Arrest in US sting operation confirms ties to Axact, Shoaib Sheikh

After pleading guilty to conspiracy to commit wire fraud, Umair Hamid, a vice president of Axact, faces between 63 and 78 months in US prison, along with a fine of more than $11 million.

A study of court documents by Dawn reveals details of the sting operation that led to the arrest of Hamid and confirmed his ties to Axact and its owner Shoaib Sheikh in connection with an international "diploma mill" scheme.

Hamid, 31, was arrested by FBI agents outside a house in the town of Independence, Kentucky, on December 19, 2016. On his way to the Campbell County Jail, a little more than 10 miles to the north, the questions by the FBI agents began to take a more serious turn.

The agents named specific persons and asked Hamid whether he knew them, and if so, in what capacity. They started with Brett Loebel, who had been dodging allegations of selling diplomas and degrees from fake universities since the late 1990s at least.

Loebel and Axact had been competitors in the mid-2000s, but eventually learned to work together, Hamid told the FBI.

Asked if he knew Uzma Shaheen and Zubair Syed, Hamid said he did, adding that they were relatives of Shoaib Sheikh who had been using them “since the beginning to open bank accounts”.

The indictment against Hamid was filed on January 18 and aimed at a network of individuals beyond Hamid.

“From at least in or about 2006,” the indictment opened, “up to and including in or about December 2016, Umair Hamid…the defendant, and others known and unknown, operated a massive education ‘diploma mill’ through a Pakistani company, Axact, that has held itself out as one of the world’s leading information technology providers.”

Wherever Hamid’s name is mentioned, the indictment also goes on to refer to other “co-conspirators, known and unknown”, stressing the point that Hamid did not act alone.

Hamid is scheduled to be sentenced on July 21, 2017.

Read the full press release by the US Department of Justice

Hamid’s Role in the scheme

Hamid served as Axact’s “Assistant Vice President of International Relations.” Among other things, Hamid made various false and fraudulent representations to consumers in order to sell fake diplomas.

Hamid controlled websites of purported “schools” that (1) falsely represented that consumers who “enrolled” with the schools by paying tuition fees would receive online instruction and coursework, (2) sold bogus academic “accreditations” in exchange for additional fees, (3) falsely represented that the schools had been certified or accredited by various educational organizations, and (4) falsely represented that the schools’ degrees were valid and accepted by employers, including in the United States.

As a further part of the scheme, Hamid and a co-conspirator (1) opened bank accounts in the United States in the names of shell entities, effectively controlled by Hamid, that received funds transferred by consumers in exchange for fake diplomas, (2) transferred funds from those bank accounts to bank accounts associated with other entities located elsewhere in the United States and abroad, at the direction of Hamid, and (3) opened and operated an account to collect and distribute consumer funds obtained in connection with their fraudulent scheme.

In May 2015, Axact was shut down by Pakistani law enforcement, and certain individuals associated with Axact were prosecuted in Pakistan.  Nevertheless, after May 2015, Hamid resumed his fraudulent business of selling fake diplomas to consumers in the United States for upfront fees based upon false and fraudulent representations. Most recently, Hamid travelled to the United States in 2016 in order to open a bank account used to collect money from defrauded consumers.

The Axact scheme

Hamid, using the aliases “Shah Khan” and the “Shah,” and others made misrepresentations to individuals across the world, including throughout the United States and in the Southern District of New York, in order to dupe these individuals into enrolling in supposed high schools, colleges, and other educational institutions. Consumers paid upfront fees to Hamid and his co-conspirators, believing that in return they would be enrolled in real educational courses and, eventually, receive legitimate degrees.  Instead, after paying the upfront fees, consumers did not receive any legitimate instruction and were provided fake and worthless diplomas.

Axact promoted and claimed to have an affiliation with approximately 350 fictitious high schools and universities, which Axact advertised online to consumers as genuine schools. During certain time periods since 2014, Axact received approximately 5,000 phone calls per day from individuals seeking to purchase Axact products or enroll in educational institutions supposedly affiliated with Axact.

Axact, through Hamid and his co-conspirators, falsely “accredited” purported colleges and other educational institutions by arranging to have diplomas from these phony educational institutions affixed with fake stamps supposedly bearing the seal and signature of the US Secretary of State, as well as various state agencies and federal and state officials.