2017-04-07 DOJ SDNY press_release 121 KB 7,720 chars

Pakistani Man Pleads Guilty In Axact Diploma Mill Scam

Caption: United States v. Umair Hamid

summary

Umair Hamid, a Pakistani national and former Assistant Vice President of International Relations at Axact, pled guilty to conspiracy to commit wire fraud for operating a global diploma mill that defrauded thousands of U.S. consumers of tens of millions of dollars by selling fake diplomas using forged U.S. government seals and fictitious schools.

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Umair Hamid pled guilty to conspiracy to commit wire fraud for his role in Axact’s international diploma mill scheme, which collected tens of millions of dollars from thousands of consumers by selling worthless diplomas from over 350 fictitious universities and high schools. He controlled fraudulent websites, used fake accreditations, and arranged for diplomas to bear forged seals of the U.S. Secretary of State and state agencies to deceive buyers into believing the credentials were legitimate. Hamid also opened U.S. bank accounts under shell entities to launder proceeds and continued the fraud even after Axact was shut down in Pakistan in May 2015, facing a maximum 20-year sentence with sentencing scheduled for July 21, 2017.

narrative

Umair Hamid, a Pakistani national and former Assistant Vice President of International Relations at Axact, pled guilty to conspiracy to commit wire fraud for orchestrating a global diploma mill that defrauded thousands of consumers, primarily in the United States, of tens of millions of dollars. He and his co-conspirators created over 350 fictitious high schools and universities, advertised them online as legitimate institutions, and tricked victims into paying upfront tuition fees for nonexistent coursework and fake diplomas. To enhance the illusion of legitimacy, Hamid’s operation used deceptive sales tactics, including falsely claiming accreditation from U.S. educational bodies and affixing forged seals of the U.S. Secretary of State and state officials to diplomas. He controlled fraudulent websites, directed the use of fictitious addresses for the phantom schools, and trained sales agents to pressure consumers into purchasing additional, unnecessary 'accreditations.' Hamid facilitated money laundering by opening U.S. bank accounts under shell entities to receive and transfer victim payments, routing funds both domestically and internationally. Despite Axact being shut down by Pakistani authorities in May 2015, Hamid resumed his fraudulent activities targeting U.S. consumers. The FBI and U.S. Postal Inspection Service led the investigation, and Hamid faced a maximum 20-year prison sentence, with sentencing scheduled for July 21, 2017.

Enriched metadata

Scheme: advance-fee (95%)
Court: Southern District of New York
Outcome: pleaded

Classified advance-fee(confidence 95%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →

Extracted insights

Entities 3

person axact scheme
person Joon H. Kim
person umair hamid

Triples 11

Umair Hamid pled guilty to conspiracy to commit wire fraud in connection with international diploma mill scheme
Umair Hamid operated diploma mill through Pakistani company Axact
Axact collected tens of millions of dollars from thousands of customers
Umair Hamid used aliases Shah Khan, Shah
Axact promoted affiliation with approximately 350 fictitious high schools and universities
Axact received approximately 5,000 phone calls per day from individuals seeking to purchase products
Umair Hamid made false representations to consumers on websites and over phone to trick them into enrolling in purported colleges and high schools
Umair Hamid issued fake diplomas upon receipt of upfront fees from consumers
Joon H. Kim announced guilty plea of Umair Hamid
Umair Hamid appeared before U.S. District Judge Ronnie Abrams
Axact scheme defrauded unwitting American consumers who paid to enroll in non-existent high schools and colleges

View original DOJ press releasejustice.gov

Extracted body text (7,720c)

Press Release Pakistani Man Pleads Guilty In Axact Diploma Mill Scam Friday, April 7, 2017 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that UMAIR HAMID, a/k/a “Shah Khan,” a/k/a the “Shah,” pled guilty yesterday before U.S. District Judge Ronnie Abrams 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. As alleged in the Indictment to which HAMID pled guilty and the related criminal Complaint, 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. Acting U.S. Attorney Joon H. Kim said: “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.” According to the allegations contained in the Indictment and the Complaint against HAMID, as well as other court filings in this matter: The Axact Scheme HAMID, using the aliases “Shah Khan” and the “Shah,” and others operated a massive education “diploma mill” through the Pakistani company “Axact,” which has described itself as one of the world’s leading information technology (“IT”) 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. 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. 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 persuade the consumer to 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 U.S. Secretary of State, as well as various state agencies and federal and state officials. HAMID’s Role in the Scheme HAMID served as Axact’s “Assistant Vice President of International Relations.” Among other things, HAMID made various false and fraudulent representations to consumers in order to sell fake diplomas. HAMID controlled websites of purported “schools” that (1) falsely represented that consumers who “enrolled” with the schools by paying tuition fees would receive online instruction and coursework, (2) sold bogus academic “accreditations” in exchange for additional fees, (3) falsely represented that the schools had been certified or accredited by various educational organizations, and (4) falsely represented that the schools’ degrees were valid and accepted by employers, including in the United States. As a further part of the scheme, HAMID and a co-conspirator (1) opened bank accounts in the United States in the names of shell entities, effectively controlled by HAMID, that received funds transferred by consumers in exchange for fake diplomas, (2) transferred funds from those bank accounts to bank accounts associated with other entities located elsewhere in the United States and abroad, at the direction of HAMID, and (3) opened and operated an account to collect and distribute consumer funds obtained in connection with their fraudulent scheme. In May 2015, Axact was shut down by Pakistani law enforcement, 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 United States for upfront fees based upon false and fraudulent representations. Most recently, HAMID traveled to the United States in 2016 in order to open a bank account used to collect money from defrauded consumers. * * * HAMID, 31, of Karachi, Pakistan, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. HAMID is scheduled to be sentenced by Judge Abrams on July 21, 2017, at 3:00 p.m. Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Postal Inspection Service. If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to http://www.usdoj.gov/usao/nys/victimwitness.htmlLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link.. The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Edward A. Imperatore, Noah D. Solowiejczyk, and David Abramowicz are in charge of the prosecution. Updated April 7, 2017 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 17-102

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