By Emma Whitford & Janet Novack

There’s an old, but now fast growing degree mill industry doing an estimated $7 billion a year worldwide in fraudulent diplomas and transcripts.

A loved one is in the hospital or a nursing home. How do you know if that registered nurse or licensed practical nurse providing bedside care has received the proper training? In January, the Justice Department unsealed criminal conspiracy and wire fraud charges against 25 people in connection with the sale of 7,600 fake diplomas from three now-defunct Southern Florida nursing schools for $114 million. The certificates enabled untrained individuals to sit for the national nursing board exams and at least 2,800 of them passed.

The unsettling result: fake nurses were working everywhere from Texas nursing homes to a New Jersey assisted living facility to a New York agency caring for homebound pediatric patients. The Department of Veterans Affairs has had to remove 89 phony-degreed nurses from direct patient care as a result of what the Feds call “Operation Nightingale.’’ (The VA says it has uncovered no actual patient harm.) State licensing boards are also scrambling—Delaware has annulled 26 licenses of working nurses, Georgia has asked 22 to surrender their licenses, and Washington state is investigating 150 applicants with fraudulent credentials.

In recent months, Republican Congressman George Santos’ lies have drawn attention to the problem of fraudulent degree claims (in a survey last year, nearly a fourth of workers admitted to having fibbed on a resume about a college degree or credential), while ChatGPT has heightened concerns about how easy it is—and how much easier it might become—to cheat one’s way to a legitimate degree.

Now, the nursing diploma scandal and a new scholarly book are putting the spotlight on another underappreciated and fast growing fraud problem in education: phony degree mills. Fake Degrees and Fraudulent Credentials in Higher Education, edited by three Canadian academics, argues academic integrity scholars have paid too little attention to fake degrees, which are “just as important, if not more so, than other forms of academic fraud,’’ such as cheating and plagiarism.

In fact, there’s so little scholarly research on degree mills that the Canadian editors turned for insight to Allen Ezell, an 81-year-old retired FBI agent who holds 65 degrees, only one of them legitimate—an associate’s degree in accounting from Strayer University. Ezell spent the last 11 of his 31 years as an FBI agent running Operation Diploma Scam (Dipscam), before retiring at the end of 1991 to a job in corporate fraud investigations at a big bank, and then “retiring” again in 2010, to research, write and lecture on diploma mills.

While no one can really know the size of the market, Ezell estimates that phony degree mills now do $7 billion a year in sales worldwide, with much of that market in the United States and the Middle East, particularly the Gulf region. That’s exploded from $1 billion in 2004, he figures, thanks to the internet, the push to educate more adults online and the Covid-19 era shift to online classes for college-aged students too.

The U.S. has long been a hotbed for fake diplomas because of its emphasis on educational degrees, its decentralized system for accrediting schools and its relatively free market in education, the book asserts. House and Senate committees have held hearings on the problem for decades—but those haven’t actually led to any legislative fixes.

In separate interviews, Ezell and University of Calgary professor and academic integrity expert Sarah Eaton, one of the Canadian book editors, described how governments devote too little effort to shutting down diploma mills and hiring managers, including at universities themselves, do too little to check for fake degrees—whether they be from mills or fraudulent claims of degrees from legit universities (a la George Santos).

“We work in higher education where degrees matter a lot, and you need not just one, but multiple degrees to get a full-time job now,” Eaton says. “When we found out anecdotally that there was no systematic practice for hiring managers to check the credentials of applicants, we were floored.”

Notably, the United States does not explicitly outlaw advertising, issuing, or holding fake degrees, though prosecutors have used various broad criminal statutes, including wire and mail fraud, to go after different schemes. “There’s a law against people holding a fake passport, so why not against holding a fake degree?” asks Eaton.

Eaton and Ezell don’t underplay the difficulty of cracking down on the mills or screening out fake degree holders. For example, Eaton notes, creating a definitive blacklist of fake schools or diploma mills would be impossible, because the fraudsters can easily change their names, internet domains and other information to keep themselves off such lists. Instead, she suggests employers check with a reputable education agency—in the United States, the Department of Education maintains a list of current and formerly accredited and legitimate colleges and universities. Ezell points approvingly to Oregon, where by law, its Office of Degree Authorization (ODA) protects students, employers and licensing boards by compiling information on accredited programs, evaluating transcripts from unaccredited ones and providing information on degree mills.

Eaton’s book argues that the terms “diploma mill” and “degree mill” are often used too broadly by the media and those in higher education to describe low-quality, for-profit schools that leave graduates with comparatively worthless credentials—the kind of schools the government has attempted to cut off from federal student loans. That doesn’t make them fake degree mills, which provide no classes, require no work and often exist only online. As Ezell tells it, the 64 fake bachelors, master’s and doctorates he holds were obtained with money, sometimes claims of “life experience” and “really not doing any work.” The most work he ever did for a fraudulent degree was a four-page paper for a master’s. Today, presumably, he could have spit the paper out with ChatGPT.

Southeastern was small potatoes compared to some of today’s internet-enabled operations. The largest and most notorious diploma mill Ezell has studied is Axact, a 25-year-old Pakistan-based operation that sells transcripts and fake degrees, running from high school diplomas to PhDs. Despite a 2015 investigation of Axact, followed by criminal convictions in the U.S. and Pakistan, Axact is still up and running. In its 2016 prosecution of an Axact executive operating in the U.S., the U.S. Attorney for the Southern District of New York said Axact had collected $140 million through U.S. based bank accounts from tens of thousands of customers.

Ezell says Axact continues to operate through dozens of school names and web sites that are “nothing but layers and layers of flypaper”—trapping students looking to earn a legitimate online degree, as well as those looking for a fraud mill. For example, one current front, California Imperial University, touts its “Joe Biden Scholarship Program” and claims to be accredited by the American Higher Education Commission, with a red, white and blue logo to boot. (No, that isn’t a real accreditor.)

To hear Ezell tell it, the damage goes beyond fake degrees. He says Axact employees have blackmailed some holders of its degrees, demanding more money so they won’t be exposed. “Now that they have all this information about you, you’re in the right position to be extorted, to be blackmailed, to be threatened with publicity, with arrest, with deportation—to the point of suicide,” Ezell said. “We’ve seen single victims give up to $1.4 million.”

Axact, which has always insisted it’s a legitimate business, did not reply to requests for comment. On its corporate website, it describes itself as one of the world’s leading information technology companies with 45,000 employees and associates, and says that it has moved most of its operations out of Pakistan—though it still lists an Islamabad address.

As the fake nursing degree case shows, however, lots of funny diploma business is still made in America—and not just in Florida. In fact, the nurses case, though it was exposed after Eaton’s book went to press, aptly illustrates the book’s point about for-profit schools and a fragmented licensing and accreditation system providing fertile ground for diploma mills in the U.S.

According to an FBI agent’s affidavit and other documents filed in federal court in Maryland, the nursing degree investigation began back in 2019 with a tip to the FBI: two men were creating phony transcripts and nursing certificates from a Northern Virginia for-profit nursing school—a school Virginia shut down in mid-2013 for multiple violations. One of the men, Virginian Musa Bangura, owned the failed school, and in 2015 the pair started selling phony diplomas and transcripts (showing both clinical training and courses in anatomy, pharmacology and the like) for $6,000 to $18,000 a set, backdating them to before the school lost its license. (Both men plead guilty last year to wire fraud.)

In the U.S., nurses must graduate from an approved one to four year LPN or RN nursing program which includes both classroom and hands-on training, pass the national exam, and meet any additional requirements of the state they want to be licensed in. Currently, 36 states participate in the Nursing Licensure Compact, which allows nurses licensed in one state to practice in others. The fragmentation creates problems for state regulators. For example, Maryland doesn’t allow for-profit schools, but does allow graduates of other states’ for-profit schools; 111 graduates of the Virginia mill were licensed by Maryland before it instituted new fraud controls in 2018.

In 2018, the second man involved in the Virginia school scheme, Maryland resident Patrick Nwaokwu, also began working with Johanah Napoleon, a Florida mill operator who had purchased the for-profit Palm Beach School of Nursing in 2016. Florida shut down the school in 2017 because too few students were passing the national tests, but gave the school until December 2019 to graduate current students.

Napoleon, Nwaokwu and others used that window to begin selling backdated and fraudulent certificates and transcripts from Palm Beach—usually $17,000 for an RN degree and $10,000 for an LPN degree. They charged extra fees for things like having someone take New York State’s required online course on infection control. According to an FBI affidavit, 1,226 “graduates'' of the Palm Beach school applied for licenses in New York and 369 were actually licensed there. Why New York? It doesn’t limit how many times an applicant can take and flunk the national test, and once they hold a New York license, nurses can apply to work elsewhere.

In pleading guilty last November to conspiracy to commit health care fraud and wire fraud, nursing school owner Napoleon admitted she had personally obtained at least $3.2 million from the sale of fake nursing school documents. She’s yet to be sentenced, as she cooperates in the broader Southern Florida investigation that in January produced new charges against 25 folks. According to the government, the investigation is continuing.