PAK’S EM­PIRE OF EMPTY PROM­ISES Un­cov­ered: Tan­gled web of cor­po­rate en­ti­ties used to fun­nel il­licit earn­ings back to Pak­istan

The Economic Times - - Around The World -

In the year since Pak­istani in­ves­ti­ga­tors raided Ax­act, a Karachibased soft­ware com­pany ac­cused ofraking­in­hun­dred­sofmil­lion­sof dol­lars with a vast In­ter­net de­gree scam, Pak­istani and US in­ves­ti­ga­tors have been busy dis­man­tling its oper­a­tions.

Four­teen Ax­act em­ploy­ees, in­clud­ing the chief ex­ec­u­tive, await trial on charges of fraud, ex­tor­tion and money laun­der­ing. Bank ac­counts in Pak­istan and the United States have been frozen. In­ves­ti­ga­tors have un­cov­ered a tan­gled­we­bof­cor­po­ra­teen­ti­ties— dozen­sof­shell­com­pa­niesan­das­so­ci­ates, from Caribbean tax havens to oth­ers in Delaware, Dubai and Sin­ga­pore — used to fun­nel il­licit earn­ings back to Pak­istan.

Over the past decade, Ax­act took money from at least 215,000 peo­ple in 197 coun­tries — one-third of them from the United States. Sales agents wielded threats and false prom­ises and im­per­son­ated gov­ern­ment of­fi­cials, earn­ing the com­pany at least $89 mil­lion in its fi­nal year of op­er­a­tion. The po­lice found more than 1 mil­lion blank ed­u­ca­tional cer­tifi­cates and ev­i­dence of 300 fic­ti­tious ed­u­ca­tional web­sites, many with Amer­i­can-sound­ing names like Columbiana and Brook­lyn Park, that sold fake de­grees to hun­dreds of thou­sands of peo­ple around the world. Last month, Myan­mar’s new fi­nance and plan­ning min­is­ter, Kyaw Win, ad­mit­ted that his doc­tor­ate came from Ax­act’s Brook­lyn Park Univer­sity. “Now I am ashamed to call my­self a PhD,” he said.

Ax­act’s jailed chief ex­ec­u­tive Shoaib A h me d S h a i k h faces scru­tiny from US in­ves­ti­ga­tors. In a let­ter to the Pak­istani au­thor­i­ties in Fe­bru­ary, US of­fi­cials said the FBI had iden­ti­fied Ax­act as a “diploma mill” that op­er­ated a “world­wide web of shell com­pa­nies and as­so­ci­ates.”

Other com­pany doc­u­ments point to shell holdings in the British Vir­gin Is­lands, Cyprus, Dubai and Panama. In sev­eral in­stances, Shaikh ap­pears to have used a pseu­do­nym, Ryan Jones, to sign com­pany doc­u­ments. He be­came a cit­i­zen of St. Kitts and Ne­vis, a small Caribbean is­land that sells pass­ports to rich in­vestors.

Com­pany doc­u­ments point to shell holdings in the British Vir­gin Is­lands, Cyprus, Dubai and Panama

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