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Two Plead Guilty To Mail Fraud in Diploma 'Scam'

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Two men pleaded guilty to federal fraud charges last week for their involvement in an operation that included at least two illegal diploma mills that sold what a federal investigator describes as a "voluminous'' number of fake university degrees.

The two pleas stem from indictments in an investigation--known as "Dipscam,'' for diploma scam--that has been pursued by the Federal Bureau of Investigation branch office in Charlotte, N.C., since 1980.

Over the past eight years, FBI agents estimate, hundreds of diploma mills have sold bogus diplomas to thousands of people. Degrees in education are among the most common of those sold.

The ongoing federal investigation has resulted in more than a dozen indictments so far, according to Otho Allen Ezell, Jr., a special agent for the FBI who is heading the investigation in Charlotte. Last week's pleas are part of a larger picture that the FBI will continue to probe, he said.

The names of those who received fake diplomas from the two operators who entered guilty pleas last week have not yet been released because the investigation is continuing, Mr. Ezell said. But he noted that when the list is released, it will be "voluminous.''

In 1985, more than 2,000 names of degree recipients were released in connection with the sentencing of four men who also pleaded guilty to mail fraud; 173 of the degree recipients named had received education-related degrees. (See Education Week, June 5, 1985.)

Mail Fraud and Conspiracy

Last week's court action involved Stanley J. Simmons Jr. and Clarence E. Franklin Jr., who each pleaded guilty to one count of mail fraud before the U.S. District Court for the Western District of North Carolina.

Mr. Simmons also pleaded guilty to one count of conspiracy to commit mail fraud.

According to court records, the two men set up two "universities,'' at various addresses in Arizona and Florida, where an individual could obtain a bachelor's, master's, or doctoral degree by mail for a minimal amount of work at a certain price.

The institutions were advertised as American National University and North American University.

Mr. Simmons also faces charges stemming from his involvement with an institution named Southwestern University, which was uncovered in earlier investigations, according to the FBI

Four others were charged in the indictments, handed down Feb. 3, 1987, by a North Carolina grand jury.

Charges of aiding and abetting the operation are still pending against Patricia K. Arnold, Linda A. Franklin, and Enoch C. Van Aken, according to court documents. Mr. Ezell said charges against the fourth person--Ivonne S. Mascaro--have been dropped.

Because the case is not yet complete, sentencing will be delayed until a later date, Mr. Ezell said.

According to court records, American National University was advertised as a private, independent university offering "alternative, off-campus, nonresidential, self-paced'' degrees in "business, industry, education, and the professions.''

The "university'' allowed full academic credits for prior work, life and educational achievements, as well as "knowledge and skills acquired through personal experience.''

During the investigation, Mr. Ezell posed as a potential student seeking a master's degree in business. No significant academic work was required, according to the agent.

"I did very, very, very little,'' he said. "Usually, they only require a token amount--two or three pages of a report, or something like that.''
In addition to a $100 application fee, "tuition'' costs ranged from $1,795 for a bachelor's degree in arts or science, to $2,495 for a combined master's and doctoral degree. The payment typically was due in a single installment within two weeks of acceptance, according to Mr. Ezell.

Those who seek degrees from such institutions generally believe that they are earning a real diploma, the agent said, and many are foreigners. Mr. Simmons and Mr. Franklin were typical of diploma-mill operators, he explained, in that they often advertised heavily overseas--especially in South and Central America.

The Victims

"People from other countries hold degrees from American institutions in high regard,'' Mr. Ezell said. "They think any degree from America has got to be O.K.''

Thurston E. Manning, president of the Council on Postsecondary Accreditation, one of two federally recognized entities that assess the legitimacy of accrediting associations, said most people want the bogus degrees "as some kind of vanity element.''

But those who know what they are buying "are sitting on a time bomb,'' he added. "If they try to use their degree for anything at all, they should know it will catch up with them.''

Bogus Accreditation

Many of those who set up diploma mills also establish some sort of false accrediting association, Mr. Manning said. North American University and American National University were allegedly accredited by the National Accreditation Association in Riverdale, Md.

Mr. Manning said an associate of his once paid a visit to that association and found it was set up in the basement of a private home, where someone answered the phone during business hours using the name of the organization.

The National Accreditation Association has never applied for recognition by COPA, Mr. Manning added, "and they wouldn't have gotten recognition if they had applied.''

The U.S. Education Department recognizes COPA and the National Council for Accreditation of Teacher Education as the only organizations that can accredit teacher-education programs--COPA on a regional level and NCATE on a national level.

Richard C. Kunkel, executive director of NCATE, said his organization had accredited 552 institutions. On average, NCATE denies accreditation to one out of every four institutions that apply.

Mr. Kunkel said that about 1,200 institutions claim to offer teaching degrees. But, he noted, "you can't assume that the overlapping 700 are all diploma mills.''

Henry A. Spille, vice president of the American Council on Education and director of the Center for Adult Learning and Education Credentials, said education is one of six major areas of activity chosen by diploma mills. The others include business, counseling/therapy, medicine/health, nutrition, and religion.

Mr. Spille plans by this summer to publish a book about the problem of diploma mills, written with David W. Stewart, director of development for the Center for Adult Learning.

The book, he hopes, will spur states to increase their enforcement of licensing laws for educational institutions. While most states have such laws on the books, they are either too vague or simply not enforced, Mr. Spille said.

Most states "just don't realize the magnitude of the problem,'' he said.

Mr. Kunkel argued that states should require institutions to obtain accreditation from NCATE or COPA before becoming licensed.

Until such legislation is passed, said Mr. Manning, the only weapon society has against diploma-mill operators is "eternal vigilance.''

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