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Pakistani firm is at center of vast fake degree scam

Seen from the Internet, it is a vast education empire: hundreds of universities and high schools, with elegant names and smiling professors at sun-dappled American campuses.

Their glossy websites offer online degrees in dozens of disciplines. There are glowing endorsements on the CNN iReport website, enthusiastic video testimonials, and State Department authentication certificates bearing the signature of Secretary of State John Kerry.

"We host one of the most renowned faculty in the world," boasts a woman introduced in one promotional video as the head of a law school. "Come be a part of Newford University to soar the sky of excellence."

Yet on closer examination, this picture shimmers like a mirage. The news reports are fabricated. The professors are paid actors. The university campuses exist only as stock photos on computer servers. The degrees have no true accreditation.

In fact, very little in this virtual academic realm, appearing to span at least 370 websites, is real – except for the tens of millions of dollars in estimated revenue it gleans each year from many thousands of people around the world, all paid to a secretive Pakistani software company.

That company, Axact, operates from Karachi, where it employs more than 2,000 people and calls itself Pakistan’s largest software exporter, with Silicon Valley-style employee perks like a swimming pool.

Axact does sell some software applications. But according to former insiders, company records and a detailed analysis of its websites, Axact’s main business has been to take the centuries-old scam of selling fake academic degrees and turn it into an Internet-era scheme on a global scale.

At Axact’s headquarters, former employees say, telephone sales agents work in shifts around the clock. Sometimes they cater to customers who clearly understand that they are buying a shady instant degree for money. But often the agents manipulate those seeking a real education, pushing them to enroll for coursework that never materializes, or assuring them that their life experiences are enough to earn them a diploma.

To boost profits, the sales agents often follow up with elaborate ruses, including impersonating U.S. government officials, to persuade customers to buy expensive certifications or authentication documents.

"Customers think it’s a university, but it’s not," said Yasser Jamshaid, a quality control official who left Axact in October. "It’s all about the money."

Axact’s response to repeated requests for interviews over the past week, and to a list of detailed questions submitted to its leadership Thursday, was a letter from its lawyers to The New York Times on Saturday. In the letter, it issued a blanket denial, accusing a Times reporter of "coming to our client with half-cooked stories and conspiracy theories."

In an interview in November 2013 about Pakistan’s media sector, Axact’s founder and chief executive, Shoaib Ahmed Shaikh, described Axact as an "I.T. and I.T. network services company" that serves small and medium-sized businesses. "On a daily basis we make thousands of projects. There’s a long client list," he said, but declined to name those clients.

The accounts by former employees are supported by internal company records and court documents reviewed by The Times. The Times also analyzed more than 370 websites – including school sites, but also a supporting body of search portals, fake accreditation bodies, recruitment agencies, language schools and even a law firm – that bear Axact’s digital fingerprints.

In academia, diploma mills have long been seen as a nuisance. But the proliferation of Internet-based degree schemes has raised concerns about their possible use in immigration fraud, and about dangers they may pose to public safety and legal systems. In 2007, for example, a British court jailed Gene Morrison, a fake police criminologist who claimed to have degree certificates from the Axact-owned Rochville University, among other places.

At first glance, Axact’s universities and high schools are linked only by superficial similarities: slick websites, toll-free U.S. contact numbers and calculatedly familiar-sounding names, like Barkley, Columbiana and Mount Lincoln.

But other clues signal common ownership. Many sites link to the same fictitious accreditation bodies and have identical graphics.

There are technical commonalities, too: identical blocks of customized coding, and the fact that a vast majority route their traffic through two computer servers run by companies registered in Cyprus and Latvia.

Five former employees confirmed many of these sites as in-house creations of Axact, where executives treat the online schools as lucrative brands to be meticulously created and forcefully marketed, frequently through deception.

The professors and bubbly students in promotional videos are actors, according to former employees, and some of the stand-ins feature repeatedly in ads for different schools.

Many customers of degree operations, hoping to secure a promotion or pad their risumi, are clearly aware that they are buying the educational equivalent of a knockoff Rolex. Some have been caught.

In the United States, one federal prosecution in 2008 revealed that 350 federal employees, including officials at the State and Justice departments, held qualifications from a non-Axact-related diploma mill operation based in Washington state.

The effects have sometimes been deeply disruptive. In Britain, the police had to re-examine 700 cases that Morrison, the falsely credentialed police criminologist and Rochville graduate, had worked on. "It looked easier than going to a real university," Morrison said during his 2007 trial.

Last May, Mohan, a junior accountant at a construction firm in Abu Dhabi, paid $3,300 for what he believed was going to be an 18-month online master’s program in business administration at the Axact-owned Grant Town University.

A sales agent assured Mohan, a 39-year-old Indian citizen who asked to be identified only by part of his name, of a quality education. Instead, he received a cheap tablet computer in the mail – it had no education applications or coursework – followed by a series of insistent demands for more money.

When a phone caller who identified himself as a U.S. Embassy official railed at Mohan for his lack of an English-language qualification, he agreed to pay $7,500 to the Global Institute of English Language Training Certification, an Axact-run website.

In a second call weeks later, the man pressed Mohan to buy a State Department authentication certificate signed by Kerry. Mohan charged $7,500 more to his credit card.

In September a different man called, this time claiming to represent the United Arab Emirates government. If Mohan failed to legalize his degree locally, the man warned, he faced possible deportation. Panicking, Mohan spoke to his sales agent at Axact and agreed to pay $18,000 in installments.

By October, he was $30,000 in debt and sinking into depression. He had stopped sending money to his parents in India, and hid his worries from his wife, who had just given birth.

"She kept asking why I was so tense," said Mohan during a recent interview near his home in Abu Dhabi. "But I couldn’t say it to anyone."

Some employees, despite the good salaries and perks they enjoyed, became disillusioned by the true nature of Axact’s business.

During three months working in the internal audit department last year, monitoring customer phone calls, Jamshaid grew dismayed by what he heard: customers being cajoled into spending tens of thousands of dollars, and tearful demands for refunds that were refused.

"I had a gut feeling that it was not right," he said.

In October, Jamshaid quit Axact and moved to the United Arab Emirates, taking with him internal records of 22 individual customer payments totaling more than $600,000.

Jamshaid has contacted most of those customers, offering to use his knowledge of Axact’s internal protocols to obtain refunds. Several spurned his approach, seeing it as a fresh effort to defraud them. But a few, including Mohan, accepted his offer.

After weeks of fraught negotiations, Axact refunded Mohan $31,300 last fall.

"I was a fool," he said, shaking his head. "It could have ruined me."

© 2015 The New York Times Company

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