A $140 million diploma mill run through Axact, and a 21-month sentence for one executive
Axact, a Pakistani software company, advertised about 350 fictitious high schools and universities online and collected roughly $140 million from tens of thousands of US consumers by selling worthless diplomas, then pushing many buyers toward extra "accreditation" fees. Pakistani authorities shut Axact down in May 2015, but one of its executives, Umair Hamid, kept the US side of the business running. He pleaded guilty in Manhattan federal court in 2017 to conspiracy to commit wire fraud and was sentenced to 21 months in prison and ordered to forfeit $5,303,020.
- Year
- 2017
- Where
- United States, Pakistan
- Outcome
- Sentenced
- Reported loss
- $140.0 million
- Victims
- Not stated in the sources
- Schemes
- Diploma mill fraud
- Last reviewed
- 2026-10-31
The facts, as recorded
- Umair Hamid, 31 (30 at the time of his arrest), of Karachi, Pakistan, worked as Axact's Assistant Vice President of International Relations.
- He was arrested on December 19, 2016, and charged two days later in the Southern District of New York with wire fraud, conspiracy to commit wire fraud and aggravated identity theft.
- Prosecutors said Axact's network of about 350 fictitious high schools and universities had collected roughly $140 million from tens of thousands of US consumers, with the company fielding about 5,000 calls a day during some periods since 2014.
- Consumers who enrolled and paid an upfront fee were sold worthless diplomas, and sales agents pushed many of them to pay extra for 'accreditation' backed by supposedly official seals, including ones made to resemble the US Secretary of State's own signature.
- Funds were collected through US bank accounts held by shell entities, according to prosecutors.
- Pakistani authorities had already shut Axact down in May 2015 over the scheme; prosecutors said Hamid kept the US side of the business running afterward and traveled to the United States in 2016 specifically to open a bank account to keep collecting payments.
- Hamid pleaded guilty on April 6, 2017 to one count of conspiracy to commit wire fraud, which carried a 20-year statutory maximum.
- US District Judge Ronnie Abrams sentenced Hamid on August 29, 2017 to 21 months in prison and ordered him to forfeit $5,303,020.
- Separately, in Pakistan, Axact's owner Shoaib Ahmed Shaikh and 22 others were prosecuted and sentenced in a parallel Pakistani criminal case, a different proceeding from the US case against Hamid.
Why this case matters
This is the largest documented US prosecution of a diploma mill by dollar figure on this page, and the only one of the three cases here where the operation was run from overseas, through a company (Axact) rather than a single small operator, and where the US criminal case covers only one employee’s conduct, not the company itself.
The scale, and the upsell
The $140 million figure is not from a one-time flat fee. Prosecutors described a structure that started with an upfront enrollment payment for a “degree,” then escalated: sales agents called back to push buyers toward paying more for “accreditation,” backed by official-looking seals designed to resemble the signature of the US Secretary of State. About 350 fictitious schools and a call volume of roughly 5,000 calls a day, during some periods since 2014, gives a sense of the scheme’s scale relative to the diploma mills described elsewhere on this page, which ran a handful of fake university names each.
A business that outlasted its own shutdown
Pakistani regulators ordered Axact closed in May 2015. Prosecutors said Hamid did not stop: he kept the US side of the operation running and, in 2016, traveled to the United States specifically to open a bank account so the company could keep collecting payments from American consumers, the conduct that led directly to his December 2016 arrest.
The caveat
Hamid is the only person named in the US case summarized here; he pleaded guilty to one count of conspiracy to commit wire fraud and was sentenced on that count alone, not on the full original indictment, which had also charged wire fraud and aggravated identity theft. Axact’s owner, Shoaib Ahmed Shaikh, and 22 others were separately prosecuted and sentenced in Pakistan, a different country’s court system with its own, distinct proceeding, not part of the US docket this case file describes. The $140 million and “tens of thousands of consumers” figures are prosecutors’ own characterization of the scheme Hamid helped run, not a court-verified total tied to his personal share of it.
Sources
- US Charges Pakistani Executive in $140 Million Fake-Diploma-Mill Fraud. Radio Free Europe/Radio Liberty, with Reuters. Accessed 2026-10-31. Supports: Hamid's arrest and charges on December 19 and 21, 2016, his age, his role at Axact, the $140 million and tens-of-thousands-of-consumers figures, Axact's May 2015 shutdown in Pakistan, and Preet Bharara's quote.
- Pakistani man pleads guilty in $140m fake degree scam in US. Gulf News. Accessed 2026-10-31. Supports: Hamid's guilty plea to conspiracy to commit wire fraud before Judge Ronnie Abrams, the 20-year maximum sentence, the 350 fictitious schools, the 5,000-calls-a-day detail, the fake accreditation seals resembling the Secretary of State's signature, the shell-entity bank accounts, and Hamid's 2016 US trip to open an account.
- Axact executive given 21 months imprisonment for selling fake degrees. Daily Pakistan Global. Accessed 2026-10-31. Supports: The August 29, 2017 sentencing date, the 21-month prison term, the $5,303,020 forfeiture, Judge Ronnie Abrams's name, and Acting US Attorney Joon H. Kim's quotes.