Law & Courts

As Diploma-Fraud Bill Advances, Operators Admit to Online Scam

By Andrew Trotter — April 04, 2008 4 min read
BRIC ARCHIVE

Three Washington state residents have admitted to selling thousands of bogus academic degrees through scores of phony online universities, while raking in millions of dollars from customers.

In plea agreements filed late last month in the U.S. District Court in Spokane, Dixie E. Randock, her husband Steven K. Randock Sr., and her daughter Heidi K. Lorhan admitted to having used Web sites and sold degrees in fields that included education, medicine, and nuclear engineering to customers from the United States and other countries from 1999 to 2005. The three pleaded guilty to federal criminal fraud charges.

In 2003, several Georgia teachers and administrators used degrees purchased from one of the bogus online schools, “St. Regis University,” to qualify for state pay raises.

State officials accepted the credentials from the phony university, which was purportedly in Liberia, because a Florida-based credential-evaluation firm vouched for their validity. (“Educators’ Degrees Earned On Internet Raise Fraud Issues,” May 5, 2004.)

Last fall, several other participants in the scheme also pleaded guilty to fraud and other criminal charges. They include charges related to bribery of officials from the government of Liberia, which for a time listed St. Regis University and other entities created by the group as accredited institutions. One other alleged participant reportedly is in plea negotiations with prosecutors.

Risk and Awareness

Alarms about the dangers of global trafficking in bogus academic credentials have been raised by members of the U.S. academic community, the Federal Bureau of Investigation, the Government Accountability Office, and members of the U.S. Congress.

Only nine states broadly outlaw or restrict the use of unaccredited academic credentials in applying for a raise or a job; an additional two states have more-narrow protections against the use of bogus degrees, according to Alan L. Contreras, the administrator of Oregon’s office of degree authorization.

U.S. Senate hearings in 2004 focused on federal employees who bought credentials from “diploma mills”—sometimes with public money—to win raises and promotions in government jobs.

Federal legislation reining in online diploma mills is part of a major higher education reauthorization bill that the House of Representatives passed earlier this year. The bill is currently being considered by a House-Senate conference committee, along with a version passed by the Senate that does not address diploma mills.

The bill, H.R. 4137, for the first time provides a legal definition of a diploma mill, while instructing the U.S. secretary of education to establish lists of legitimate accrediting agencies, colleges and universities, and equivalent overseas institutions. The bill would establish a “diploma mill task force” to develop guidelines to distinguish between legitimate and bogus degree-granting institutions and legislation to address fraudulent degrees. The bill also directs the Federal Trade Commission to designate the offering or issuing of a bogus degree as “an unfair and deceptive act or practice.”

Bill a ‘Good Start’

George Gollin, a physics professor at the University of Illinois at Urbana-Champaign who has crusaded against online diploma mills for years, says the House legislation, which was originally developed by U.S. Rep. Betty McCollum, D-Minn., is “a really good start.”

He estimates that the Randocks’ operation, at its height, sold between 2,000 and 3,000 degrees per year. According to the plea agreement, “the cost of a high school diploma was $350-$400, and an undergraduate or graduate ‘degree’ was $500-$1,200.”

Of the online diploma mills in the early 2000s, Mr. Gollin said, theirs was the most “sophisticated in presentation” on the Web, though “it wasn’t the biggest in terms of marketing.”

Still, said Mr. Gollin, who currently is a member of the board of directors of the Council for Higher Education Accreditation, based in Washington, “I think very roughly, U.S.-based diploma-mill operators are selling between 100,000 and 200,000 degrees yearly.”

In K-12 education, bogus credentials seem to be most prevalent among nonclassroom school employees who are seeking degrees to obtain promotions or higher pay grades, rather than teachers, Mr. Gollin said.

Online diploma mills “are easy to create, easy to move,” said Judith S. Eaton, the executive director of the Council of Higher Education Accreditation, which oversees domestic accreditation of colleges and universities. Despite a dearth of reliable data on the extent of the problem, Ms. Eaton called it “a cause for concern worldwide—both in the import and export of degrees.”

In fields such as engineering or medicine, she noted, allowing people to gain positions of responsibility with bogus degrees could have life-threatening consequences.

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A version of this article appeared in the April 09, 2008 edition of Education Week as As Diploma-Fraud Bill Advances, Operators Admit to Online Scam

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