The US Department of Justice has arrested and charged an executive of software firm 'Axact' with fraud, conspiracy, and peddling fake degrees.
The department on Thursday announced the filing of a criminal complaint charging Umair Hamid with wire fraud, conspiracy to commit wire fraud, and aggravated identity theft in connection with a worldwide 'diploma mill' scheme that collected at least approximately $140 million (approx Rs14.675 billion) from tens of thousand of consumers.
Hamid and his co-conspirators made false and fraudulent representations to consumers on websites and over the phone to trick them into enrolling in purported colleges and high schools, and issued fake diplomas upon receipt of upfront fees from consumers. Hamid was arrested on December 19 this year and was presented before a federal court yesterday.
Known for fighting such corruption and fraud crimes, Preet Bharara, a Manhattan attorney, said: "As alleged, while promising the rewards of a higher education, Umair Hamid was actually just peddling diplomas and certifications from fake schools. Hamid allegedly took hefty upfront fees from young men and women seeking an education, leaving them with little more than useless pieces of paper."
The Axact company has held itself out as one of the world's leading information technology providers, but the scam was busted last year in Pakistan.
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, the Judiciary department's statement said.
Thousands of people's hopes were crushed as this alleged diploma mill scheme came crashing down. Victims took at face value the lies Hamid and his co-conspirators are alleged to have sold them. Today, we are rewriting the lesson plan, FBI's assistant director-in-charge William Sweeney said.
The department stated that 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.
ugh 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 U.S. Secretary of State, as well as various states and state agencies and federal and state officials," the court document further state.
Pointing out Hamid's role in the scheme, the court papers said he served as Axact's “Assistant Vice President of International Relations.”
Hamid, 30, while based in Pakistan, was involved in managing and operating online companies that falsely held themselves out to consumers over the Internet as educational institutions.
Among other things, Hamid made various false and fraudulent representations to consumers in order to sell fake diplomas. At his direction, the websites of purported “schools” (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, the case papers said.
As a further part of the scheme, the alleged and a co-conspirator (1) opened bank accounts in the United States in the names of shell entities, effectively controlled by Hamid, which 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, the United Arab Emirates, and Canada, at the direction of Hamid, and (3) opened and operated an account with Paypal, the online payment service provider, to collect and distribute consumer funds obtained in connection with their fraudulent scheme.
In or about May 2015, Axact was shut down by the 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 traveled to the US in order to open a bank account that he had used to collect money from the consumers.
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