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