Fake-diploma mill: US authorities charge Axact official in $140m scam
New York district attorney, senior officials of FBI and USPIS file complaint against Umair Hamid
PHOTO: THE NEW YORK TIMES
An official of the software company Axact was charged in a US federal court on Wednesday for his part in an alleged $140 million fake-diploma mill scheme after a US district attorney and senior officials of the Federal Bureau of Investigation (FBI) and the US Postal Inspection Service (USPIS) filed an application against him.
Umair Hamid, 30, was charged in a criminal complaint filed in federal court in Manhattan with wire fraud, conspiracy to commit wire fraud and aggravated identity theft in connection with a worldwide scam that collected at least $140 million from tens of thousands of consumers .
The complaint was filed by the US Attorney for the Southern District of New York Preet Bharara, USPIS New York Office Inspector-in-Charge Phillip R Bartlett and Assistant Director-in-Charge of the FBI New York Field Office William F Sweeney Jr.
“Umair Hamid – aka Shah Khan, aka ‘the Shah’ – was arrested on December 19, 2016, and was presented yesterday [Tuesday] in a federal court in Fort Mitchell, Kentucky,” read a statement issued by Bharara, Bartlett and Sweeney.
“As alleged, 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,” Bharara said in the statement.
“While promising the rewards of a higher education, Hamid was actually just peddling diplomas and certifications from fake schools. He allegedly took hefty upfront fees from young men and women seeking an education, leaving them with little more than useless pieces of paper,” the district attorney added.
“Hamid took advantage of the aspirations and dreams of thousands wanting a college education by devising a scheme to issue college coursework, degrees and certifications not worth the paper they were printed on. Postal Inspectors and their law enforcement partners will spare no resource to bring these scammers to justice, protecting those striving for higher education and opportunities,” Bartlett said in the statement.
“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’re rewriting the lesson plan,” said Sweeney.
According to the statement, Hamid, using aliases ‘Shah Khan’ and ‘the Shah’, and others operated a massive diploma mill through Axact, which has held itself out 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,” the statement said.
“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,” it added.
“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 convince the consumer that the consumer should also 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 states and state agencies and federal and state officials.”
The statement said Hamid served as Axact’s ‘Assistant Vice President of International Relations’. “While based in Pakistan, Hamid 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 Hamid’s direction, the websites of purported ‘schools’ falsely represented that consumers who ‘enrolled’ with the schools by paying tuition fees would receive online instruction and coursework, sold bogus academic ‘accreditations’ in exchange for additional fees, falsely represented that the schools had been certified or accredited by various educational organizations, and falsely represented that the schools’ degrees were valid and accepted by employers, including in the US,” it said.
“As a further part of the scheme, Hamid and a co-conspirator opened bank accounts in the US in the names of shell entities, effectively controlled by Hamid, which received funds transferred by consumers in exchange for fake diplomas, transferred funds from those bank accounts to bank accounts associated with other entities located elsewhere in the US, UAE and Canada, at the direction of Hamid, and opened and operated an account with Paypal to collect and distribute consumer funds obtained in connection with their fraudulent scheme.”
The statement noted that Axact was shut down by Pakistani law enforcement in May 2015 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 US 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 has used to collect money from consumers he defrauded,” it added.
The statement said Hamid is charged with one count of conspiracy to commit wire fraud and two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison.
It urged other victims of Hamid’s actions and those who may have information pertaining to his alleged crimes to contact the Victim/Witness Unit at the US Attorney’s Office for the Southern District of New York.
Published in The Express Tribune, December 23rd, 2016.
Umair Hamid, 30, was charged in a criminal complaint filed in federal court in Manhattan with wire fraud, conspiracy to commit wire fraud and aggravated identity theft in connection with a worldwide scam that collected at least $140 million from tens of thousands of consumers .
The complaint was filed by the US Attorney for the Southern District of New York Preet Bharara, USPIS New York Office Inspector-in-Charge Phillip R Bartlett and Assistant Director-in-Charge of the FBI New York Field Office William F Sweeney Jr.
“Umair Hamid – aka Shah Khan, aka ‘the Shah’ – was arrested on December 19, 2016, and was presented yesterday [Tuesday] in a federal court in Fort Mitchell, Kentucky,” read a statement issued by Bharara, Bartlett and Sweeney.
“As alleged, 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,” Bharara said in the statement.
“While promising the rewards of a higher education, Hamid was actually just peddling diplomas and certifications from fake schools. He allegedly took hefty upfront fees from young men and women seeking an education, leaving them with little more than useless pieces of paper,” the district attorney added.
“Hamid took advantage of the aspirations and dreams of thousands wanting a college education by devising a scheme to issue college coursework, degrees and certifications not worth the paper they were printed on. Postal Inspectors and their law enforcement partners will spare no resource to bring these scammers to justice, protecting those striving for higher education and opportunities,” Bartlett said in the statement.
“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’re rewriting the lesson plan,” said Sweeney.
According to the statement, Hamid, using aliases ‘Shah Khan’ and ‘the Shah’, and others operated a massive diploma mill through Axact, which has held itself out 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,” the statement said.
“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,” it added.
“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 convince the consumer that the consumer should also 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 states and state agencies and federal and state officials.”
The statement said Hamid served as Axact’s ‘Assistant Vice President of International Relations’. “While based in Pakistan, Hamid 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 Hamid’s direction, the websites of purported ‘schools’ falsely represented that consumers who ‘enrolled’ with the schools by paying tuition fees would receive online instruction and coursework, sold bogus academic ‘accreditations’ in exchange for additional fees, falsely represented that the schools had been certified or accredited by various educational organizations, and falsely represented that the schools’ degrees were valid and accepted by employers, including in the US,” it said.
“As a further part of the scheme, Hamid and a co-conspirator opened bank accounts in the US in the names of shell entities, effectively controlled by Hamid, which received funds transferred by consumers in exchange for fake diplomas, transferred funds from those bank accounts to bank accounts associated with other entities located elsewhere in the US, UAE and Canada, at the direction of Hamid, and opened and operated an account with Paypal to collect and distribute consumer funds obtained in connection with their fraudulent scheme.”
The statement noted that Axact was shut down by Pakistani law enforcement in May 2015 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 US 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 has used to collect money from consumers he defrauded,” it added.
The statement said Hamid is charged with one count of conspiracy to commit wire fraud and two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison.
It urged other victims of Hamid’s actions and those who may have information pertaining to his alleged crimes to contact the Victim/Witness Unit at the US Attorney’s Office for the Southern District of New York.
Published in The Express Tribune, December 23rd, 2016.