NYTimes Exposes Giant Fake Diploma Mill Operating Out Of Pakistan; Company Threatens Everyone With Defamation

from the yeah-that'll-work dept

For well over a decade, we've written about the rise of diploma mills online. These are generally unaccredited operations that effectively sell you a degree so you can pretend to be more qualified than you really are. Every few years or so, there are big stories about some semi-famous/high-level person whose degree actually came from a diploma mill. Over the weekend, the NY Times exposed a large Pakistani "software" company, Axact, for not only being behind a bunch of diploma mill websites, but also for engaging in heavy handed boiler-room-style tactics to pressure people into paying ridiculous sums of money. The NY Times report is pretty damning, highlighting how Axact has become a big name in Pakistan, but very few people actually understand how or why it's become so successful. The company has done a lot to try to hide the nature of its large diploma mill business. As the NY Times shows, a bunch of the biggest bogus diploma mill sites are really run by Axact, and feature stock imagery, videos of students/administrators who are really actors (some of whom appear in videos for multiple such universities) and websites and names that make them appear kinda sorta like well-known universities. For example, some of the fake sites named are "Columbiana" and "Barkley University."

The whole NY Times article is absolutely worth reading, but here's a snippet demonstrating what's going on here:

Many sites link to the same fictitious accreditation bodies and have identical graphics, such as a floating green window with an image of a headset-wearing woman who invites customers to chat.

There are technical commonalities, too: identical blocks of customized coding, and the fact that a vast majority route their traffic through two computer servers run by companies registered in Cyprus and Latvia.

Five former employees confirmed many of these sites as in-house creations of Axact, where executives treat the online schools as lucrative brands to be meticulously created and forcefully marketed, frequently through deception.

The professors and bubbly students in promotional videos are actors, according to former employees, and some of the stand-ins feature repeatedly in ads for different schools.

The sources described how employees would plant fictitious reports about Axact universities on iReport, a section of the CNN website for citizen journalism. Although CNN stresses that it has not verified the reports, Axact uses the CNN logo as a publicity tool on many of its sites.

Social media adds a further patina of legitimacy. LinkedIn contains profiles for purported faculty members of Axact universities, like Christina Gardener, described as a senior consultant at Hillford University and a former vice president at Southwestern Energy, a publicly listed company in Houston. In an email, a Southwestern spokeswoman said the company had no record of an employee with that name.

The heart of Axact’s business, however, is the sales team — young and well-educated Pakistanis, fluent in English or Arabic, who work the phones with customers who have been drawn in by the websites. They offer everything from high school diplomas for about $350, to doctoral degrees for $4,000 and above.

Elsewhere in the article, it notes that there have been scandals about some of the diploma mills in question, but Axact has been quite careful to keep its own name out of such conversations, often with legal threats:

Axact has brandished legal threats to dissuade reporters, rivals and critics. Under pressure from Axact, a major British paper, The Mail on Sunday, withdrew an article from the Internet in 2006. Later, using an apparently fictitious law firm, the company faced down a consumer rights group in Botswana that had criticized Axact-run Headway University.

It has also petitioned a court in the United States, bringing a lawsuit in 2007 against an American company that is a competitor in the essay-writing business, Student Network Resources, and that had called Axact a “foreign scam site.” The American company countersued and was awarded $700,000, but no damages have been paid, the company’s lawyer said.

The article also notes that when a class action lawsuit was filed a few years ago against two Axact diploma mills (Belford High School and Belford University), some guy in Pakistan named "Salem Kureshi" claimed that he was running the websites:

But instead of Axact, the defendant who stepped forward was Salem Kureshi, a Pakistani who claimed to be running the websites from his apartment. Over three years of hearings, his only appearance was in a video deposition from a dimly lit room in Karachi, during which he was barely identifiable. An associate who also testified by video, under the name “John Smith,” wore sunglasses.

Mr. Kureshi’s legal fees of over $400,000 were paid to his American lawyers through cash transfers from different currency exchange stores in Dubai, court documents show. Recently a reporter was unable to find his given address in Karachi.

“We were dealing with an elusive and illusory defendant,” said Mr. Howlett, the lawyer for the plaintiffs.

In his testimony, Mr. Kureshi denied any links to Axact, even though mailboxes operated by the Belford schools listed the company’s headquarters as their forwarding address.

The lawsuit ended in 2012 when a federal judge ordered Mr. Kureshi and Belford to pay $22.7 million in damages. None of the damages have been paid, Mr. Howlett said.

True to form, the company has gone ballistic in response to the NY Times article, posting an angry threatening rant on its website, claiming that the story is "defamatory" and promising a legal response. The response is... an interesting read as well. It basically tries to smear everyone associated with the article, arguing that it's all some anti-Pakistan plot. It focuses on the claim that the NY Times is partnered with a company that is a competitor to Axact's new plans to create a new media giant named Bol.

The story is authored by some reporter Declan Walsh of NYT who was expelled from Pakistan as Persona non-grata by Pakistan Interior Ministry allegedly due to his involvement in damaging Pakistan’s national interests. Even the media group he is affiliated with, the Express Tribune, published a story against him (click here to read more). Several other organizations have also written about him as well as failure of NYT to deliver credible news (click here to read more). This reporter has worked and devised a one-sided story without taking any input from the company. A last-minute, haphazard elusive email was sent to the company demanding an immediate response by the next day to which the attorney for Axact responded. Click here to view the response.

Moreover, this reporter has not mentioned the conflict of interest which the NYT has due to its association with Express Media as its revenue source in Pakistan. This necessary disclosure regarding the criminal cases on NYT Partner in Pakistan was deliberately omitted and is an injustice to the reader not expected of a publication like NYT.

But it's not just the NY Times that Axact has been apparently threatening. Axact proudly trumpets on its website that "truth prevails" as Forbes was pressured into removing a story about the NY Times story. Indeed, a Google search suggests that Forbes had such a story yesterday, but if you click on the link to a story by James Marshall Crotty, it now takes you nowhere. Separately, a new NY Times report notes that Axact has threatened a Pakistani blog for merely collecting a bunch of tweets that were mocking Axact. You can see the post on Pak Tea House here, as well as its post about the threat letter from Axact. The blog does not appear interested in giving in, noting that "this is against the principles of free speech." As it further points out, "if the company is aggrieved it should present counter-facts and prove that NYT story is wrong," rather than bullying the blog for merely posting tweets of people responding to the NY Times story.

Lashing out with claims of defamation, rather than actually responding to the details in the story, is only going to increase the attention on Axact. One gets the feeling this story is far from over...

Update: Oh, and the Pakistani government has now raided the offices of Axact and arrested a bunch of employees, in response to the NY Times' story.

Filed Under: defamation, diploma mill, fake univerisities, pakistan, threats
Companies: axact, barkley university, belford university, columbiana, ny times