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Tuesday Aug 29 2017

US court sentences Axact VP to 21 months in ‘international diploma mill’ case


A US court on Tuesday sentenced Axact Vice President Umair Hamid to 21 months in prison and levied a fine of $5,303,020 "for his role in an international diploma mill scheme operated through the Pakistani company”.

According to the US Department of Justice’s website, Hamid pled guilty on April 6 this year to conspiracy to commit wire fraud. “He entered the guilty plea before a US District judge who imposed today’s sentence”.

Hamid, an executive of Axact, was arrested on Dec 19, 2016, according to a statement by former Manhattan US Attorney Preet Bharara. He was produced in a federal court in Fort Mitchell, Kentucky, the following day.

According to the department of justice, Hamid was involved in running a “massive diploma mill” through Axact. The mill tricked people from across the world into enrolling in supposed high schools, colleges, and universities. “Consumers paid upfront fees, believing that in return they would be enrolled in real educational courses and, eventually, receive legitimate degrees. Instead, consumers received no instruction and worthless diplomas,” the website says.

The website further says, “Hamid, who served most recently as Axact’s Assistant Vice President of International Relations, helped Axact conduct the fraud in the United States, among other locations. On Axact’s behalf, he served as the primary contact during negotiations with a former competitor for Axact’s acquisition of websites for fake educational institutions. Under Axact’s control, those websites then continued to deceive consumers into paying upfront enrollment fees for non-existent educational programs.”

The Department of Justice said that Hamid continued to travel to US in 2016 “to open a bank account used to collect money from defrauded consumers” and conduct fraudulent business as he was not arrested after Pakistani authorities shut down Axact and arrested various individuals associated with it.

Hamid’s role in the scheme

A press release by the US DoJ on April 7 reads: 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 organisations, 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

The press release further said: "Hamid, using the aliases “Shah Khan” and the “Shah,” and others operated a massive education “diploma mill” through “Axact,” which has described itself as one of the world’s leading “information technology” providers. Working on behalf of Axact, Hamid 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.

At least some of those consumers appeared to believe that they were calling phone numbers associated with the respective schools. When consumers asked where the schools were located, sales representatives were instructed to give fictitious addresses.

Once a consumer paid for a school certificate or diploma that falsely reflected a completed course of study, Axact sales agents were trained to use sales techniques to persuade the consumer to purchase additional “accreditation” or “certifications” for such certificates or diplomas in order to make them appear more legitimate.

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."