A detailed New York Times (NYT) investigative report titled, “Fake Diplomas, Real Cash: Pakistani Company Axact Reaps Millions”, written by former NYT Pakistan Bureau chief Declan Walsh, has outlined how a local IT company Axact – referred to as the “secretive Pakistani software company” – allegedly earned millions of dollars from scams involving fake degrees, non-existent online universities and manipulation of customers.
The NYT article said that Axact is luring customers across the world to its websites in order to appear in search engines.
‘HELLO THIS IS US GOVT FROM KARACHI’:
Their employees work in shifts 24 hours a day and sometimes impersonate American government officials in order to convince the customers to purchase expensive certifications and documents, the article states.
It is also mentioned in the report that the company’s revenues are circulated through offshore companies while its role as the title-holder of this fake education empire remains covered by proxy Internet services.
The report says that Axact makes tens of millions of dollars annually by offering diplomas and degrees online through hundreds of fictitious schools. Fake accreditation bodies and testimonials lend the schools an air of credibility but when customers call, they are talking to Axact sales clerks in Karachi.
Axact operates from Karachi, where it employs over 2,000 people and calls itself Pakistan’s largest software exporter, with Silicon Valley-style employee perks like a swimming pool and yacht, the report adds.
WEBSITES AND DEGREES BASICALLY:
Axact does sell some software applications. But according to former insiders, company records and a detailed analysis of its websites, Axact’s main business has been to take the centuries-old scam of selling fake academic degrees and turn it into an Internet-era scheme on a global scale.
At Axact’s headquarters, former employees say, telephone sales agents work in shifts around the clock. Sometimes they cater to customers who clearly understand that they are buying a shady instant degree for money. But often the agents manipulate those seeking a real education, pushing them to enrol for coursework that never materialises, or assuring them that their life experiences are enough to earn them a diploma.
To boost profits, the sales agents often follow up with elaborate ruses, including impersonating American government officials, to persuade customers to buy expensive certifications or authentication documents, the report claims.
AND A LOT OF MONEY:
Revenues, estimated by former employees and fraud experts at several million dollars per month, are cycled through a network of offshore companies. All the while, Axact’s role as the owner of this fake education empire remains obscured by proxy Internet services, combative legal tactics and a chronic lack of regulation in Pakistan.
“Customers think it’s a university, but it’s not,” Yasir Jamshaid, a quality control official who left Axact in October, told NYT. “It’s all about the money.”
Axact’s response to repeated requests for interviews over the past week, and to a list of detailed questions submitted to its leadership on Thursday, was a letter from its lawyers to The New York Times on Saturday. In the letter, it issued a blanket denial, accusing a Times reporter of “coming to our client with half-cooked stories and conspiracy theories”.
In an interview in November 2013 about Pakistan’s media sector, Axact’s founder and chief executive, Shoaib Ahmed Shaikh, described Axact as an “IT and IT network services company” that serves small and medium-sized businesses. “On a daily basis we make thousands of projects. There’s a long client list,” he said, but declined to name those clients, the report said.
YOU’VE BEEN DUPED:
The accounts by former employees are supported by internal company records and court documents reviewed by NYT. The Times also analysed more than 370 websites — including school sites, but also a supporting body of search portals, fake accreditation bodies, recruitment agencies, language schools and even a law firm — that bear Axact’s digital fingerprints.
In academia, diploma mills have long been seen as a nuisance. But the proliferation of Internet-based degree schemes has raised concerns about their possible use in immigration fraud, and about dangers they may pose to public safety and legal systems. In 2007, for example, a British court jailed Gene Morrison, a fake police criminologist who claimed to have degree certificates from the Axact-owned Rochville University, among other places.
LOW PROFILE PHILANTHROPY?
Moreover, the report states that little of this is known in Pakistan, where Axact has dodged questions about its diploma business and has portrayed itself as a roaring success and model corporate citizen.
“Winning and caring” is the motto of Shaikh, who claims to donate 65 per cent of Axact’s revenues to charity, and last year announced plans for a program to educate 10 million Pakistani children by 2019.
BOL ALL THE WAY:
More immediately, he is working to become Pakistan’s most influential media mogul, the report states. For almost two years now, Axact has been building a broadcast studio and aggressively recruiting prominent journalists for Bol, a television and newspaper group scheduled to start this year.
In his interview with The New York Times in 2013, Axact’s chief executive Shaikh acknowledged that the company had faced criticism in the media and on the Internet in Britain, the United States and Pakistan, and noted that Axact had frequently issued a robust legal response.
“We have picked up everything, we have gone to the courts,” he said. “Lies cannot flourish like that.”
Shaikh said that the money for Axact’s new media venture, Bol, would “come from our own funds”.
With so much money at stake, and such considerable effort to shield its interests, one mystery is why Axact is ready to risk it all on a high-profile foray into the media business, the report questions. Bol has already caused a stir in Pakistan by poaching star talent from rival organisations, often by offering unusually high salaries.
Shaikh says he is motivated by patriotism: Bol will “show the positive and accurate image of Pakistan,” he said last year. He may also be betting that the new operation will buy him influence and political sway.
Axact decries ‘yellow journalism’:
Meanwhile, responding to the New York Times (NYT) article, Axact issued an official response on its website, terming the story “baseless”.
“Axact condemns this story as baseless, substandard, maligning, defamatory and based on false accusations and merely a figment of imagination published without taking the company’s point of view. Axact will be pursuing strict legal action against the publications and those involved,” said the company’s response. They also claimed local media groups Jang and Express were running a “defamation campaign” against Axact and Bol.
The response also alleged that Declan Walsh had 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.”
The response also stated that, “In an exemplary display of poor journalistic skills and yellow journalism, the writer quoted references from several imaginary employees to corroborate accusations made out of thin air.”
Axact uploaded a detailed legal notice sent to NYT.
Aside from the release of its main report, NYT also published a separate post titled “Tracking Axact’s Websites” which listed “the sites for fictitious high schools and universities” that Axact is said to be running.
Explaining its investigation, the report stated that, “Some of the details came from interviews with former employees of Axact, who identified roughly 50 sites, along with servers used by the company and blocks of custom website coding it developed. Starting from the list of employee-identified sites, The Times scoured the Internet for other sites that included similar technical details, servers, content and supporting links. More than 370 sites included at least some of those identifying components.”