NEW YORK: Axact’s assistant vice-president Umair Hamid has pleaded guilty before U.S. court to conspiracy to commit wire fraud in connection with an international “diploma mill” scheme that collected tens of millions of dollars from thousands of customers.
A press release issued by the US Department of Justice on Friday has said that Hamid, 30, admitted to the charges before US District Judge Ronnie Abram.
The press release quoted acting U.S. Attorney Joon H. Kim as saying: “Operating from Pakistan, Umair Hamid helped fraudulently rake in millions of dollars from unwitting American consumers who paid to enroll in, and get degrees from, high schools and colleges that did not exist.”
“As a result of his fraud, people who thought they were investing in an education received nothing more than worthless diplomas and a harsh lesson in the worldwide reach of deceit. Together with our partners at the FBI and the Postal Service, we will continue to work to protect consumers from scams that victimize our citizens,” he added.
According to a statement by former Manhattan US Attorney Preet Bharara, Hamid was arrested on Dec 19, 2016 and was produced in a federal court in Fort Mitchell, Kentucky, the following day.
The press release says that HAMID while using the aliases “Shah Khan” and the “Shah,” and others operated a massive education “diploma mill” through the Pakistani company “Axact”.
“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,” it said.
The press release explains: “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.”
Elaborating his role in the scheme, the release says that he served as Axact’s “Assistant Vice President of International Relations.”
Hamid is scheduled to be sentenced by Judge Abrams on July 21, 2017 and is likely to be awarded a maximum sentence of 20 years in prison.
Pakistan had asked U.S. authorities last year to help it investigate Axact, which had been suspected of earning millions of dollars from the sale of bogus university degrees online.
Hamid resumed selling fake diplomas, duping U.S. consumers into paying upfront fees to enrol in fake high schools and colleges even after Pakistani authorities shut Axact down in May 2015, according to Bharara’s statement.