Axact’s executive accused of $140 million fake degree scam in US Court

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December 23, 2016
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US attorney has charged Axact’s executive, Umair Hamid in a fake degree scam of $140 million.

Umair Hamid aka Shah Khan was serving as Assistant Vice President of International Relations of Axact. He has been charged with wire fraud, conspiracy to commit wire fraud, each of which carries a maximum sentence of 20 years in prison, and aggravated identity theft, which carries two years sentence, in connection with a “diploma mill” scheme that collected approximately $140 million from tens of thousands of people.

The case was investigated by Preet Bharara, US Attorney for Southern District New York, Inspector-in-Charge of US Postal Inspection Service, Philip R. Bartlett and Assistant Director-in-Charge of Federal Bureau of Investigation (FBI), William Sweeney Jr. They alleged Hamid and his co-conspirators of making false and fraudulent representations of company’s websites, tricking consumers into enrolling in colleges and high schools and then issuing fake diplomas after receiving upfront fees from them. Manhattan U.S. Attorney Preet Bharara 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.”

“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.” FBI Assistant Director-in-Charge William F. Sweeney Jr. added.

The Axact Scheme

Axact, a Pakistan’s software company, claims to be the world’s leading information technology (IT) provider. Umair Hamid aka Shah and other executives operated massive fake “diploma mill” worldwide. It claims to have affiliations with hundreds of fictitious universities and colleges worldwide, which Axact advertised online as genuine schools.

The huge scam was disclosed for the first time in 2015 by Pakistan’s Federal Investigation Agency (FIA) after which Axact’s operations were shut down. Hamid continued the fraudulent operations after moving to the United States. As a further part of the scheme, Hamid and a co-conspirator

  • opened bank accounts in the United States in the names of shell entities which received funds transmitted by consumers in exchange for fake diplomas,
  • transferred funds from those bank accounts to other bank accounts located elsewhere in the US, UAE, and Canada
  • used the online payment service provider Paypal, to collect and dispense consumer funds received.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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