US FBI confirms fake degree trade under Axact

US Embassy says 334 American online universities and Axact subordinate bodies are involved; lakhs of fake degrees and certificates issued under ‘cash-for-qualification’ scheme; 38 accounts in Pak banks detected, most frozen; 35 accounts were active in US, UAE and Singapore; FIA making efforts to get them frozen

ISLAMABAD: The United States has now officially confirmed that the 334 online American universities and accredited institutions run by the Karachi-based company Axact for selling degrees and diplomas are fake, a damning declaration that will have serious legal repercussions for the accused party with all arguments in its defence undermined.

The FBI investigation concluded the list of universities did not have proper accreditation to issue legitimate degrees which are endorsed by the US Department of Education or any authorised US accreditation board, reads a letter of the US Embassy in response to queries sent by the Federal Investigation Agency (FIA).

“All of the provided universities were linked to alleged online fraudulent activity involving false degrees and illegitimate diploma producing organisations,” it further declares. A well-placed FIA officer in Islamabad dealing with the case confirmed the authenticity of the letter, a copy of which is available with ‘The News’.

These fraudulent universities awarded approximately 2.4 million degrees under the cash-for-qualification programme and 119,707 certificates through fake accredited institutions to local and foreign students, the FIA’s investigation reveals, stashing money in offshore companies and banks abroad only to remit a part of it to Pakistan under the guise of software export.

“The accused director and the management of M/s Axact (Pvt) Ltd used to submit fake/ forged/ bogus monthly software export statements to State Bank of Pakistan in order to disguise illegal origin of their funds,” reads an FIA documents submitted to the court.

Investigators have detected its 38 accounts in Pakistani banks and almost as many in USA, UAE, Cyprus and Singapore combined where the company’s 35 accounts were operational. While accounts in Pakistan have largely been frozen, efforts are afoot for the matching action abroad as the FIA told a Karachi court that requesting letters have been dispatched to the respective countries, discloses official documents obtained by ‘The News’.

Details of accounts were submitted to the court besides the issuance of show-cause notices to the accountholders, asking them to provide justification of each and every transaction made into their accounts and the reply is still awaited by the FIA.

“Actual business of Axact was preparing, issuing and selling fake and bogus degrees, diplomas, certificates of fictitious education institutions to the foreign and Pakistani students under the guise of so-called online education,” declares an FIA challan.

Background discussion with the investigators determines that probe is also in progress in the US where the FBI is in the process of seeking court permission for freezing the compnay’s accounts. “They keep us updating,” said an officer. However, the status of efforts in the UAE, Cyprus and Singapore remains unknown as the company is believed to have a fat amount parked in banks there too.

“Accused Shoaib Ahmed Sheikh has established various offshore/ foreign companies and its bank accounts in the USA, UAE, Cyprus, Singapore and other countries of the world for receiving proceeds of crime obtained from selling illegal degrees and certificates,” reads a supplementary challan submitted by FIA Karachi to the court.

During investigation, the challan reads, it has come on record that accused Shoaib has established various front/ shell companies in his own name and that of his front men to launder the ill-gotten money and these companies were set up in the USA, UAE and other off-shore financial centres. “Furthermore, various bank accounts in the name of front/ shell companies have also been opened in order to receive illegal funds obtained from selling fake and bogus degrees,” it notes.

The front/ shell companies in the name and style as Axact FZ LLC, UAE was also established. “A bank account titled Axact FZ LLC, UAE has also been identified which is used to receive proceeds of crime from other foreign countries. The proceeds of crime were further brought into Pakistan maintained at different banks/ branches in the name of Axact (Pvt) Ltd Pakistan, directors, management and other front persons,” reveals the FIA challan.