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Fake Diplomas, Real Cash: Pakistani Company Axact Reaps Millions

By DECLAN WALSH
NYTIMES_Logo

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.

PAKISTAN fake online university
Axact, which has its headquarters in Karachi, Pakistan, ostensibly operates as a software company. Credit Sara Farid for The New York Times

Their websites, glossy and assured, offer online degrees in dozens of disciplines, like nursing and civil engineering. 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 the port city of Karachi, where it employs over 2,000 people and calls itself Pakistan’s largest software exporter, with Silicon Valley-style employee perks like a swimming pool and yacht.

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.

As interest in online education is booming, the company is aggressively positioning its school and portal websites to appear prominently in online searches, luring in potential international customers.

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 American government officials, to persuade customers to buy expensive certifications or authentication documents.

Revenues, estimated by former employees and fraud experts at several million dollars per month, are cycled through a network of offshore companies. All the while, Axact’s role as the owner of this fake education empire remains obscured by proxy Internet services, combative legal tactics and a chronic lack of regulation in Pakistan.

“Customers think it’s a university, but it’s not,” said Yasir 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 on 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.”

After the initial publication of this article, Axact posted a public response on its website, saying it would seek legal action. The statement begins, “Axact condemns this story as baseless, substandard, maligning, defamatory, and based on false accusations and merely a figment of imagination published without taking the company’s point of view.”

Also after publication, some of the testimonial videos and specific website contents cited in this article were taken down without explanation.

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 New York 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.

Little of this is known in Pakistan, where Axact has dodged questions about its diploma business and has portrayed itself as a roaring success and model corporate citizen.

“Winning and caring” is the motto of Mr. Shaikh, who claims to donate 65 percent of Axact’s revenues to charity, and last year announced plans for a program to educate 10 million Pakistani children by 2019.

More immediately, he is working to become Pakistan’s most influential media mogul. For almost two years now, Axact has been building a broadcast studio and aggressively recruiting prominent journalists for Bol, a television and newspaper group scheduled to start this year.

Just how this ambitious venture is being funded is a subject of considerable speculation in Pakistan. Axact has filed several pending lawsuits, and Mr. Shaikh has issued vigorous public denials, to reject accusations by media competitors that the company is being supported by the Pakistani military or organized crime. What is clear, given the scope of Axact’s diploma operation, is that fake degrees are likely providing financial fuel for the new media business.

“Hands down, this is probably the largest operation we’ve ever seen,” said Allen Ezell, a retired F.B.I. agent and author of a book on diploma mills who has been investigating Axact. “It’s a breathtaking scam.”

Building a Web

At first glance, Axact’s universities and high schools are linked only by superficial similarities: slick websites, toll-free American 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, such as a floating green window with an image of a headset-wearing woman who invites customers to chat.

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.

The sources described how employees would plant fictitious reports about Axact universities on iReport, a section of the CNN website for citizen journalism. Although CNN stresses that it has not verified the reports, Axact uses the CNN logo as a publicity tool on many of its sites.

Social media adds a further patina of legitimacy. LinkedIn contains profiles for purported faculty members of Axact universities, like Christina Gardener, described as a senior consultant at Hillford University and a former vice president at Southwestern Energy, a publicly listed company in Houston. In an email, a Southwestern spokeswoman said the company had no record of an employee with that name.

The heart of Axact’s business, however, is the sales team — young and well-educated Pakistanis, fluent in English or Arabic, who work the phones with customers who have been drawn in by the websites. They offer everything from high school diplomas for about $350, to doctoral degrees for $4,000 and above.

“It’s a very sales-oriented business,” said a former employee who, like several others, spoke on the condition of anonymity because he feared legal action by Axact.

Read more: Fake Diplomas, Real Cash: Pakistani Company Axact Reaps Millions

Source: nytimes.com

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