Nine on trial in diploma mill fraud

Nine people stood trial at Haidian district court this afternoon for fraud, in which they allegedly cheated over 200 company executives out of 3.4 million yuan ($539,200) by issuing them fabricated diplomas from fake foreign universities.

The gang was busted last year when police found they pretended to be with or cooperating with foreign universities, and issued forged diplomas to the applicants, according to Haidian district procuratorate yesterday.

The applicants would pay for registration, school and diploma identification, and would receive a diploma without attending courses or taking examinations.

Liao Huangqi and Li Yongqiang, the ringleaders of the alleged fraud, started business in 2007. They falsified names of foreign universities and targeted China's enterprise management. One of the suspects, Liao, had previously been a victim of Li's scam, but instead of reporting him to the police, Liao joined him to defraud others.

They started as education consulting companies near Chinese universities, and employed staff, so as to appear professional. Others arrested included the company accountant, sales staff and receptionists.

A degree from a made-up US university, for example the "American National University of Washington," cost hundreds of thousands of yuan and requirements for applicants included "over eight years experience working as management in a big or middle-sized company." "Graduates" could get a diploma with an official stamp from the Chinese Service Center for Scholarly Exchange with the Ministry of Education, according to a Beijing News report yesterday.

A victim, surnamed Liu, paid 190,000 yuan for an American university's doctorate in business administration in August 2010, and received a diploma five months later with the stamp, the report said. He later went to the real service center and realized he was conned.

"Schemes like this emerged last year," Rao Mingdang, with the Haidian procuratorate, told the Global Times. He said that previous fraud cases concerning education usually targeted students who failed college entrance examinations, or fake agencies pretending to be with Chinese universities attracting those customers with low admission standards.

This case is the biggest among seven similar cases processed by the Haidian procuratorate since last year. A total of 339 people were conned nationwide with similar schemes operated by 33 suspects, according to the court.

"The fake agencies operate in the name of a branch office of foreign universities in China, or claim they have authorized cooperation with the foreign schools," Rao said.

The target victims, among whom 80 percent are company executives, were only concerned with having a diploma record rather than a good opportunity to receive further education, he noted.

Xiang Guang, a mid-manager in a Beijing IT company, said that taking a foreign university program is a good opportunity to expand social connections. He is planning to apply for a foreign MBA program, but will not pay for a diploma from "degree mills," he said.

"Many foreign companies don't see academic records as that important, but some companies might prefer management to be well-educated with a PhD or master's degree," Xiang said.

It should have been easy for the victims to distinguish between fake and real agencies, said Rao, since a simple check on the Education Ministry's website could tell whether the universities they represent are officially authorized or not.

However, Xiong Bingqi, vice president of the 21st Century Education Research Institute, said people being conned should not be regarded as "victims" since they should know a diploma does not come so easily.

"They are greedy and want to gain without pain," Xiong said. People who paid for diplomas do not care whether they are fake or not since normally others will not check on the authenticity, and they just need the certification for their careers or simply to brag about, he said.