Axact Scandal: Pakistan-based company’s fraud exposed

Headquartered in the port city of Karachi, Axact claims to be the world’s leading IT company. Many, including Jehan Ara, the President of Pakistan Software Houses Association (PASHA), have questioned its business model in the past. But Axact founder Shoaib Ahmed Shaikh has repeatedly denied all the allegations against his company.

Axact Scandal: Pakistan-based company's fraud exposed

Axact operates 370 bogus institutions (websites)

Now Declan Walsh of The New York Times has unearthed Axact’s multi-million dollar education scam. The company’s (fake) education empire spans hundreds of high-schools and universities with mostly American sounding names. The NYTimes was able to identify and monitor at least 370 fictitious high-schools and universities operated by Axact.

Axact Grant Town

You can see rave reviews on CNN iReport, hundreds of video testimonials, and the State Department authentication certificates carrying the signature of John Kerry. But many former Axact employees told the NYTimes on condition of anonymity that all the news reports were fabricated, the degrees have no real accreditation, and the professors were merely paid actors. In short, the university campuses exist only in photos stored on computer servers.

Axact Scandal: Pakistan-based company's fraud exposed

Nothing but a piece of paper

The Karachi-based company generates tens of millions of dollars in revenue from thousands of people across the globe. Most of its customers (students) are from the United States, UK and Persian Gulf states. The NYTimes’ main source was a former Axact employee named Yasir Jamshaid. Yasir is said to have fled to Dubai with internal records of more than 20 customers who paid a whopping $600,000 for degrees and diplomas they thought were from reputed American universities.

One person from Saudi Arabia paid $400,000 for fake degrees and associated certificates. Another man from Egypt paid $12,000 for a doctorate in engineering from Nixon University and a certificate signed by the Secretary of State John Kerry. Mr. Jamshaid said the degrees were nothing but a piece of paper.

How do they do it?

So how do they do it? Axact has a team of over 2,000 employees, mostly educated youth, in Karachi. The websites are meticulously created and forcefully marketed, mainly using deceptive tactics, five former employees of Axact told the NYTimes. All the happy students and professors in promotional videos are actors. Axact employees use cold-calling tactics to bring in new students.

Axact’s employees plant fictitious reports about these fake universities on CNN iReport, which is the citizen journalism section of CNN. The U.S. media company said that it had not verified the reports, but Axact universities use CNN logo on their websites as a publicity tool.

Some of the Axact employees impersonate American government officials who bully potential customers into purchasing State Department authentication certificates signed by John Kerry. Axact websites sell such forged documents in Middle-Eastern countries for thousands of dollars.

Axact John Kerry