the Pakistan Penal Code for being a beneficiary of this transaction.

Soon after the bribery allegations came to light, Shaikh and the other accused successfully applied for bail and filed an acquittal plea in 2018 (Appeal No 151/2018 against the judgement and three-year sentence of 5 July 2018) before the Islamabad High Court which set aside its own July 2018 judgement on 29 November 2023 and acquitted all the accused.

The Islamabad High Court maintained that when a high court (referring to Sindh High Court) has (already) acquitted the accused, they cannot be tried under the same charges in the same case in another court, arguing that this prejudiced article 13 of the constitution.

The court of Special Judge Central, FIA Islamabad, on Case FIR No 13/2023 of 4 December 2023, also acquitted Shaikh after no evidence of a bribe was found in the case – despite the judge previously having confessed to receiving one. The prosecution told the court that because they found no evidence against Shaikh and no incriminating evidence against the judge said to be bribed, the FIA had no objection to the acquittal of the accused.

In an interview with University World News, Rasheed Khalid, former head of the department of defence and strategic studies at Islamabad’s Quaid-i-Azam University, said: “How come there is no evidence against Mr Shaikh when a judge himself admitted before an inquiry committee of having received bribery? Why was the judge then dismissed from service?”

Rasheed said: “Former chief justice of the Islamabad High Court Shaukat Aziz Siddiqui has, on record, said that people from intelligence agencies had been interfering in judicial proceedings, so possibly also in this case, as sudden acquittal from both high courts and no review petition by the prosecution strengthens this thesis?”

Judge Siddiqui was dismissed from service in 2018 after he accused the intelligence agency of interfering in courts. Former Inter-Services Intelligence director general Faiz Hameed in January 2024 categorically denied the allegation of any kind of interference in judicial matters during the hearing of a review petition by the sacked judge Siddiqui. In March this year, a Supreme Court bench declared his dismissal “unlawful”. He was allowed post-retirement benefits but not restored as a judge.

Unanswered questions

Analysts wonder where “the hundreds of thousands of fake degrees” reported in documents before court have gone and which the FIA claimed to have seized and were shown on TV screens. In addition to questions about why no one challenged the Sindh High Court verdict and why a single-member bench was constituted for a high-profile case, they also wonder about the fact that some Axact officials have been convicted, sentenced, fined and are behind bars in countries such as the United States.

The acquittals in Pakistan do not free Axact from association with another conviction, in the US.

A US court sentenced a senior employee of Axact, Umair Hamid, to 21 months in prison in August 2017 and imposed a fine of US$5.3 million on him for his involvement in the fake degrees business, according to the charges framed and the verdict delivered.

Axact has denied all the charges against it and has sent letters to various publications including The New York Times and the BBC (whose investigations sparked other coverage) as well as University World News, demanding the removal of content reporting convictions related to Axact and its CEO. None of these three publications has removed their reports.

Specifically, Axact condemned and demanded the removal of the 2015 investigative article by Walsh that unearthed the alleged scam. Similarly, BBC Radio 4's File on Four programme, “Degrees of Deception” released on 21 January 2018, made startling revelations about the alleged buying of fake degrees by thousands of UK nationals. The BBC has also not taken down the content despite legal notices by Axact lawyers.

In a chapter , entitled “Yesterday, Today, and Tomorrow: A Tour of Axact, the ‘World’s Largest Diploma Mill’ ”, published in January 2023 in a book titled Fake Degrees and Fraudulent Credentials in Higher Education, published by Springer last year, Ezell wrote: “Axact is a classic example of a criminal enterprise … I use present tense because Axact is still in business today … It is alive and almost well, operating at the time of writing 24/7, with 1,200–1,500 employees, and with the tacit approval of the Pakistan government and its intelligence agency.”

In a Summer 2023 edition of AACRAO’s College and University magazine, Ezell said after Shaikh was detained on 9 March 2023, the “FIA searched Axact and closed operations (meaning the ‘school’ phones were no longer answered)”.

Ezell’s article, “Axact, the World’s Largest Diploma Mill: A Glimpse Behind the Veil of Legitimacy”, states that Akash Ramchandani, the senior vice-president, who took Shaikh’s position when Shaikh was sent to manage BOL Media Group, fled and hid at a relative’s house until the FIA detained him on 13 March 2023.

“As of April 24 2023, Akash is still being held by Pakistan Customs Intelligence officials. Very few Axact employees have returned to work … It is important to remember, however, that Axact has risen from the ashes several times before,” Ezell writes.

Pakistani academics believe that a rigorous system of degree certificate verification should be in place, and anyone found involved in selling fake academic credentials should be awarded exemplary punishment.

Professor Shagufta Shahzadi, dean of the Faculty of Education at University of Karachi, told University World News: “Unfortunately, the business of selling academic degrees is thriving in the world as increased competition and higher academic qualification for jobs are leading people to find easy ways. Thorough investigations and stringent punishments are the solutions alongside wide-level awareness campaigns.”