Axact Reaps Millions through Fake Diplomas, Alleges New York Times

If you search on the internet, you will see that there is a huge education empire; hundreds of high schools and universities, with smiling professors and elegant names at sun-dappled American campuses. They have assured and glossy websites, which offer degrees in in tons of disciplines such as civil engineering and nursing. The CNN iReport website has glowing endorsements, enthusiastic positive video testimonials and also authentication certificates from the State Department, which bore the signature of Secretary of State John Kerry. In one promotional video, a woman is introduced as head of a law school and boasts that they are one of the most notable faculty in the world. She invites people to be a part of Newford University.

But, when you examine in closely, you see the picture shimmer like a mirage. All these professors and teachers are just paid actors and the reports are just fabricated. The university campuses don’t exist in reality; they are just photos on computer servers. There is no true accreditation of the degrees they offer. As a matter of fact, the virtual academic realm that’s spread out over nearly 370 websites, is mostly a farce and very little of it is actually real. The only real thing is the tens of millions of dollars’ worth of revenue gleaned from hundreds and thousands of people all over the globe, which all go to a Pakistani software company.

Operating from the port city of Karachi, Axact has about 2,000 people working for it and regards itself as the largest software exporter in the country, which offers employee perks such as yacht and a swimming pool, all reminiscent of Silicon Valley. Some software applications are sold by Axact, but some former insiders have revealed that a detailed analysis of company websites and records show its primary business has been to take the age-old scam of selling fake diplomas and degrees and turn it into a scheme for the internet-era on an international scale.

With the rising popularity of online education, the company has positioned its portal websites and schools aggressively to make sure they appear on top in online searches in order to lure in potential global customers. Former employees have said that telephone sales agents are employed at the company’s headquarters who work in shifts all day. Sometimes they deal with customers who are fully aware that they are paying money for a shady instant degree. But, most of the time, the job of the agents is to manipulate those who are really interested in a real education and push them to enroll in courses that never happen or assure them that their life experiences are worthy of a diploma.

The sales agents are focused on boosting profits so they use elaborate ruses such as impersonating American government officials for persuading customers to purchase expensive authentication documents and certifications. Fraud experts and former employees have estimated revenues to be about several million dollars per month and a network of offshore firms are used for cycling them. All this time, a lack of regulation in Pakistan, combative legal strategies and proxy internet services have obscured the role of Axact as the owner of this fake education empire.

A quality control official, Yasir Jamshed, who left the company in October, said that customers believe it to be a university and for Axact it just has to do with money. Over the past weeks, repeated requests for interviews have been made to Axact and a detailed list of questions was also submitted to the firm on Thursday. In response, the New York Times received a letter from the company’s lawyers on Saturday, which conveyed a blanket denial. In fact, a Times reporter was accused of coming up with half-cooked conspiracy theories and stories.

In November 2013, the chief executive and founder of Axact, Shoaib Ahmed Shaikh, described the firm as an ‘I.T and I.T network services company serving medium and small-sized businesses. He said that they work on thousands of projects on a daily basis for a long list of clients, but he didn't name any. The New York Times reviewed some court documents and internal company records, which support claims of former employees. Also, more than 370 websites were analyzed by The Times, which includes fake accreditation bodies, language schools, recruitment agencies, a supporting body of search portals, school sites and a law firm, all bearing Axact's digital fingerprints.

Mr. Shaikh's motto is ‘Winning and caring’ who claims that 65% revenues of the firm are donated to charity. Last year, he also announced a program for education 10 million Pakistani children by 2019. More immediately, he is focused on becoming the most influential media mogul in Pakistan. For the past two years, Axact has been working on developing a broadcast studio and recruiting prominent journalists aggressively for Bol, which is a newspaper and television group scheduled to take off this year.

There has been considerable speculation regarding how this ambitious venture is being funded. Several pending lawsuits have been filed by Axact and vigorous public denials have been issued by Mr. Shaikh rejecting accusations by media competitors that organized crime or the Pakistani military are supporting it. Given the scope of the fake diploma operation of Axact, it is likely that they are providing the fuel for the new media operations. A retired F.B.I agent and author of a book about diploma mills, Allen Ezell said that this is the largest operation ever seen.

There aren't just superficial, but also technical similarities in Axact's high schools and universities such as toll-free American numbers, identical blocks of coding, slick websites and same servers. But, it is the sales team, which is the heart of the company’s business. These are educated and young Pakistanis, fluent in Arabic and English, working with customers who are lured to the websites. They offer everything ranging from high school diplomas costing $350 to doctoral degrees worth $4000 and more. Websites are tailored to appeal to customers in primary markets such as the US and oil-rich Persian Gulf countries. A former employee said that a Saudi man spent about $400,000 on a fake degree.