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95-958 PDF 2004

ARE CURRENT SAFEGUARDS 

PROTECTING TAXPAYERS 

AGAINST DIPLOMA MILLS?

HEARING

BEFORE THE

SUBCOMMITTEE ON 21ST CENTURY 

COMPETITIVENESS

OF THE

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

September 23, 2004

Serial No. 108-72

Printed for the use of the Committee on Education and the Workforce

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

or 

Committee address: http://edworkforce.house.gov 

(II)

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN A. BOEHNER, Ohio, Chairman

Thomas E. Petri, Wisconsin, Vice Chairman 

Cass Ballenger, North Carolina 

Peter Hoekstra, Michigan 

Howard P. ‘‘Buck’’ McKeon, California 

Michael N. Castle, Delaware 

Sam Johnson, Texas 

James C. Greenwood, Pennsylvania 

Charlie Norwood, Georgia 

Fred Upton, Michigan 

Vernon J. Ehlers, Michigan 

Jim DeMint, South Carolina 

Johnny Isakson, Georgia 

Judy Biggert, Illinois 

Todd Russell Platts, Pennsylvania 

Patrick J. Tiberi, Ohio 

Ric Keller, Florida 

Tom Osborne, Nebraska 

Joe Wilson, South Carolina 

Tom Cole, Oklahoma 

Jon C. Porter, Nevada 

John Kline, Minnesota 

John R. Carter, Texas 

Marilyn N. Musgrave, Colorado 

Marsha Blackburn, Tennessee 

Phil Gingrey, Georgia 

Max Burns, Georgia 

George Miller, California 

Dale E. Kildee, Michigan 

Major R. Owens, New York 

Donald M. Payne, New Jersey 

Robert E. Andrews, New Jersey 

Lynn C. Woolsey, California 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Ron Kind, Wisconsin 

Dennis J. Kucinich, Ohio 

David Wu, Oregon 

Rush D. Holt, New Jersey 

Susan A. Davis, California 

Betty McCollum, Minnesota 

Danny K. Davis, Illinois 

Ed Case, Hawaii 

Rau ́l M. Grijalva, Arizona 

Denise L. Majette, Georgia 

Chris Van Hollen, Maryland 

Tim Ryan, Ohio 

Timothy H. Bishop, New York

Paula Nowakowski, Staff Director 

John Lawrence, Minority Staff Director 

SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS 

HOWARD P. ‘‘BUCK’’ McKEON, California, Chairman

Johnny Isakson, Georgia, Vice Chairman 

John A. Boehner, Ohio 

Thomas E. Petri, Wisconsin 

Michael N. Castle, Delaware 

Sam Johnson, Texas 

Fred Upton, Michigan 

Vernon J. Ehlers, Michigan 

Patrick J. Tiberi, Ohio 

Ric Keller, Florida 

Tom Osborne, Nebraska 

Tom Cole, Oklahoma 

Jon C. Porter, Nevada 

John R. Carter, Texas 

Phil Gingrey, Georgia 

Max Burns, Georgia 

Dale E. Kildee, Michigan 

John F. Tierney, Massachusetts 

Ron Kind, Wisconsin 

David Wu, Oregon 

Rush D. Holt, New Jersey 

Betty McCollum, Minnesota 

Carolyn McCarthy, New York 

Chris Van Hollen, Maryland 

Tim Ryan, Ohio 

Major R. Owens, New York 

Donald M. Payne, New Jersey 

Robert E. Andrews, New Jersey 

Rube ́n Hinojosa, Texas 

George Miller, California, ex officio 

(III)

C O N T E N T S 

Page

Hearing held on September 23, 2004 ..................................................................... 1

Statement of Members: 

McKeon, Hon. Howard P. ‘‘Buck’’, Chairman, Subcommittee on 21st Century Competitiveness, Committee on Education and the Workforce ........ 2

Prepared statement of ............................................................................... 3

Kildee, Hon. Dale E., Ranking Member, Subcommittee on 21st Century 

Competitiveness, Committee on Education and the Workforce ................ 3

Statement of Witnesses: 

Cramer, Robert J., Managing Director, Office of Special Investigations, 

U.S. Government Accountability Office, Washington, DC ......................... 21

Prepared statement of ............................................................................... 22

Ezell, Allen, Retired Agent, Federal Bureau of Investigations, Apollo 

Beach, FL ....................................................................................................... 5

Prepared statement of ............................................................................... 8

Morse, Jean Avnet, Executive Director, Middle States Commission on 

Higher Education, Philadelphia, PA ........................................................... 14

Prepared statement of ............................................................................... 16

(1)

ARE CURRENT SAFEGUARDS PROTECTING 

TAXPAYERS AGAINST DIPLOMA MILLS? 

Thursday, September 23, 2004

U.S. House of Representatives 

Subcommittee on 21st Century Competitiveness 

Committee on Education and the Workforce 

Washington, DC 

The Subcommittee met, pursuant to notice, at 11:05 a.m., in 

room 2175, Rayburn House Office Building, Hon. Howard P. ‘‘Buck’’ 

McKeon [Chairman of the Subcommittee] presiding. 

Present: Representatives McKeon, Petri, Castle, Ehlers, Tiberi, 

Osborne, Gingrey, Burns, Kildee, Tierney, Wu, Holt, McCarthy, 

Van Hollen, and Ryan. 

Staff present: Kevin Frank, Professional Staff Member; Sally 

Lovejoy, Director of Education and Human Resources Policy; Catharine Meyer, Legislative Assistant; Krisann Pearce, Deputy Director of Education and Human Resources Policy; Samantar, Deborah 

L., Committee Clerk/Intern Coordinator; Kathleen Smith, Professional Staff Member; Jo-Marie St. Martin, General Counsel; Ricardo Martinez, Minority Legislative Associate/Education; Alex 

Nock, Minority Legislative Associate/Education; and Joe Novotny, 

Minority Legislative Assistant/Education. 

Chairman MCKEON. A quorum being present, the Subcommittee 

on 21st Century Competitiveness of the Committee on Education 

and the Workforce will come to order. 

We are holding this hearing today to hear testimony addressing 

the question, ‘‘Are Current Safeguards Protecting Americans 

Against Diploma Mills?’’ Under Committee Rule 12(b), opening 

statements are limited to the Chairman and the Ranking Minority 

Member of the Committee. Therefore, if other members have statements, they will be included in the hearing record. 

With that, I ask unanimous consent for the hearing record to remain open 14 days to allow members’ statements and other extraneous material referenced during the hearing to be submitted in 

the official hearing record. 

[No response.] 

Chairman MCKEON. Without objection, so ordered. 

2

STATEMENT OF HON. HOWARD P. ‘‘BUCK’’ McKEON, CHAIRMAN, SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

Chairman MCKEON. Good morning, and thank you today for joining us for this very important hearing on the issue of diploma 

mills. This hearing is intended to examine questions about what 

constitutes a diploma mill, and hear more about the safeguards 

that currently exist in the law to protect consumers, taxpayers, and 

the Federal Government from the proliferation and tactics of fraudulent institutions claiming to provide a legitimate higher education. 

I want to start by welcoming our witnesses today and thanking 

them for joining us. 

No formal legal definition exists for a diploma mill, but they are 

generally regarded by many as an entity that lacks accreditation 

from a state or a professional organization. Diploma mills are also 

described as selling college and graduate degrees that are fraudulent or worthless because of a lack of standards in curriculum, instruction, and completion. 

However, there is more to the definition than that. It is important to differentiate between non-accredited institutions of higher 

education and diploma mills. I hope our witnesses will be able to 

draw that distinction for us here today. 

Additionally, stories and conversations about diploma mills tend 

to turn into conversations about online institutions and education 

over the Internet. Although many diploma mills operate their 

phony institutions of higher education over the Internet, it is important to distinguish between these scams and legitimate, credible 

online institutions that operate quality, accredited distance learning programs. 

Diploma mills harm students, taxpayers, and both Federal and 

state governments. They mislead consumers and employers, and 

pose dangers to legitimate institutions of higher education. 

Reliance on phony degrees is not a victimless crime. Take the deserving story of an individual claiming to be a physician in North 

Carolina who treated an 8-year-old girl for complications with diabetes. The girl’s mother trusted the ‘‘doctor,’’ based on his M.D. degree, and took her daughter off of insulin, as instructed. Sadly, her 

daughter died. The physician—he earned his degrees from bogus 

institutions. All of his diplomas came from diploma mills. 

Although the Federal Government has been successful in keeping 

phony institutions out of the Federal student aid programs, in recent years policymakers at both the Federal and state levels have 

begun to recognize the need to find ways to keep diploma mills out 

of business all together. 

I hope our witnesses can talk more about current safeguards that 

are in place, as well as offering insight into what more can be done 

to keep fraudulent institutions out of the marketplace. 

Thank you again for joining us here today to discuss this important topic. I want to also thank Congressman Castle for bringing 

this to our attention, and asking us to hold this hearing. He is a 

great colleague and a great member of this body. 

3

I look forward to hearing your testimony here today so that my 

colleagues and I can learn more about this very serious issue. I will 

now yield to Congressman Kildee for his opening statement. 

[The prepared statement of Chairman McKeon follows:]

Statement of Hon. Howard P. ‘‘Buck’’ McKeon, Chairman, Subcommittee on 

21st Century Competitiveness, Committee on Education and the Workforce 

Good morning and thank you for joining us today for this very important hearing 

on the issue of diploma mills. This hearing is intended to examine questions about 

what constitutes a diploma mill and hear more about the safeguards that currently 

exist in the law to protect consumers, taxpayers, and the federal government from 

the proliferation and tactics of fraudulent institutions claiming to provide a legitimate higher education. 

I want to start by welcoming our witnesses and thanking them for joining us here 

today. 

No formal legal definition exists for a diploma mill, but they are generally regarded by many as an entity that lacks accreditation from a state or a professional 

organization. Diploma mills are also described as selling college and graduate degrees that are fraudulent or worthless because of a lack of standards in curriculum, 

instruction, and completion. 

However, there is more to the definition than that. It is important to differentiate 

between non-accredited institutions of higher education and diploma mills. I hope 

our witnesses will be able to draw that distinction for us here today. 

Additionally, stories and conversations about diploma mills tend to turn into conversations about on-line institutions and education over the Internet. Although 

many diploma mills operate their phony institutions of higher education over the 

Internet, it is important to distinguish between these scams and legitimate, credible 

on-line institutions that operate quality accredited distance learning programs. 

Diploma mills harm students, taxpayers, and both federal and state governments. 

They mislead consumers and employers and pose dangers to legitimate institutions 

of higher education. 

Reliance on phony degrees is not a victimless crime. Take the disturbing story of 

an individual claiming to be a physician in North Carolina who treated an 8-year 

old girl for complications with diabetes. The girl’s mother trusted the ‘‘doctor’’ based 

on his MD degree, and took her daughter off of insulin, as instructed. Sadly, her 

daughter died. The physician? He earned his ‘‘degrees’’ from bogus institutions; all 

of his diplomas came from diploma mills. 

Although the federal government has been successful in keeping phony institutions out of the federal student aid programs, in recent years, policy makers at both 

the federal and state levels have begun to recognize the need to find ways to keep 

diploma mills out of business altogether. I hope our witnesses can talk more about 

current safeguards that are in place, as well as offer insight into what more can 

be done to keep fraudulent institutions out of the marketplace. 

Thank you again for joining us here to discuss this important topic. I look forward 

to hearing your testimony so that my colleagues and I can learn more about this 

very serious issue. 

STATEMENT OF HON. DALE E, KILDEE, RANKING MEMBER, 

SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE WORKFORCE 

Mr. KILDEE. I thank you, Mr. Chairman. I am pleased to join you 

at today’s hearing on diploma mills. This hearing represents an important opportunity to learn more about this increasingly concerning practice. I know that both of us are looking forward to today’s hearing and learning about this issue from our witnesses. 

Higher education in this country is recognized for its standards 

and the rigorous education it provides our students. Accreditation 

helps assure this rigor, enables us to insure that we are protecting 

taxpayer resources that are utilized for student aid. 

The quality of our institutions of higher education enable businesses to be certain they are hiring employees with the skills and 

4

knowledge they need to compete and remain profitable. Diploma 

mills undermine all this. 

Diploma mills impact everyday citizens. Consumers can and have 

been hurt when they receive care or services from individuals with 

false credentials. Doctors and other health professionals who practice with fraudulent degrees have inflicted irreparable harm upon 

their customers. 

Diploma mills also harm the integrity and perception that the 

public and employers have about higher education in this country. 

Individuals who purposefully or unknowingly buy degrees and 

other certificates from diploma mills are helping to perpetuate this 

fraud. 

Very simply, diploma mills need to be shut down. States need to 

be more forceful in their prosecution in monitoring suspect institutions. But the Federal Government also has an important role. The 

Department of Education needs to be vigilant in ensuring that 

accreditors are maintaining high standards when they review their 

institutions of higher education. 

But the Department of Education cannot and should not be expected to do this on their own. We need additional focus from the 

FBI and other agencies that can prosecute individuals who commit 

mail or wire fraud. Collectively, the efforts of states and the Federal Government can and should end this practice. 

I look forward to learning more today about what can be done 

to combat these fraudulent operations. And again, Mr. Chairman, 

I thank you and Mr. Castle for your deep interest in this matter. 

And I yield back the balance of my time. 

Chairman MCKEON. Thank you. I will now introduce our witnesses. First, we will hear from Mr. Allen Ezell. From 1960 to 

1991, Mr. Ezell served as an agent for the Federal Bureau of Investigation. During his tenure, Mr. Ezell directed the FBI investigation of DIPSCAM, a task force that worked to expose and shut 

down fraudulent degree programs. 

Mr. Ezell currently serves as vice president of corporate fraud investigative service for the Wachovia Corporation. 

Then we will hear from Ms. Jean Avnet Morse. Ms. Morse currently serves as executive director for the Middle States Commission on Higher Education, an association that seeks to promote and 

ensure quality assurance and improvement in higher education. 

The Middle States Commission is a regional accrediting agency recognized by the U.S. Department of Education. 

And finally, we will hear from Mr. Robert Cramer. Mr. Cramer 

currently serves as the managing director of the Office of Special 

Investigations at the U.S. Government Accountability Office, which 

is commonly known as the investigative arm of Congress. 

Prior to his current position, Mr. Cramer served as the assistant 

United States attorney in the southern district of New York. 

Before you begin, I would like to explain the light system we 

have there. You have 5 minutes to summarize your testimony. The 

green light means start. The yellow light means you have a minute 

left, and the red light means you’re done. 

We appreciate your being here, and we’re looking forward to, as 

I said, hearing from you. We will begin with Mr. Ezell. 

5

STATEMENT OF OTHO ALLEN EZELL, JR., RETIRED AGENT, 

FEDERAL BUREAU OF INVESTIGATIONS, APOLLO BEACH, FL 

Mr. EZELL. Good morning. Can you hear me, sir? Thank you. 

Mr. Chairman, Committee members, it is a pleasure for me to 

appear before the Committee today. Let me commend you for recognizing that diploma mills are a problem, and for holding these 

hearings. 

As you know, I am a retired FBI agent. For 11 years I conducted 

DIPSCAM, Operation DIPSCAM. I purchased 10 bachelor’s, 19 

master’s, 4 Ph.D.s, 2 M.D.s, and I assisted other FBI agents in the 

purchase of their degrees. We executed 16 Federal search warrants, 

we obtained 19 grand jury indictments, and we convicted 21 people. 

So as you can see, it can be done. 

Our defendants were male and female, black and white, young 

and old. Several had legitimate bachelor’s, master’s, and doctorate 

degrees. We lost no cases on appeal. The one case that went 

through the fourth circuit to the Supreme Court, the Supreme 

Court refused to hear it, so therefore the lower court’s affirmation 

stood. 

In those days, 1980 to 1991, degree mills were less sophisticated 

than they are today. Our largest degree mills sold about 2,500 degrees and grossed about $2 million. That is nothing compared to 

today’s degree mills. 

As you know, Senator Collins held hearings earlier this year and 

exposed 460 Federal employees, GS-15 and above, with these types 

of degrees, and determined that the government had spent 

$150,387.80 on some of these degrees. And this was just from six 

agencies and the Pentagon. She described this as the tip of the iceberg, and I agree. 

I wonder what we would uncover in the other 98 percent of the 

Federal agencies, and what action, if any, has been taken against 

those who were exposed? What word has gotten out? Degree mills 

are well over a $500 million a year business. Probably one million 

Americans have purchased and probably used fictitious credentials. 

Upon my retirement in 1991, the FBI no longer had a concerted 

effort in the area of education fraud. Thereafter, no Federal law enforcement agency considered this an investigative priority. Thus, 

no one investigated cases except on a catch as catch can basis. 

Yes, in recent years, we have seen successful cases involving 

James Kirk, LaSalle University in Louisiana, and Ronald Pellar in 

Louisiana and California, Columbia State University. 

Ironically, Kirk has a degree from Southeastern University, 

Greenville, South Carolina—one of my alma maters—my first case 

in DIPSCAM, and probably operated two schools while serving 

time in a Federal prison camp. LaSalle grossed $36.5 million and 

the FBI seized about $11 million in 8 bank accounts, after which 

Kirk was indicted and convicted. 

Ronald Pellar, however, holds another distinction. He operated 

his college scam while he was a Federal fugitive in another case. 

Pellar grossed between $20 million to $72 million, depending on 

who you believe. 

Still, these revenues are nothing compared with the behemoth 

operation university degree program. I am sure you have received 

one of their millions of spam e-mails which state ‘‘No required 

6

tests, classes, books, or interviews, and everyone is approved.’’ 

That’s my type of school. 

This operation run by several Americans from boiler rooms in Jerusalem and Bucharest, sold degrees, transcripts with verifications 

on at least 18 schools, probably with 20 spin-offs or clones, from 

1998 to 2003, and in my opinion, grossed $435 million. 

The registrars brag that the United States residents account for 

the majority of their sales. Since I have a degree in accounting, 

imagine the cost of goods sold when you have no facility, no faculty, 

no depreciation, no salaries, and no pensions. You sell bachelor’s, 

master’s, and doctorates in everything from aviation to zoology, and 

26 in the medical field. 

The backbone of UDP is their degree verification service and recommendation letters from the professors. Where do you think these 

people with degrees in medical majors are doing with their degrees? Where do you think they are employed? And while no one 

in Federal law enforcement is doing anything about it, these operators have nothing to fear. 

While I was working on my testimony for today, I received a return call on a spam that I had responded. I was offered my M.D. 

degree this Tuesday for $1,995 from Somerset University. Several 

hours later, he called me at the end of his shift and his price had 

gone down to $995. Now he was calling me from New York, although they have an address in London, England. 

Degree mills have blossomed with the worldwide use of the Internet. They have made it possible for legitimate distance education, 

and that’s where the degree mills also hide. Fictitious credentials 

are a worldwide problem. Our crooks sell our wares to foreign students, and the foreign crooks sell their paper to our citizens. The 

Internet knows no borders, and anything is available for a price. 

As you said, degree mills are a problem, because they damage by 

misunderstanding in the public mind, the legitimate educational 

institutions. They devalue earned degrees with lookalikes and 

soundalikes. They confuse the public. They defraud students who 

believe the school is real. They deceive employers, customers, clients, and patients. They lower the prestige abroad by defrauding 

foreign students. 

Dr. John Bear and I testified in United States District Court in 

Charlotte on a physician whose degrees came from three of my 

alma maters. He was a ringer. He was convicted and he is in Federal prison. 

You, along with employers and real educational institutions must 

not only be aware of the degree mill institutions and names of 

schools you don’t recognize. Then you have got counterfeit degrees 

and transcripts on our legitimate colleges and universities, because 

also available on Internet are those loss replacement diploma services selling fake degrees and transcripts from legitimate, accredited 

traditional colleges and universities. 

I have purchased counterfeit degrees of both universities that I 

have sent my daughters to. Today I can buy a counterfeit degree 

and transcript from George Washington University, University of 

Maryland, and hundreds of others for less than $100 with no impunity. It should not be this easy. 

7

In my opinion, degree mills can be stopped. It is basic supply and 

demand. Have the FBI dedicate one FBI agent to work education 

fraud exclusively, purchase some diplomas, execute some search 

warrants, make some arrests. The word will get out. I guarantee 

it. These people pay attention to the market place. 

At the same time, prosecute and publicize those egregious instances where diploma mill paper was used to obtain employment, 

get raises, or where government funds were used, to buy the paper 

to begin with. This will decrease the demand, which in turn will 

dry up the supply side. This can be done if you have the desire. 

Encourage the Department of Education to develop their webbased list of legitimate schools. Encourage states, just like you 

were saying, to adopt legislation similar to that of Oregon, and establish an office of degree authorization and to maintain a website 

which indicates which school degrees can be used for educational 

credentials in that state, or the user faces arrest. 

At the same time, the Federal Government needs to be consistent 

in all of its handling of Federal employees using degree mill degrees. I was appalled that Laura Callahan, the official at the Department of Homeland Security, was hung out to dry after a 19 

year career for her possession of degrees from Hamilton University, 

especially when you consider that the position she held held no 

educational qualifications. She is not street-wise. She had heard of 

degree mills, but not accreditation mills, and did not know it was 

a degree mill. 

She obtained these degrees over a several-year period with her 

own funds, no Federal money involved. In my opinion, her agency—then, the new Department of Homeland Security—was gun shy 

as a result of all the publicity they received here in Washington. 

They took the easy way by rescinding her security clearance, showing her the door, resulting in her later resignation. 

Possession of a degree mill diploma is not itself grounds for revocation of a security clearance. With all the degrees that I bought, 

nobody ever came to me and questioned revoking my security clearance as an FBI agent. 

What has happened to Charlie Abell, Deputy Under Secretary of 

Defense, with a degree from Columbus University; Jimmy Shirl 

Parker, Federal Technology Service, GSA, California Coast University; Daniel P. Matthews, Transportation Department, Kipp College; and many, many others? 

In our effort to get this message out, Dr. John Bear and I have 

written a new book titled, ‘‘Degree Mills,’’ which will be available 

in January. Additionally, we have a website under construction, 

degreemills.com, which will be operational shortly, where we can 

post up-to-date information on who is selling who to what for how 

much on a daily basis, because diploma mills change their names 

as fast as you and I change our socks. 

Further, Dr. Bear and I have associated ourselves with the commercial services division of U.S. Investigation Service in order to 

maintain and update their comprehensive degree mill data base. 

I know I have gone quickly to summarize this. The field is very 

broad, and you have opened up a can of worms that goes in many 

places. I thank you for the opportunity to be here. It is an honor 

8

for me. And any questions that I can answer, I will be glad to. 

Thank you. 

[The prepared statement of Mr. Ezell follows:]

Statement of Otho Allen Ezell, Jr., Retired Agent, Federal Bureau of 

Investigation, Apollo Beach, FL 

Mr. Chairman and Members of the Committee: 

It is my pleasure to be here today. Let me commend your for recognizing Degree 

Mills as a problem and for holding these hearings. Although I was not present during the January and March, 1924 Congressional Degree Mill hearings, I was present 

for Congressman Claude Pepper’s hearing in December, 1985, and Senator Susan 

Collins’’ hearing in May, 2004. Although there was a lot of talk during these hearings, there were no lasting actions taken. Now here we are again. In fact, the entire 

matter has just blossomed with the advent of the internet. 

For background, staff members for Congressman Pepper were able to purchase a 

Ph.D. for the Congressman from Union University, Los Angeles, Ca., and staff for 

Senator Collins were able to purchase both Bachelor and Masters degrees in Biology 

and Medical Technology respectively for her from Lexington University, based in 

Middleton, New York (via www.Degrees–R–Us.com). I find it odd these entities were 

never ‘‘raided’’ by federal or state law enforcement in execution of a federal search 

warrants, and their operator’s were never prosecuted. I have previously arrested Degree Mill operators with less probable cause. As high profile as these schools were, 

and nothing happened, I find this unbelievable. 

I agree with Senator Collins that what her committee uncovered is just the ‘‘tip 

of the iceberg’’. They found 1,200 resumes as contained in a government-sponsored 

data base, listed degrees from 14 different Degree Mills. After a degree audit of six 

federal agencies, including the Pentagon, for GS–15 and above positions, they determined at least 463 federal employees (at these agencies) had obtained degrees from 

unaccredited schools. The United States Government paid $150,387.80 to several of 

these schools for those federal employees who requested reimbursement. Keep in 

mind these schools do not have a dollar charge per credit hour (only X dollars per 

degree), thus they created a fictitious billing statements for a per course/hour 

charge, which was then sent to their agency for payment. 

Thus, if only two percent (2%) of federal agencies were audited at which they 

found 463 employees at a cost of $150,387.80 to the government, I wonder what the 

results would be if a degree audit would be conducted at the remaining 98% of federal agencies. Further, Senator Collins committee found the five Degree Mills they 

encountered with the above employees had, from 1995–2003, grossed $111,000,000. 

I also wonder what the entire universe of Degree Mills looks like. Senator Collins 

committee estimates Degree Mills gross at least $500,000,000 each year (and this 

may even be understand). 

I am a second generation FBI Agent having retired in December, 1991. For an 

eleven year period I investigated Degree Mills throughout the United States and 

abroad. Collectively, these many investigations were called Operation Diploma Scam 

(DIPSCAM). During this time, I responded to advertisements as a potential buyer, 

received the school’s literature via the United States Mails, made and recorded 

interstate telephone calls to and from my schools, all resulting in my purchasing 

various degrees which were accompanied by transcripts. 

In all those years, the most new work I did were several papers (not more than 

5 pages it length) for Masters Degrees. In some instances, I negotiated with the 

school representative relative on my Grade Point Average (GPA). All of my schools 

offered degree verification for employment purposes and some even had alumni association, class rings, school decals, sweat shirts, hats, decals, etc., all indicia of legitimacy. However, most did not have a campus nor an educational facility, faculty, 

any meaningful academic instruction, nor educational motivations, etc. Since their 

advertisements/brochures/literature looked good, thus they must be ‘‘real’’. [Put 

1,000 or 2,000 miles between a students mail box and his school, anything is possible. The student never knows the school only exists at a mail drop/answering service in a distant city]. 

During our first investigation, after we had purchased our Bachelor, Master, and 

Ph.D. degrees from Southeastern University, Greenville, S.C., all based on life experience (with no new work submitted), officials of then North Carolina National Bank 

(now Nations Bank), Charlotte, North Carolina, (in cooperation with the FBI), corresponded with officials of Southeastern University and indicated two young men 

had applied for positions with the bank, thus they sought verification of their degrees. The President of the Southeastern University then verified to bank officers, 

9

our degrees (and transcripts) via the U.S. Mails, and made glowing remarks about 

his two graduates. When we took a tour of our alma matter, we were recruited to 

raise funds for the university and keep one third for ourselves. During our tour, the 

President of the university showed us where our student files were kept along with 

the files of their many other graduates. Later, the Assistant United States Attorney, 

Western District of North Carolina, wanted to be able to prove in U.S. District 

Court that Southeastern Seminary was as crooked as the university, thus a third 

FBI Agent negotiated for a Masters degree in Divinity and agreed on a price of 

$5,000. On 5/4/81, at the appointed time for the Agent to pay for, and pick up his 

degree, we three arrived as FBI Agents with a federal search warrant. We took all 

documents and other items described in the search warrant, including a cabinet full 

of student files. We then left for Charlotte, which is about 90 miles North of Greenville, S.C. The seized items were then entered into evidence and the appropriate paperwork completed—none of the records had yet been reviewed. 

The next morning we received a telephone call from local authorities in Greenville, South Carolina, who advised that Dr. Alfred Q. Jarrett, President and founder, 

Southeastern University, had committed suicide during the evening, after we left 

his university which had been operated from several rooms in his personal residence. 

When we reviewed the records of Southeastern University, we determined during 

its eleven year existence, they had 620 ‘‘graduates’’ of which 171 were employed by 

federal, state, and local governments employees. Some ‘‘graduates’’ held Senior Executive Service (SES) positions in Washington, D.C. 

As result of the above, we created a computerized date base of all our ‘‘graduates’’, 

then and on an on going basis, we furnished these names to the Office of Personnel 

Management, Inspectors General of the Respective agencies, and to the various 

State Attorneys General. As each DIPSCAM case was adjudicated, we entered a list 

of the schools ‘‘graduates’’ into evidence, thus making it a ‘‘public record’’ which then 

became available to universities and the media. At the time of my retirement in December, 1991 the DIPSCAM data base contained the names and all pertinent information on over 12,000 ‘‘graduates’’. Some worked in private industry, education, law 

enforcement, medicine, military, and numerous state and federal agencies. 

During DIPSCAM, from 1980–1991, we purchased 40 degrees, executed 16 federal 

search warrants, had 19 indictments returned by the Federal Grand Jury, convicted 

21 persons, and over 40 schools were dismantled. We never lost a case and won the 

only two convictions which were appealed. Only one case (with multiple convictions) 

went to the U.S. Supreme Court, which the court declined to hear thus sustaining 

the opinion of the Fourth Circuit Court of Appeals affirming the conviction. During 

DIPSCAM, the highest gross revenues we found were $2,000,000 for our Degree 

Mills. [Details for many of the schools we visited are contained in the attached listing and articles]. 

Degree Mills are not just recent problems. We have had them in the United 

States since about 1835. As long as we have a credential conscious society, where 

the degree/transcript you possess gets you the interview/promotion/salary increase 

(instead of the requisite knowledge/job skills), then we will always have Degree 

Mills. I say this because Degree Mills are nothing but criminal enterprises operated 

for profit. This is Education Fraud and no different from any other fraud (and in 

some instances similar to counterfeiting), only here the crooks are selling either fictional or worthless academic credentials (and again, sometimes counterfeit documents). 

These crooks are like chameleons, they will change their criminal enterprise to 

adapt to their surroundings and conditions, thus their scheme will always ‘‘blend 

in’’. This is what has happened in the last decade with the acceptance of the concept 

of credit for life experience, non-traditional education, distance learning, etc. The 

Degree Mill operators due their best to blend in with legitimate colleges and universities offering real distance learning. In fact, many have copied materials for their 

web sites from legitimate colleges and universities, and in some instances, even 

named their entity one letter or word different from the real school, intentionally 

wanting its victims to confuse it with the real school which has name recognition 

and reputation. These Degree Mill operators know how to expertly adapt to current 

conditions and how to exploit gaps in federal and state law, law enforcements priorities, prosecutive guidelines, etc. 

I know of one instance where an individual who operates numerous Degree Mills, 

after the horror of 9/11 and resulting creation of the Department of Homeland Security, he then created the International College of Homeland Security where he offers 

certificates/diplomas in homeland security, in addition to Bachelor, Master, and 

Ph.D. degrees in public administration/homeland security and public safety, along 

with certificates and diplomas in human reliability/beyond crisis prevention. He 

10

even has a ‘‘Homeland Security Specialist Program’’ where he discusses our vulnerability to terrorism in his sales pitch. If this is not enough, this college states ‘‘all 

of our course designers, developers, and professors are experts in their particular 

field of homeland security and the public safety. Most are former or present FBI 

Agents, criminal investigators, emergency and disaster panning professionals, lawyers, U.S. Border Patrol personnel, U.S. Customs professionals and homeland security personnel.’’ [I highly doubt this]. 

They also operate Homeland Security University whose motto is ‘‘Protecting Your 

Country Through Knowledge’’ (www.homeland-security-college.org). This university 

also has an on line ‘‘University Store’’ where various items are for sale bearing the 

school logo. 

Today, this college indicates it is located in Moscow, Russia; yesterday, it was in 

Washington, D.C.; Rochester, New York; Mariastein, Switzerland; Liberia and Canada, even though it is operated by Richard J. Hoyer, Rochester, New York, with assistance from Dixie Randock, Spokane, Washington, and can be contracted through 

www.4acollegedegree.com. They also operate St. Regis University of Monrovia, Liberia and various related entities. St. Regis University, (and its related entities), is 

probably on of the largest Degree Mills operating today. These universities are highly mobile, and their purported addresses change frequently. 

Degrees from St. Regis University have appeared all over the United States. Recently, eleven school teachers in Georgia were found to have graduate degrees from 

St. Regis University and these teachers had been paid increased salaries for several 

years because of these graduate level degrees. Once the $36,000 has since been repaid by the teachers, whose teaching credentials were later revoked, they all resigned. State officials are considering if they will also prosecute these teachers. If 

just one state has 11 ‘‘graduates’’ of St. Regis University for which they were paid 

increased salaries for these graduate, I wonder how many graduates are employed 

in the remaining 49 states, and how many tax dollars are being paid. Under the 

No Child Will Be Left Behind Act, most teachers have until 2005–2006 to meet federal standards for being ‘‘highly qualified,’’ which can include holding an advanced 

degree in the subject they teach. This increased pressure on the teachers, in conjunction with teachers busy schedules, may be turning them to Degree Mills. 

In San Antonio, Texas, many firemen were recently found to have degrees from 

St. Regis University, thus they received increased salaries. This too made its way 

into the press. Again, I wonder where else, and in other professions, where this is 

happening. 

The Chrysler Foundry in Indianapolis, Indiana, will be closing in 2007, thus many 

of these displaced employees feel the need to obtain a college degree before they reenter the job market. Chrysler offers it employees up to $4,600 each year in tuition 

assistance, with the requirement that the courses are from an accredited institution. 

Chrysler, with the help of the local UAW, promoted and paid for the St. Regis program. More than 76 employees enrolled in St. Regis University. That’s at least 

$42,000. Now that this scam has been exposed by WTHR TV in Indianapolis, may 

Chrysler workers are embarrassed and outraged. A Bachelor’s Degree at St. Regis 

University is just $895. (A listing of all Hoyer/Randock’s schools is attached). Fictitious or worthless accreditation is another integral building block of these Degree 

Mills. 

These and other Degree Mills do not operate in a vacuum. These are professional 

operations, which take planning, preparation, and organization in order to run 

smoothly and maximize profits. [Note the education of its students is not mentioned 

because this is not their goal]. Their window dressing (camouflage) may include: 

A. A 3rd party academic consultant or referral entity 

B. An independent accreditation entity to accredit the Degree Mill 

C. The Degree Mill itself- can be a store front, mail drop, or rented office (or just 

‘‘virtual’’) 

D. A transcript/records storage/verification service—provides certified transcripts 

to graduates and verification of degrees to employers 

E. A 3rd party academic credential evaluation service...degrees from l are equivalent to l. [Many employers have been fooled by this]. 

Thus, the public/business/government must not only beware of the Degree Mills 

which change their names almost daily, then we have the Accreditation Mills, Academic Consultants/Referral Entities, Transcripts Verification/Records Storage entities, and Credential Evaluation services—which support the Mills and are all tied 

in to the Degree Mills. When an organizational chart is prepared for a large Degree 

Mill, it probably resembles an octopus with it numerous tentacles. 

Years ago, if a criminal had prayed for a way to reach the public without spending 

a fortune on postage; prayed for a means to get their catalogues into peoples hands 

without incurring great printing costs; prayed for an alternative to buying expensive 

11

advertising in newspapers and magazines; and prayed for a way to run a business 

anonymously along with banking off-shore, electronically and privately, his prayers 

would be answered shortly. 

Along came THE INTERNET. At no other time in the past 25 years have I observed such a boon to this type of white collar crime. The internet know no borders—our crooks are selling their worthless degrees to persons in other countries; 

conversely, their crooks are selling their worthless degrees to our citizens. Several 

times, our crooks have established their base of operation for their Degree Mills in 

foreign countries as a means of thwarting U.S. law enforcement agencies and regulators. The reverse is also true—last year I observed a Degree Mill whose web site 

showed the skylines of Jacksonville and Tampa, Florida, and they had a local Florida address (a mail drop). When I checked to determine where its operators were 

located, it was Hong Kong, China. 

If the above (in conjunction with desk top publishing, cut and paste, etc.) is not 

enough to make you question all academic documents, then we have ‘‘lost replacement degree services’’ or ‘‘novelty documents’’ or ‘‘fake diplomas and transcripts’’ in 

the names of legitimate, accredited, traditional colleges and universities which are 

available via many web sites today for less than $100. Anything and everything is 

available for sale on the internet today. Some of these sites are: 

www.diplomamasters.com, www.diplomaservices.com, 

www.diplomasforless.com, and www.diplomaville.com (copies of these web 

sites are attached to this statement). 

For the past ten years, detection and prosecution of Degree Mills has been on a 

catch-as-catch-can basis. There has been no concerted effort by any federal or state 

law enforcement agency to ferret out Degree Mills, prosecute their operators, and 

prosecute those persons who knowingly purchase and use these fictitious credentials. Yes, there were isolated instances where Degree Mills were investigated by 

the FBI and USPO and prosecuted [La Salle University in Louisiana-operated by 

James Kirk, and Columbia State University in Louisiana/California as operated by 

Ronald Pellar], only after numerous complaints had been filed by victims. Both LaSalle University and Columbia State University, due to their advertisements in national publication, they were highly visible to all, (including law enforcement) especially with some of their advertised claims (a degree in 27 days, etc.). Ironically, 

Kirk (a ‘‘graduate’’ of one of my alma maters, Southeastern University) later operated two schools from his cell at a federal prison camp, whereas Pellar operated Columbia State University while he was a federal fugitive resulting from another court 

action. Kirk/LaSalle University grossed $36.5 million and Pellar/Columbia State 

University grossed somewhere between $20–72 million. But this is still pocket 

change when considered in the shadow of the ‘‘University Degree Program’’. 

By far, the largest and most sophisticated Degree Mill operation ever conducted ‘‘University Degree Program’’ probably grossed about $435 million from 1998 though 

early 2003, when the Federal Trade Commission filed restraining orders in order 

to stop another smaller fraud (International Driving Permits) which were being sold 

by the same criminals, from the same boiler rooms, via the same computer addresses. This operation, run by Yacov Abraham, and relatives, of Boston, New York City, 

and Los Angeles, through two ‘‘boiler rooms’’ (telephone call centers) in Jerusalem 

and Bucharest, employed 45 people per shift (two shifts daily) in order to primarily 

call residents of the United States and Canada. This is the operation which caused 

millions of spam mails to be sent daily all over our country. The FTC had over 

90,000 different spams from this operation. Generally, initial cost for the degree was 

$2,400, less then $500 ‘‘instant scholarship’’, and then the bargaining began. The 

‘‘graduation kit’’ included the diploma, transcript (with life long verification service), 

a sheet containing the appropriate telephone numbers for verification services, and 

two letters of recommendation from Professors you have never met nor spoken to. 

You could pay be check, credit card, wire transfer to their ‘‘accountant’’ in London 

or Cypress. They even accepted American Express, Master Card, Visa, etc. [Imagine, 

getting frequent flyer miles at the same time as your degree]. University Degree 

Program schools utilized accommodation addresses in Scotland, United Kingdom 

(London), The Netherlands, Switzerland, etc., with degrees drop shipped abroad and 

re-mailed in the Los Angeles area. This was a very sophisticated name/telephone 

number, knowing exactly where they were in the pitch when you were last contacted. 

During this six year period, UDP sold degrees/transcripts on eighteen schools, 

then its employees began their own spin offs, which probably total about fifteen 

more and continue to this day. Many UDP employees probably thought, now that 

they had been trained on the operation, and it was so profitable (very little overhead 

since there is no campus, buildings, faculty, retirement accounts, etc.), and I can 

steal the boiler room scripts, why not start my own school-which they did. (Details 

12

regarding all UDP schools and spin offs, is attached. Also attached is a listing of 

the degrees sold by UDP schools in the medical field). Where do you think these 

‘‘graduates’’ who purchased degrees in medical fields are employed? Imagine a business which has two telephone marketing rooms, 45 employees each, two shifts per 

day—all selling degrees, transcripts, with verifications. 

Ironically, since I still respond to spams, as I write this document, at 11:51AM 

on 9/21/04, I received a call from one Charles Baker, in New York State, telephone 

(917) 254–4102, who introduced himself as a Registrar representing Somerset University whose web site is located at www.somersetuniversity.org. He stated they are 

an ‘‘international correspondence diploma program’’ which has been around since 

the 1980’s. In less than one minute, he found me qualified for my MBA degree 

(comes with a student identification number, certified transcripts, professor letters 

of recommendation, verification of degree details, and we agreed on a modest GPA 

of between 3.5—3.8 (magna cum laude). The date of the degree is of my choice. The 

entire package will be sent to me within 10–15 days via Federal Express—all for 

the modest cost of $1,995. He pointed out I can not use this degree for transfer purposes (although many have tried), but this is designed for ‘‘professional purposes, 

to get pay raises, and promotions’’. He is sending me an e mail to confirm what I 

will get for my money and will call back in 30 minutes to see which credit card I 

want to use. [This sounds like a UDP clone to me]. 

There are 2,567 unrecognized schools (many of which are Degree Mills) and 202 

unrecognized accreditors (some are operated by the same persons as the Degree 

Mills). Thus it is easy for the operators of Degree mills to ‘‘blend in’’. 

Staff has asked what I have done to ensure Degree Mills do not proliferate. 

As an FBI Agent, for an eleven year period, I identified as many Degree Mills 

as possible, thereafter ‘‘making cases’’ on these entities and their operators, resulting in their indictment, arrest, and conviction. The side benefit was the closure of 

the Degree Mill. In not a single instance did the Degree Mill survive the arrest and 

convection of its principals. Education Fraud was never an investigative priority of 

the FBI, In fact, the Charlotte FBI office took some heat from FBI Headquarters 

for all its work on Degree Mills. After my retirement and the ending of DIPSCAM, 

the FBI made no organized effort in this arena. As if this was not bad enough, The 

Internet was now world wide and the Degree Mill operators quickly realized its potential and its world wide market. 

After retiring from the FBI, I have continued to stay abreast of Degree Mill comings and goings by responding to advertisements and spams, like I mentioned above. 

It is only in this way one will know—what is being sold, by whom, and for how 

much.’’ I have written several articles on the subject, and have made presentations 

to both government agencies, educational groups, and to law enforcement. I have 

consulted with prosecuting and defense attorneys, and have consulted with federal 

prosecutors in the area, and attended Senator Collins two day hearings in May, 

2004. 

Dr. John Bear and I have written a reference book on this subject, titled ‘‘Degree 

Mills’’ which is being published by Prometheus Books. This book will be available 

in January, 2005. We have also established a web site, www.DegreeMills.com which 

will be operational shortly as a means to keeping people up to date on what’s happening in the world of Degree Mills. Additionally, we are part of a network of like 

minded professions in this area. Further, Dr. Bear and I have associated ourselves 

with the Commercial Services Division of U.S. Investigations service in order to 

maintain and update their comprehensive Degree Mill data base. 

Staff has also asked what can be done to identify why Degree Mills are a problem. 

In my opinion, Degree Mills are a problem because they: 

• Damage by misunderstanding—similar to counterfeit currency, if I can no 

longer trust the currency I am give, then its value diminishes. If I can’t rust 

the educational credentials I am presented, then they are worthless. 

• Devalue earned degree (look-a-likes and sound-a-likes). I have previously purchased counterfeit diplomas from both of my daughter’s alma maters (University of North Carolina and University of Florida). These were exact replicas, except the signatures were incorrect for my graduation date. Agreed, I did not 

have transcripts, but those were available to me elsewhere. I realize you will 

never be able to take away the education my daughter’s received, however, 

when counterfeit degrees of our legitimate, regionally accredited, traditional 

universities are available for sale via the internet, this can do nothing but take 

some of the glitter off the real earned degree. 

• I have also seen instances where the criminal deliberately established his internet based school in the exact name as a legitimate university two thousand 

13

miles away. I recall the Western Washington State University which was being 

operated from Norcross, Georgia, and designed for students to believe this was 

the legitimate Western Washington State University in Wellingham, Washington. • Confuse the public—I recall the United States University of America, ostensibly 

located at an address on Wisconsin Avenue in Washington, D.C. In reality, the 

addresses it used was the physical address of the United States Post Office 

building on Wisconsin Avenue, where its post office box was located. They also 

used the address of the Sincerely Yours Answering Service. Needless to say, the 

school colors were red, white, and blue. This school targeted foreign students 

who mistakenly presumed this university tot be government approved/sponsored based on its name and address in Washington, D.C. [In reality, its operator was located in Palatka, Florida, before he later fled the United Sates to 

avoid arrest]. • Defraud ‘‘students’’—Many Degree Mills have excellent web sites, quality multi 

colored publications, use all the right buzz words, portray a distinguished faculty, pictures of grand buildings (some are in reality national historic sties, public buildings, etc.), and some even offer a ‘‘virtual tour’’. All this, in addition to 

its ‘‘accreditation’’. Many even pirate their text from the web sites of legitimate 

colleges and universities. These are criminal operations, run by slick folds and 

are designed to deceive its potential students. Depending on the sophistication 

of the Degree Mill, it can be easy to fall victim, without truly knowing it is in 

fact a Degree Mill. 

• Deceive employers, customers, clients, patients—Remember the Degree Mill is 

established to sell you the diploma with the backup verification of the degree 

awarded. The heart of its hustle is the verification it provides you later for the 

new job, promotion, etc. Not only will they provide you verification, they will 

provide you with letters of recommendation from several professors. [You would 

have had a hard time meeting these Professors in view they did not exist.]. 

Sometimes, we find the same professors at numerous schools. 

• Lower prestige abroad—see all the above 

Staff has also asked what safeguards and strategies can be developed to ensure that 

consumers, state governments, and the federal government are protected against 

fraudulent degrees and institutions. 

• Encourage the Department of Education (which held its ‘‘Diploma Mill Summit’’ 

on 1/15/04) to develop and publish on the internet, a web based listing of legitimate (accredited) colleges and universities in the United States. Once published, publicize The fact this list exists. In this manner, a potential student 

will not have to dig for the information, but can immediately locate this list. 

• Encourage all states to develop educational statutes similar to or identical to 

the State of Oregon and the resulting State of Oregon, Office of Degree Authorization (www.osac.state.or.us/oda). The ODA maintains a web site on which all 

aspects of the Oregon education statues are detailed, along with a list of illegal 

degrees in Oregon for which persons using same as academic credentials in Oregon can be arrested. Also listed are unaccredited colleges whose degrees are 

approved by ODA for use in Oregon (mainly Bible schools). (A copy of the Oregon statutes and the ODA web site along with its illegal schools list is attached). 

• We do not need any new federal statutes. The Fraud by Wire, Mail Fraud, Computer Fraud, Conspiracy, Money Laundering, and Aiding and Abetting statutes 

will do the job if someone applies them. Degree Mills can be stopped, if only 

someone wants to. Request the FBI or U.S. Postal Service to assign one investigator to work on Educational Fraud exclusively. Let them respond to some advertisements, purchase some degrees and transcripts, do some undercover work, 

execute several search warrants, seize assets, obtain indictments and make 

some arrests. I guarantee you the word will get out immediately in this small 

tightly knit community of Degree Mill operators. Normally, they all keep up 

with their competition. 

• Remember the basics of Supply and Demand. If we decrease the value of the 

bought degree and transcript, then correspondingly, we will dry up the production (supply) side. If both state and federal authorities prosecute the most egregious users of the Degree Mill paper, and at the same time arrest and close 

down the Degree Mill operators, we will thus achieve our desired objective. If 

no one wants the papers, then no one will want to produce the paper, since it 

won’t sell. 

• The Federal Government needs to be consistent in all its handling of federal 

employees using Degree Mill degrees. I was appalled that the official at the DeVerDate 0ct 09 2002 19:10 Dec 05, 2004 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 H:\DOCS\95958 EDUWK PsN: NNIXON
14

partment of Homeland Security was hung out to dry after a 19+ year career 

for her possession of degrees from Hamilton University, especially when you 

consider the position she held had no education qualification. She is not ‘‘street 

wise’’, had heard of Degree Mills bur not accreditation mills, and did not know 

it was a degree mill. She obtained these degrees over a several year period with 

her own funds-no federal money involved. In my opinion, her agency (the then 

new Department of Homeland Security) was gun shy after all the publicity this 

received in the Washington, D.C. press, then took the easy way out by rescinding her security clearance, and showing her the door, resulting in her later resignation. Possession of a Degree Mill diploma is not itself grounds for revocation 

of a security clearance. When I was employed by the FBI, no one came to me 

to rescind my clearance because I was purchasing various degrees. Thus, she 

became the ‘‘poster child’’ for government employees with Degree Mill paper, 

even though many, many, more federal employee have been exposed with the 

same type degrees (and some even used federal funds and their jobs had an 

education requirement), and they are still employed. I see no consistency in this 

application. 

• What has happened to: Charlie Abell, Deputy Under Secretary of Defense—Procurement and Readiness (Columbus University); Jimmy Shirl Parker, Chief Information Officer, Federal Technology Service, General Services Administration 

(California Coast University); Daniel P. Matthews, Chief Information Officer, 

Transportation Department (Kent College) and many, many others. 

As in the private sector, you lead by example, you must have one set of rules, 

consistently and evenly applied to everyone. From my point of view as an outsider, 

I do not see this happening in Washington, D.C. I do wonder why these other high 

ranking government officials are still in their positions, why their security clearances were not revoked, and them not shown the door within days of their degrees 

coming to light. If there is a double standard being applied, then this is unjust and 

our government can do better. This is not the example we want to set for the rest 

of the nation. 

The U.S. Senate (and GAO investigators) should finish what they started. The 

other 98% of the federal government should have degree audits also conducted by 

the GAO to determine the use of Degree Mill paper by federal employees and exactly how much the federal government has paid for these degrees. We all know 

they have not yet even scratched the surface. 

I attended both days of the Degree Mill hearings chaired by Senator Collins and 

Congressman Tom Davis. I applaud them for these hearings, the first since 1984. 

What was missing both days, was anyone from federal law enforcement. Not only 

were they not there as witnesses, nor appeared to be in the audience, but no Senator/Congressman/witness, even asked the question, Why did law enforcement let 

the problem get this big? and What are they going to do about it? There was not 

even talk of turning over the results of their investigation to the FBI, USPO, etc., 

nor of having a Federal Grand Jury impaneled to force those schools which refused 

to cooperate with the Committee to identify their federal employee ‘‘graduates’’. It 

was obvious to me this main piece of the puzzle was missing. 

Further, since these hearings, and the expose of all these federal employees, we 

outside of Washington, have neither seen nor heard of any action being taken by 

the Inspector General on all these federal employees. It makes one wonder if anything is really happening? 

Be alert, because we are watching, and we do care. 

Thank you for allowing me to appear today and I will answer any questions you 

may have. 

[Attachments to Mr. Ezell’s statement have been retained in the 

Committee’s official files.] 

Chairman MCKEON. Thank you very much. Ms. Morse? 

STATEMENT OF JEAN AVNET MORSE, EXECUTIVE DIRECTOR, 

MIDDLE STATES COMMISSION ON HIGHER EDUCATION, 

PHILADELPHIA, PA 

Ms. MORSE. Mr. Chairman, members of the Committee, thank 

you very much for the opportunity to testify about the role of regional accreditors in protecting the public against degree mills. 

15

I am the executive director of the Middle States Commission on 

Higher Education. I am here testifying on behalf of CRAC, which 

is the national organization of all regional accreditors. We accredit 

over 3,000 colleges and universities, everything ranging from community colleges through large research universities, and those colleges are attended by over 16 million students. 

There are other kinds of accreditors that are recognized by the 

U.S. Department of Education. Specialized accreditors, they look at 

programs like law or medicine. And national creditors tend to be 

specialized. 

The three points that I would like to cover from my written testimony are how difficult it would be for a degree mill to become regionally accredited, what we do to protect the public, and what 

more could be done. 

With respect to the quality of regional accreditation, we review 

every school individually. You need only ask our institutions, and 

they will tell you how very intrusive we can be. We have very high 

standards, and they include standards on things such as integrity 

and student learning. 

It is not easy to become accredited in the first place. It’s usually 

a 5-year process with multiple visits and reports. We have a very 

high drop-out rate of institutions that have invested years in the 

process, and finally decide that they are just not going to make it. 

Once you become accredited, it is not, contrary to popular belief, 

a matter of being looked at every 10 years. Whenever something 

comes up, we look into it immediately. Whenever there is what we 

call a substantive change—which includes, for example, new distance learning programs—we review those in advance. 

In Middle States, we have 50 percent rate of asking for followup when we take an accreditation action. That means more reports, 

more visits. And in addition to that, we have normal requirements 

that apply to everybody: annual reports; 5-year reports; 10-year reports. And we have a very large range of actions that we can take. 

We like to say that we are in the business of saving souls and not 

punishing sinners. 

We, ourselves, are very highly regulated by the Department of 

Education. At least every 5 years we are reviewed, we submit extensive documentation. We are reviewed by staff, we appear before 

a committee, and we must comply with very extensive regulations 

from the Department of Education that include not only our processes, but also—and our resources—but also the substance of what 

our standards must be. 

I would like to address the gray area that you referred to. 

There—I think that one of the things that regional accreditation 

can do very well is look at the institutions that really are providing 

open access to a part of our population which wants access to higher education. And that access tends to be offered through the innovative kinds of delivery methods such as distance learning, accelerated programs, continuing education. 

And because we can look at those institutions on a one-by-one 

basis over a period of several years with lots of experts—we have 

thousands of experts—we really are able to separate the wheat 

from the chaff. 

16

In terms of what we do to protect the public, we do a lot of disclosure of which institutions are accredited. It is true that there are 

some very fine institutions that are not accredited, so this doesn’t 

cover everything. But the ones that are accredited usually have 

been through a very complicated process. 

We have a website that posts not only the institutions that we 

accredit, but it links to other websites and it gives a lot of information. It shows information about the institution, its accreditation 

history, problems that it has had in the past, what has happened 

about those problems. 

We also respond to all complaints that we receive from students, 

faculty, anyone from the public. More could be done. There is a list 

of 6,000 accredited institutions that was prepared by ACE and submitted to the Department of Education. That could be broadly publicized. Those are the accredited institutions by all sorts of 

accreditors that are recognized by the Department of Education. 

It would be wonderful for regional accreditation if the state licensing requirements were strengthened. We do require that an institution must be operating legally, but that covers a wide range 

of states, some of whom have very low requirements of what it 

takes to operate legally. 

Existing laws on the books could be enforced, not only federally, 

but also state, local. And the new laws could be passed. Oregon has 

passed a law making the use of fake degrees illegal. 

There could be a list of degree mills. I would think that the people who are doing the finger pointing would want to have some sort 

of protection against being sued for libel by degree mills with deep 

pockets. 

And finally, the FTC has the ability to regulate the term ‘‘accredited.’’ Thank you again for the opportunity to testify. 

[The prepared statement of Ms. Morse follows:]

Statement of Jean Avnet Morse, Executive Director, Middle States Commission on Higher Education on behalf of the Council of Regional Accrediting Commissions (CRAC) 

Mr. Chairman and Members of the Committee, I appreciate the opportunity to be 

here today to discuss the role of regional institutional accreditation in protecting the 

public against ‘‘diploma mills.’’

THE ROLE OF REGIONAL AND OTHER ACCREDITORS 

I head the Middle States Commission on Higher Education of the Middle States 

Association. The Commission has a membership of approximately 500 colleges and 

universities located in Delaware, Maryland, New Jersey, New York, Pennsylvania, 

the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. 

I am testifying on behalf of the Council of Regional Accrediting Commissions, 

known as CRAC. It includes the seven U.S. regional accreditors that accredit over 

3,000 institutions enrolling over 16,000,000 students. Regional accrediting agencies 

have assured the quality of higher education in the United States for over 100 

years, providing self-regulation and shared assistance for improving education. For 

the past 50 years, these agencies have also served a unique role: when an agency 

is ‘‘recognized’’ by the U.S. Department of Education, the students of institutions accredited by that agency are eligible for federal grants and loans under Title IV of 

the Higher Education Act. 

There are other types of accreditors. Regional accreditors accredit entire institutions of all types, from community colleges through large research universities that 

are in their region. Specialized accreditors accredit specific programs, such as law 

or medicine. National accreditors usually accredit institutions of certain types. All 

three can be ‘‘recognized’’ by the U.S. Department of Education as Title IV ‘‘gatekeepers’’ and by the Council on Higher Education Accreditation, a private organizaVerDate 0ct 09 2002 19:10 Dec 05, 2004 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 H:\DOCS\95958 EDUWK PsN: NNIXON
17

tion. There are also accreditors that are not recognized, either because they do not 

apply or do not meet the applicable requirements. 

Regional accreditors are concerned about this issue and would support the efforts 

of the Congress, the U.S. Department of Education, state and federal enforcement 

agencies and others in addressing the problem. 

DIPLOMA MILLS: WHAT ARE THEY AND WHOM DO THEY AFFECT? 

Diploma mills are a growing problem. They affect students and employers in the 

U.S. and abroad. Setting up attractive websites is an easy lure. A 2002 study by 

the GAO documented that the federal government had hired applicants from degree 

mills and had paid for courses at degree mills for its employees. 

According to some estimates, there are over 300 unaccredited universities operating, selling degrees for thousands of dollars, awarding as many as 500 Ph.D.s 

every month, and earning in the aggregate $200,000,000 per year. [John Bear, ‘‘Diploma Mills’’ University Business, March 2000] 

Holders of fake degrees most frequently serve as teachers, police officers, counselors, medical administrators, expert witnesses and business managers. [Alan 

Contreras, testimony to Senate Committee on Governmental Affairs, May 2004] 

It is helpful to consider the different types of diploma mills, because they can be 

dealt with differently. The term has been applied to: 

- Diplomas granted with no work by the student 

- Diplomas granted without sufficient college-level course work that is normally 

required for a degree 

- Good quality diplomas granted by institutions that are not accredited by a legitimate accreditor, so that it is difficult for the public to determine their quality. They may or may not be diploma mills. 

- All on-line or other non-traditional degrees, regardless of whether they are 

granted by institutions accredited by legitimate accreditors, are sometimes labeled ‘‘diploma mills.’’ As discussed later, this is unfair to excellent institutions 

that deliver quality education through non-traditional means. 

REGIONAL ACCREDITORS HAVE ASSURED THE QUALITY OF ACCREDITED 

INSTITUTIONS OF ALL TYPES 

Regional accreditors can bring to the problem over 100 years’’ experience in defining quality education, applying standards by using qualified peer reviewers, and 

changing as higher education has changed. 

Regional accreditors have succeeded in assuring quality: 

- We are experienced in applying standards to distance education, accelerated 

learning, proprietary institutions, and other ‘‘non-traditional’’ types of higher 

education. This is important because a few ‘‘bad apple’’ distance learning and 

other non-traditional providers may create the impression that none are good. 

In fact, many of the most innovative, practical, accessible, and effective providers are non-traditional, and it is important to use a quality control system 

that recognizes them. For example, Middle States accredits an institution that 

offers distance education to our troops here and abroad. 

- I think it is fair to say that no diploma mills are accredited by one of the seven 

U.S. regional accreditors because of our high standards and careful processes. 

This is recognized by employers such as the federal government and others that 

require a degree from an accredited institution as a condition of employment. 

It is safe to say that diploma mills arise from that subset of institutions that 

are not accredited by a U.S. Department of Education-recognized accrediting 

agency, but it is not accurate to say that all unaccredited institutions are diploma mills. To identify which institutions are diploma mills, each unaccredited 

institution would need to be examined individually. 

HOW REGIONAL ACCREDITORS HAVE ADDRESSED DIPLOMA MILLS 

Some of the ways that regional accreditation helps to prevent diploma mills include: 

- Requiring all institutions to meet the high standards described later that would 

not be satisfied by a degree mill. This applies whether an institution is a community college or a large research university, whether its students are adults 

in continuing education programs or eighteen year-olds living on campus, and 

whether it delivers courses on-line or in accelerated format. 

- Granting initial accreditation only to institutions that have been reviewed and 

visited multiple times by staff, by peers such as professors and presidents, and 

by consultants. Eligibility requirements include a legal charter to operate and 

grant degrees; approval of profiles and academic qualifications of all full-time, 

part-time and adjunct instructional staff; and review of all educational programs. 

18

- Monitoring already accredited institutions regularly and following up on any 

problem areas. 

- Publicizing the list of which institutions are accredited by regional accreditors, 

including on-line listings that are linked to other sources. 

- Providing information to the general public about each accredited institution, including its history of accreditation actions. These actions may have required it 

to submit special reports or take other actions in specified areas such as finances or assessment of student learning. 

- Considering all complaints about accredited institutions received from students, 

faculty, or others. 

- Answering inquiries (which are frequent) about whether a specific institution is 

accredited, and by whom. 

- Writing articles and giving presentations. 

General ‘‘warning signs’’ of possible diploma mills have been published by the 

Council of Higher Education Accreditation. CHEA has also suggested general warning signs to identify the fake accreditors (‘‘accreditation mills’’) which allow an institution to say that it is accredited, even though its accreditor may not be reputable. 

STANDARDS THAT ACCREDITED INSTITUTIONS MUST MEET 

All regionally accredited institutions must prove that they meet all of an 

accreditor’s standards. These standards include: 

- integrity: this is a separate and very important accreditation standard; any violation can lead to disciplinary action 

- education for all students in oral and written communication, scientific and 

quantitative reasoning, critical analysis and reasoning, technological competency, and information literacy 

- assessment of the institution’s effectiveness and efficiency in light of its own 

mission 

- assessment of student learning 

- student support services 

- admissions policies with full disclosure and appropriate standards 

- a curriculum with appropriate levels and coordination 

- long term planning linked to budgeting 

- financial data showing capacity to continue operations at an appropriate level 

- resources for learning appropriate to that institution, such as information technology, library, and buildings 

- appropriate governance structure 

- qualified faculty and administrators, and 

- evidence of long term strategic planning linked to assessment and budgeting. 

CONTINUOUS MONITORING OF INSTITUTIONS 

These standards are applied at many times. Accreditation is not just periodic reporting for compliance. It is a continuous process that emphasizes the institution’s 

capacity and plans for growth and improvement. This allows each institution to develop its own areas of expertise with help from the expert academics who consult 

with the institution about its processes and plans. 

APPLICANT/CANDIDATE 

It is extremely difficult to become accredited. This is one reason why institutions 

that are finally accredited do not lose accreditation immediately—they are already 

excellent institutions. 

In order for a new institution to be accredited, it usually spends five years in preaccreditation status. During this time, it is visited by consultants, staff, and teams 

of professional educators. The Commission must vote first to allow the institution 

to become a candidate, and then to grant it accreditation. 

It is common for institutions to decide not to apply for accreditation once they understand the standards, or to withdraw from the process in order to avoid what they 

expect will be a negative decision. Even after it is accredited, the institution must 

submit its first full self-study within a shorter time period than accredited institutions. 

SUBSTANTIVE CHANGES 

The Commission reviews in advance certain ‘‘substantive changes’’ introduced by 

an institution, such as the introduction of a new degree level, offering new programs 

in distance learning, or opening branch campuses. Institutions are required to have 

prior approval before implementing these changes. Changes that are implemented 

but are not approved may endanger the accreditation of the entire institution. 

19

FOLLOW–UP REPORTING AND VISITS 

The accreditors monitor quality on an ongoing basis, using annual reports, news 

accounts, information provided by other accreditors or the U.S. Department of Education, complaints from students or other information to assure that an institution 

continues to meet accreditation standards. At any time, the Commission may impose 

on an institution requirements that it submit reports, have teams visit the institution, or even show cause why its accreditation should not be removed. 

In Middle States, approximately 50% of institutions reviewed are asked for some 

type of follow-up. This means that institutions with problems are continuously monitored until the problem is solved. 

ANNUAL REPORTING 

All accredited institutions submit information annually. Such information includes financial data, as well as information on enrollment, graduation rates, faculty, and other areas. 

FIVE YEAR COMPREHENSIVE REVIEW 

In Middle States, an extensive report is submitted every five years. It must cover 

deficiencies noted during the previous comprehensive team evaluation, student 

learning, planning, and other areas. It is reviewed by the Commission, and the 

Commission votes on whether to continue accreditation, with or without conditions. 

Other regional accreditors require a similar review at the midterm of the comprehensive accreditation cycle. 

COMPREHENSIVE REVIEW AND TEAM VISIT 

Every 10 years in the Middle States Commission’s region (commissions vary in 

the periodicity of their comprehensive review from six to 10 years), an accredited 

institution spends two years gathering together all of its constituents to review itself 

in light of the Commission’s accreditation standards, and to determine what it 

should do to grow and improve, in addition to simply complying or minimally meeting accreditation standards. This process of self-review is called ‘‘self study.’’

A team of peers such as professors and college presidents visits the campus to review the self-study, to comment on the institution’s plans, and to determine compliance with accreditation standards. 

DISCIPLINARY ACTIONS 

Institutions with serious problems may be placed on warning, probation, or ‘‘show 

cause.’’ Failure to cure the problems can result in removal of accreditation. Most 

commonly, problems are caught early and are corrected before this is necessary. 

FEDERAL REGULATION OF REGIONAL ACCREDITORS 

Under the Higher Education Act and regulations promulgated by the U.S. Department of Education to implement the Act, accrediting agencies must be recognized 

by the U.S. Secretary of Education of the Department after review by the National 

Advisory Committee on Institutional Quality and Integrity (NACIQI) in order to 

qualify as ‘‘gatekeepers’’ for funding under Title IV. Such recognition enables the 

students of institutions accredited by the gatekeeping accreditor to receive certain 

federal loans and grants. 

The Department reviews regional accreditors at least every five years. The 

accreditor submits a petition that is reviewed by an assigned member of the U.S. 

Department of Education. The accreditor has an opportunity to respond to the Department’s analysis, and also to present its case at a NACIQI hearing. The NACIQI 

recommendation to the Secretary is based on the agency’s petition, its interview, the 

staff analysis, and any third party comments and agency rebuttals. 

In order to be recognized, the regional accreditor must demonstrate compliance 

with federal regulations, a few of which are that the accreditor: 

- has standards that are widely accepted in the U.S. by educators, licensing bodies, employers, practitioners, and others 

- has accreditation as its principal purpose 

- has voluntary members 

- is not controlled by another body 

- has the administrative and fiscal capability to carry out its activities 

- uses qualified persons, including public members 

- has controls against conflicts of interest 

- maintains records 

- has standards for accreditation that address the areas described earlier, including ‘‘success with respect to student achievement’’

20

- has effective mechanisms to evaluate whether an institution complies with its 

standards, including requiring the institution to undergo the ‘‘self-study’’ process 

described earlier 

- conducts on-site reviews 

- demonstrates consistency in its decisions 

- reviews its standards periodically 

- maintains appropriate operating procedures 

- monitors substantive changes such as branch campuses, changes in ownership, 

and teach-out agreements 

- gives appropriate notification of its decisions, and 

- does not accredit institutions that lack legal authority or is in disciplinary proceedings by a state or another accreditor. 

POSSIBLE APPROACHES TO CONTROLLING DIPLOMA MILLS 

Past attempts to prevent diploma mills, additional suggestions made to the Senate Committee on Governmental Affairs in May 2004, and suggestions from C–RAC 

offer possible approaches: 

A national listing of all institutions that have been approved by an accrediting 

agency recognized by the U.S. Department of Education on a public website would 

provide a simple, straightforward way for the public to determine whether or not 

an institution has been the subject of a comprehensive outside review of its academic programs. Usually only serious legitimate institutions will go through the 

trouble of being accredited by an agency approved by the U.S. Secretary of Education. 

As noted earlier, each regional accreditor publishes on-line a list of all of the institutions that it accredits, together with information about the institution and its accreditation history. These sites are linked to each other, and through the Council 

of Higher Education Accreditation’s listings. The websites of the regional accreditors 

receive frequent ‘‘hits’’ on the directory listings. 

A national list of all of the 6,200 schools that are accredited by one of the approximately 40 regional, specialized, and national accrediting agencies that the Secretary 

recognizes was recently given by The American Council on Education to the Department of Education to enable federal agencies to identify legitimate colleges, universities and trade schools when federal employees seek to enroll in taxpayer funded 

education and training. 

Such a national list might have a much broader use if it were publicized widely 

and accessibly. It might link to the websites of regional accreditors for additional 

information on the accreditation history of the institution. Congress and the Department might look into ways to make such a list widely available. 

The FBI initiative of the 1980s by agent Allen Ezell in closing down several degree mills could be renewed. Evidence from the IRS and postal service was often 

useful. 

States can prosecute fraud and can pass special legislation. According to Alan 

Contreras, Oregon law requires users of fake or substandard degrees to cease using 

them. The law applies to any employment within the state, regardless of the location of the employer. Both the institution and students who knowingly use a fake 

degree may be liable. 

State licensing requirements could be raised and coordinated. They vary enormously, and states with more lax requirements are used by diploma mills to obtain 

their charters to grant diplomas. 

The FTC is authorized to regulate the use of the word ‘‘accredited.’’

Protection against litigation by diploma mills is needed. This is a serious problem 

for those who have identified specific institutions as diploma mills or have refused 

to accept their degrees as qualifications for employment, and have been forced to 

defend themselves in expensive litigation. 

Advertising boycotts by legitimate institutions against media that advertise degree mills has been suggested by John Bear. 

Mr. Contreras has suggested that the U.S. Department of Education establish 

standards for use of degrees as credentials for employment that require degrees to 

be from: a U.S. institution accredited by a federally recognized accreditor; a U.S. institution approved by USDE; or a foreign institution found by USDE to use similar 

standards. The Oregon standards address faculty qualifications, program length, 

content of curriculum, requirements for the award of credit, and admissions standards. Additional standards would apply to foreign providers. 

One suggestion discussed has been to require the U.S. Department of Education 

to maintain a list of diploma mills. 

There are also private websites that list degree mills, but these are voluntary and 

informal. 

21

The above suggestions would assist in determining the quality of alleged diploma 

mills. Thank you for the opportunity to discuss these issues. I would be happy to 

answer any questions you have. 

Chairman MCKEON. Thank you very much. Mr. Cramer? 

STATEMENT OF ROBERT CRAMER, MANAGING DIRECTOR, OFFICE OF SPECIAL INVESTIGATIONS, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC 

Mr. CRAMER. Mr. Chairman and members of the Subcommittee, 

I am pleased to be here today to discuss work that the office of special investigations at GAO has performed related to issues from—

related to degrees from diploma mills. 

For purposes of this overview, we define diploma mills as nontraditional, unaccredited post-secondary schools that offer degrees 

for a relatively low flat fee, promote the award of academic credits 

based on life experience, and do not require any classroom instruction. 

Over the past 3 years, OSI has purchased degrees from a diploma mill, through the Internet, created a diploma mill in the 

form of a fictitious foreign school, investigated whether the Federal 

Government has paid for degrees from diploma mills for Federal 

employees, and determined whether high-level Federal employees 

at certain agencies have degrees from diploma mills. My testimony 

will summarize this work. 

First, we purchased two degrees from a diploma mill through the 

Internet. After identifying ‘‘Degrees-R-Us’’ as a diploma mill, our 

investigator held numerous discussions with its owner. 

Posing as a prospective student, the investigator bought a bachelor of science degree in biology and a master of science degree in 

medical technology. The degrees were awarded by Lexington University, an institution purportedly located in Middletown, New 

York, that doesn’t exist. We paid Degrees-R-Us $1,515 for a premium package. The package included two degrees with honors, and 

a telephone verification service that could be used by potential employers verifying the award of the degrees. 

We also created a diploma mill. We created a fictitious graduatelevel foreign school purportedly located in London, England. We 

created a website and set up a telephone number and a post office 

box address for our school. We created a catalog, and on your right 

are a couple of pages from the catalog that we created. 

Using counterfeit documents, we obtained certification from the 

Department of Education for the school to participate in the Federal Student Financial Assistance Program. The Department of 

Education has since taken steps —it has reported to us to guard 

against the vulnerabilities that our investigation revealed. 

We also conducted an investigation to determine whether the 

Federal Government has paid for degrees from diploma mills for 

Federal employees. Initially purporting to be a prospective student 

who works for a Federal agency, our investigator placed calls to 

three schools that award academic credits based on life experience, 

and required no classroom instruction. 

22

These schools charge, again, a flat fee. For example, one school charges $2,295 for a bachelor’s, $2,395 for a master’s, and $2,595 

for a Ph.D. 

Representatives of the three schools emphasize that they are not 

in the business of providing individual courses or training, and do 

not permit students to enroll for individual courses. Instead, these 

schools market and require payment for degrees on a flat fee basis. 

However, the representatives of each of these schools told our investigator that they would structure their charges to facilitate payment for the degrees by the Federal Government. Each agreed to 

divide the degree fee by the required—the number of required 

courses, thereby creating a series of payments, as if a per course 

fee were being charged. 

All of the representatives we spoke to stated that students at 

their respective schools had received reimbursement or payment by 

the Federal Government. 

We requested that four such schools provide information on the 

number of students identified in their records as Federal employees, and we asked three Federal agencies to examine their records 

to determine if they had made payments to diploma mills. 

Only two schools gave us the records that we asked for. Those 

records, with the records we obtained from just two Federal agencies, showed total Federal payments of nearly $170,000 to two 

unaccredited schools by two Federal agencies. And a comparison of 

the data from the schools and the agencies indicates that that understates the amount of money that the Federal Government has 

paid. 

For example, one of the schools, Kennedy Western, reported total payments of $13,500 from the Energy Department for three students. Energy reported, however, total payments of $14,500 to Kennedy Western for three students, but for three different students. 

So, Energy made payments, we know, of at least $28,000 to Kennedy Western. 

I will quickly finish up. We looked into the question of whether 

senior level Federal employees have degrees from diploma mills. 

The answer is that some do. And we conducted interviews of some 

Federal employees who reported receiving degrees from 

unaccredited schools. These included three management level Department of Energy employees who have two-level security clearances, and emergency operations responsibilities at the National 

Nuclear Security Administration. 

In conclusion, diploma mills are easy to create, and the records 

we obtained from schools and the agencies likely understate both 

the extent to which the Federal Government has paid for degrees 

from diploma mills, and the true extent to which senior Federal 

level employees have diploma mill degrees. 

I will be happy to answer any questions that any of you may 

have. 

[The prepared statement of Mr. Cramer follows:]

Statement of Robert J. Cramer, Managing Director, Office of Special Investigations, U.S. Government Accountability Office, Washington, DCMr. 

Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss work performed by GAO’s Office of Special Investigations (OSI) related to degrees from ‘‘diploma mills.’’ For purposes of 

23

1 5 C.F.R. § 410.308(b). 

this overview, we defined ‘‘diploma mills’’ as nontraditional, unaccredited, postsecondary schools that offer degrees for a relatively low flat fee, promote the award 

of academic credits based on life experience, and do not require any classroom instruction. Over the past 3 years, OSI has purchased degrees from a diploma mill 

through the Internet, created a diploma mill in the form of a fictitious foreign 

school, investigated whether the federal government has paid for degrees from diploma mills for federal employees, and determined whether high-level federal employees at certain agencies have degrees from diploma mills. My testimony today 

summarizes our investigative findings. 

Purchasing Degrees from a Diploma Mill 

In response to a request from the Senate Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, OSI purchased two degrees from 

a diploma mill through the Internet. After identifying ‘‘Degrees–R–Us’’ as a diploma 

mill, our investigator held numerous discussions in an undercover capacity with its 

owner. Posing as a prospective student, the investigator first contacted Degrees–R–

Us to obtain information regarding the steps to follow in purchasing degrees. Following those instructions, we purchased a Bachelor of Science degree in Biology and 

a Master of Science degree in Medical Technology. The degrees were awarded by 

Lexington University, a nonexistent institution purportedly located in Middletown, 

New York. We provided Degrees–R–Us with references that were never contacted 

and paid a $1,515 fee for a ‘‘premium package.’’ The package included the two degrees with honors and a telephone verification service that could be used by potential employers verifying the award of the degrees. 

Creating a Diploma Mill 

OSI also created a diploma mill to test vulnerabilities in the Federal Family Education Loan Program (FFEL). We created Y Hica Institute for the Visual Arts, a fictitious graduate-level foreign school purportedly located in London, England. We 

first created a bogus consulting firm that posed as Y Hica’s U.S. representative and 

the principal point of contact with the Department of Education (Education). In addition, we created a Web site and set up a telephone number and a post office box 

address for Y Hica. Using counterfeit documents, we obtained certification from 

Education for the school to participate in the FFEL program. Education has since 

reported that it has taken steps to guard against the vulnerabilities that were revealed by our investigation. 

Investigating Whether the Federal Government Has Paid for Degrees from Diploma 

Mills 

The Homeland Security Act amended section 4107 of title 5, U.S. Code, by allowing federal reimbursement only for degrees from accredited institutions. Specifically, 

section 4107 states that an agency may ‘‘pay or reimburse the costs of academic degree training—if such training—is accredited and is provided by a college or university that is accredited by a nationally recognized body.’’ (Emphasis supplied.) For 

purposes of this provision, a ‘‘nationally recognized body’’ is a regional, national, or 

international accrediting organization recognized by Education.1 Because the law 

governs only academic degree training, it does not preclude an agency from paying 

for the costs of individual training courses offered by unaccredited institutions. Prior 

to the enactment of the Homeland Security Act, federal agencies were not authorized to pay for employee academic degree training unless the head of the agency 

determined that it was necessary to assist in recruitment or retention of employees 

in occupations in which the government had a shortage of qualified personnel. 

To investigate whether the federal government has paid for degrees from diploma 

mills, we requested that four such schools provide information concerning (1) the 

number of current and former students identified in their records as federal employees and (2) the payment of fees for such employees by the federal government. In 

addition, posing as a prospective student who was employed by a federal agency, 

our investigator contacted three diploma mills to obtain information on how he 

might have a federal agency pay for a degree. We also requested that eight federal 

agencies—the Departments of Education, Energy (DOE), Health and Human Services (HHS), Homeland Security (DHS), Transportation (DOT), and Veterans Affairs 

(VA); the Small Business Administration (SBA), and the Office of Personnel Management (OPM) provide us with a list of senior employees, level GS–15 (or equivalent) or higher, and the names of any postsecondary institutions from which such 

employees had reported receiving degrees. We compared the names of the schools 

on the lists provided by these agencies with those that are accredited by accrediting 

24

2 Our investigation was limited to direct federal payments to schools and did not include federal reimbursements of school fees to employees. 

bodies recognized by Education. We also requested that the agencies examine their 

financial records to determine if they had paid for degrees from unaccredited 

schools. 

Several factors make it extremely difficult, if not impossible, to determine the extent of unauthorized federal payments for degrees issued by diploma mills. First, 

the data we received from both schools and federal agencies understate the extent 

to which the federal government has made such payments. Additionally, the way 

some agencies maintain records of payments for employee education makes such information inaccessible. For example, HHS responded to our request for records of 

employee education payments by informing us that it could not produce them because it maintains a large volume of such records in five different accounting systems, has no way to differentiate academic degree training from other training, and 

does not know whether payments for training made through credit cards are captured in its training payment records. 

Moreover, diploma mills and other unaccredited schools modify their billing practices so students can obtain payments for degrees by the federal government. Purporting to be a prospective student, our investigator placed telephone calls to three 

schools that award academic credits based on life experience and require no classroom instruction: Barrington University (Mobile, Alabama); Lacrosse University 

(Bay St. Louis, Mississippi); and Pacific Western University (Los Angeles, California). These schools each charge a flat fee for a degree. For example, fees for degrees for domestic students at Pacific Western University are as follows: Bachelor 

of Science ($2,295); Master’s Degree in Business Administration ($2,395); and PhD 

($2,595). School representatives emphasized to our undercover investigator that 

they are not in the business of providing, and do not permit students to enroll for, 

individual courses or training. Instead, the schools market and require payment for 

degrees on a flat-fee basis. 

However, representatives of each school told our undercover investigator that they 

would structure their charges in order to facilitate payment by the federal government. Each agreed to divide the degree fee by the number of courses a student was 

required to take, thereby creating a series of payments as if a per course fee were 

charged. All of the school representatives stated that students at their respective 

schools had secured payment for their degrees by the federal government. 

Information we obtained from two unaccredited schools confirms that the federal 

government has paid for degrees at those schools. We asked four such schools that 

charge a flat fee for degrees to provide records of federal payments for student fees: 

California Coast University (Santa Ana, California); Hamilton University (Evanston, 

Wyoming); Pacific Western University (Los Angeles, California); and Kennedy–Western University (Thousand Oaks, California). 

Pacific Western University, California Coast University, and Kennedy–Western 

University provided data indicating that 463 of their students were federal employees. Pacific Western University reported that it could not locate any records indicating that federal payments were made, although this claim directly contradicts 

representations made to our undercover investigator by a school representative that 

federal agencies had paid for degrees obtained by Pacific Western University students. California Coast University and Kennedy–Western University provided 

records indicating that they had received $150,387.80 from federal agencies for 14 

California Coast University students and 50 Kennedy–Western University students. 

Hamilton University failed to respond to our request for information. 

After identifying from school records the federal agencies that made payments to 

California Coast and Kennedy–Western, we requested that DOE, HHS, and DOT 

provide records of their education-related payments to schools for employees during 

the last 5 years. As previously discussed, HHS advised us that it could not provide 

the data. DOE and DOT provided data that identified additional payments of 

$19,082.94 for expenses associated with Kennedy–Western, which Kennedy–Western 

had not previously identified for us. Thus, we found a total of $169,470.74 in federal 

payments to these two unaccredited schools. 

However, a comparison of the data received from the schools with the information 

provided by DOE and DOT shows that the schools and the agencies have likely understated federal payments. For example, Kennedy–Western reported total payments of $13,505 from DOE for three students, while DOE reported total payments 

of $14,532 to Kennedy–Western for three different students. Thus, DOE made payments of at least $28,037 to Kennedy–Western. Additionally, DOT reported payments of $4,550 to Kennedy–Western for one student, but Kennedy–Western did not 

report receiving any money from DOT for that student.2

25

Determining Whether High–Level Federal Employees Have Degrees from Diploma 

Mills 

On the basis of the information we obtained from eight agencies, we determined 

that some senior-level employees obtained degrees from diploma mills. Specifically, 

we requested that the agencies review the personnel folders of GS–15 (or equivalent) and above employees and provide us with the names of the postsecondary institutions from which such employees reported receiving academic degrees. The 

eight agencies were Education, DOE, HHS, DHS, DOT, VA, SBA, and OPM. The 

agencies informed us that their examination of personnel records revealed that 28 

employees listed degrees from unaccredited schools, and 1 employee received tuition 

reimbursement of $1,787.44 in connection with a degree from such a school. 

We interviewed several federal employees who had reported receiving degrees 

from unaccredited schools. These employees included three management-level DOE 

employees who have emergency operations responsibilities at the National Nuclear 

Security Administration and security clearances. We also found one employee in the 

Senior Executive Service at DOT and another at DHS who received degrees from 

unaccredited schools for negligible work. 

Moreover, we believe that the agencies are not able to accurately determine the 

number of their employees who have diploma mill degrees. The agencies’’ ability to 

identify degrees from unaccredited schools is limited by a number of factors. First, 

diploma mills frequently use names similar to those used by accredited schools, 

which often allows the diploma mills to be mistaken for accredited schools. For example, Hamilton University of Evanston, Wyoming, which is not accredited by an 

accrediting body recognized by Education, has a name similar to Hamilton College, 

a fully accredited school in Clinton, New York. Moreover, federal agencies told us 

that employee records may contain incomplete or misspelled school names without 

addresses. Thus, an employee’s records may reflect a bachelor’s degree from Hamilton, but the records do not indicate whether the degree is from Hamilton University, the unaccredited school, or Hamilton College, the accredited institution. Further, we learned that there are no uniform verification practices throughout the government whereby agencies can obtain information and conduct effective queries on 

schools and their accreditation status. Additionally, some agencies provided information about only the most recent degrees that employees reported receiving. 

Concluding Remarks 

Our investigations revealed the relative ease with which a diploma mill can be 

created and bogus degrees obtained. Furthermore, the records that we obtained 

from schools and agencies likely understate the extent to which the federal government has paid for degrees from diploma mills and other unaccredited schools. Many 

agencies have difficulty in providing reliable data because they do not have systems 

in place to properly verify academic degrees or to detect fees for degrees that are 

masked as fees for training courses. Additionally, the agency data we obtained likely 

do not reflect the true extent to which senior-level federal employees have diploma 

mill degrees. This is because the agencies do not sufficiently verify the degrees that 

employees claim to have or the schools that issued the degrees, which is necessary 

to avoid confusion caused by the similarity between the names of accredited schools 

and the names assumed by diploma mills. Finally, we found that there are no uniform verification practices throughout the government whereby agencies can obtain 

information and conduct effective queries on schools and their accreditation status. 

Mr. Chairman, this concludes my prepared statement. I would be happy to respond to any questions that you or Members of the Subcommittee may have. 

Chairman MCKEON. Well, I am certainly glad we are holding this 

hearing. I realized we had a problem, I didn’t realize the extent 

and the severity of the problem. 

Mr. Ezell, you said that you, in your time with the FBI, you investigated and prosecuted and put several people in jail. Do you 

think we have sufficient laws on the books now to handle this problem, or do you see other laws that should be passed? 

Mr. EZELL. Mr. Chairman, I think the laws that we have now 

will work fine if they are applied. We predominantly use, as you 

have said earlier, the fraud by wire, mail fraud, conspiracy, aiding 

abetting, money laundering, and on one instance, obstruction of 

26

justice. The laws are there, if somebody will take time to work it 

and do the job. It can be done with what’s out there now. 

Chairman MCKEON. This would be the diploma mills. 

Mr. EZELL. Yes, sir. 

Chairman MCKEON. Is there also law against Federal employees 

or other employees using these false degrees for employment? 

Mr. EZELL. Yes, and no. There is not a specific law. We did not 

have judicial venue in the western district of North Carolina 

against the Federal employees using our diploma mill paper all 

over the country. No. 1, we would have to look at the state law in 

that area where they were using it. 

No. 2, whether they violated title 18 section 1001, the false statement statute, we would have to look at each of the forms that they 

filled out when getting reimbursement for the degree. Each case 

stood on its own with the facts in that area. 

Chairman MCKEON. Now— 

Mr. EZELL. Now, every state has different laws, also, so you have 

to look at where, what, what are the laws right there. 

Chairman MCKEON. So it is not a Federal law, it is a state— 

Mr. EZELL. No, sir, it is not, unless you are talking about the 

false statement to any agency of the United States government, except for the 1001 statute. There is not a specific law, is what I am 

saying. 

Chairman MCKEON. But you indicated that the FBI is no longer 

working on these? 

Mr. EZELL. No, sir. And I will be candid, and it is in my written 

statement. The FBI office in Charlotte took some heat from what 

we were doing. 

We had an individual that came to us and said there is a college 

in South Carolina selling degrees and transcripts. We met with the 

assistant U.S. attorney, he saw harm to society, we instituted an 

investigation, and that led us from school to school to school for 

many years. We spent about $25,000 or so on various degrees. FBI 

headquarters did not look at that as an investigative priority, in 

their mind, nationally. But it was a priority where we were. 

The FBI wanted to do it, the U.S. attorneys office gave us all the 

support we needed. And at that time we had Judge Robert Potter 

as our chief district judge in the western district, better known as 

‘‘Maximum Bob’’ to the defense bar. A graduate of Duke. 

So, when the opportunity presented itself, and one of our crooks 

offered us any degree we wanted, we bought Duke, just to ring the 

bells when it went through the system. 

Chairman MCKEON. How can we set this as a priority? Do we 

have that ability in Congress? 

Mr. EZELL. Use the muscle that you have, request that the FBI 

dedicate one person to do nothing—one agent—to do nothing but 

education fraud. That will have quite an effect on this. 

At the same time, have the FTC do what they can on the civil 

side. Have the postal inspectors—these people need the mail, they 

need the interstate delivery services, so if you attack them from a 

mailing standpoint, getting the documents to you, from using the 

telephone standpoint and the computer fraud statutes at the same 

time you’re using the FTC, you’ve come at them like an octopus. 

27

Sooner or later—and at the same time, prosecuting the egregious 

use of these degrees if one buys it knowing that it is a fraud, uses 

it to obtain a job or to obtain a promotion in the Federal Government that has an educational requirement, or uses Federal funds 

to buy it with, and do all of that simultaneously, it can be stopped. 

This is a very big, lucrative business, and no one is doing anything about it. I mean, I got a spam while I am typing my testimony from today. I mean, I had responded to them a couple of days 

ago. That is the only way you will know what is being sold today, 

is to respond. These are extremely sophisticated people. 

I mean, we had a deep throat in the boiler room in Romania, and we—initially he wanted $20,000, we got it down to $1,000, and a 

bunch of us civilians chipped in $100. We sent him $1,000. He sent 

us all their boiler plates that they read, the list of all their schools, 

everything, which we gave Senator Collins staff later. I mean, if I am grossing $435 million and no one in law enforcement in the United States is doing anything about it, telling me 

to stop isn’t going to be enough. And I am an American running 

it from abroad. 

Chairman MCKEON. So the current laws that we have would 

apply in that instance, even though you are doing it from abroad? 

Mr. EZELL. They can be, with a little massaging, yes sir. 

Chairman MCKEON. Thank you very much. 

Mr. EZELL. Thank you, sir. 

Chairman MCKEON. Mr. Kildee? 

Mr. KILDEE. Thank you, Mr. Chairman. We talked about the 

question of need for new Federal laws or enforcement of the 

present law. How about greater penalties? There should be criminal penalties for awarding these phony degrees. How about increasing, or looking at the question of criminal penalties for receiving 

and using these degrees? 

In other words, both the buyer and the seller would be guilty of 

some type of chargeable crime. Could you— 

Mr. EZELL. I agree with what you are saying. When the FBI 

worked the case on LaSalle University in Metairie, Louisiana, 

there for the first time we saw them seize bank accounts. And they 

got somewhere between $85 million and $11 million out of 8 bank 

accounts of the school. So that was the first time we had seen the 

application of seizure of assets from the college. 

And of course, in the Pellar case, he agreed to pay a fine to give 

up his $1.5 million yacht that he had been sitting on there in Mexico as a Federal fugitive running this scam. 

If we apply the seizure aspects of the laws that are already on 

the books, that is one way to go after the pocketbook. I do not know 

if increasing the penalties on the existing statutes will do it. I don’t 

think it will, because they don’t really think they are going to get 

caught. 

I believe that the prosecution and publicizing the prosecution of 

the egregious use of diploma mill paper will also work. I don’t know 

if attaching monetary damages—for example, all the school teachers in the state of Georgia—there were about 11 of them that were 

exposed 2 months ago as having degrees from St. Regis University. 

Now, those 11 school teachers, number 1, have agreed to pay the 

$30,000-some back to the Georgia school system. They have all had 

28

their educational credentials retracted by the state, and resigned. 

Now the state is deciding, ‘‘Are we going to prosecute?’’ And there 

has been a good bit of publicity on that. That’s the thing that will 

get the message out, that you can’t use it, there is a penalty, you 

will lose your teaching certificate. 

And then you have to wonder how many graduates of that same 

school exist in the other 49 states. I don’t know that answer. But 

there have been laws that you all have passed up here in the last 

couple of years increasing the pressure on school teachers to become more certified, to obtain graduate-level degrees. And that 

may be sending them the easy route to diploma mills. 

Mr. KILDEE. As a matter of fact, the bill which the other Subcommittee—No Child Left Behind— 

Mr. EZELL. That is the one, yes sir. 

Mr. KILDEE. OK— 

Mr. EZELL. And that may be the impetus for them getting the 

graduate level degrees the easy way. 

Mr. KILDEE. Because we looked at the number of teachers who 

needed to increase their certification or the degrees, and this may 

have provided the incentive for some to seek out the— 

Mr. EZELL. Yes, sir. 

Mr. KILDEE. That is why, apparently, these teachers in Georgia 

only received, so far, some civil penalties. Do you think it would be 

prudent to have some Federal penalties for the—at least for the 

egregious abuse of this? Any of you on that. 

Because to my mind, the civil penalty kind of restores things to 

where they were, but it takes two to commit a crime in this type 

of thing, it seems to me. There has got to be the buyer and the seller. 

Ms. MORSE. Well, that is what the—did you say any of us? 

Mr. KILDEE. Yes. 

Ms. MORSE. That is what they tried to do in Oregon. And that 

law, as I understand from Mr. Ezell, is being contested. But the 

law was the use of the degree would also be prohibited, and also 

the use of the degree—any use of the degree in the state, even if 

the employer, for example, was outside the state. 

Mr. KILDEE. Well, you know, if someone buys the status of a 

Kentucky colonel, that is one thing. But he tries to get in someone’s 

army with the idea that he really is a colonel, then there is really 

the use of that degree, right, or the use of that title. 

And it seems to me that there should at least be the threat of 

some criminal penalties for using a fraudulent degree. 

Mr. EZELL. I agree. Like the state of Oregon, you can get arrested for using an educational credential on a school that is not 

approved by the Office of the Reauthorization to be used as such 

in the state of Oregon. I don’t know whether it is enforced, but it 

is on the books and you can get locked up for it. And it is that type 

of law that if every state had it, then that is the hammer that you 

could use. 

Mr. KILDEE. Thank you very much. 

Mr. EZELL. Thank you, sir. 

Mr. KILDEE. I see I have exhausted my time. Thank you, Mr. 

Chairman. 

Chairman MCKEON. Thank you. Mr. Ehlers? 

29

Mr. EHLERS. Thank you, Mr. Chairman, and I thank my colleagues to my right, who are letting me go ahead of—or out of 

order, because I have a 12 commitment. 

But I wanted to say this has become somewhat personal to me 

for two reasons. First of all, I worked 80 hours a week with no vacations for 4 years to get my Ph.D., and I kind of resent people getting a Ph.D. in 20 minutes for a much smaller sum than I paid. 

But what really made it personal, I received a phone call last 

Saturday by coincidence, from a sister-in-law who had received this 

e-mail which I will have distributed in a few moments. 

It says, ‘‘A genuine college degree in 2 weeks. Have you ever 

thought that the only thing stopping you from a great job and better pay was a few letters behind your name? Well, now you can get 

them. BA, BS, BSE, MA, MSE, MBA, Ph.D. Within 2 weeks, no 

studying required, 100 percent verifiable. These are real, genuine 

degrees that include bachelor’s, master’s, and doctorate degrees. 

They are verifiable, and student records and transcripts are also 

available. This little known secret has been kept quiet for years. 

The opportunity exists due to a legal loophole allowing some established colleges to award degrees at their discretion.’’ 

With all the attention that this news has been generating, I 

would not be surprised to see this loophole closed very soon. 

[Laughter.] 

Mr. EHLERS. ‘‘Order yours today. Just call the number below. 

You will thank me later.’’ We will hand these out now, and be sure 

to give them to members of the media, too. 

[The information referred to follows:]

------ Original Message -----

From: 11234201 <mailto:11234201@e-ol.de>

Sent: Saturday, September 18, 2004 11:46 AM 

Subject: A Genuine College Degree Within 2 Weeks! 100% Verifiable!

A Genuine College Degree 

in 2 weeks! 

Have you ever thought that the only thing stopping you from a great job and better 

pay was a few letters behind your name? Well now you can get them! 

BA BSc MA MSc MBA PhD 

Within 2 weeks! No study required! 100% Verifiable!

These are real, genuine degrees that include Bachelors, Masters, and Doctorate degrees. They are verifiable and student records and transcripts are also available.

This little known secret has been kept quiet for years. The opportunity exists due 

to a legal loophole allowing some established colleges to award degrees at their discretion.

With all of the attention that this news has been generating, I wouldn’t be surprised 

to see this loophole closed very soon. Order yours today. Just call the number below. 

You’ll thank me later. 

206–309–0904

That, to me, was incredible. I spent 22 years in higher education, 

and to see this going on is just deplorable. What especially disturbs 

me is your comments, Mr. Ezell, basically we are not—the FBI is 

30

no longer pursuing this crime. And I can understand they have a 

lot to do with anti-terrorism and organized crime, and so forth. But 

someone has to take care of this. 

I am not that keen on going after the victims of this, although 

they—the people who do buy the degrees, they obviously should be 

punished. But that doesn’t stop the operation. The only way you 

stop the operation is going to the source. 

That leads me to two questions. And we will start with Mr. Ezell 

on this, and go down. The Internet, it seems to me, has really aided 

them, has aided the people in propagating this information. The 

first question is do we need special legislation to strengthen the 

prohibition against the use of the Internet? 

Secondly, how do we stop foreign operations? Do we have enough 

agreements with foreign countries that we can, through our laws, 

stop the foreign operations? Because with the Internet, it doesn’t 

matter where you are, you can still run the scam. So I would appreciate comments on that. 

Mr. EZELL. Sir, I honestly do not know how you would stop the 

foreign operations. Two years ago I found a new Internet college 

that had the skyline of Jacksonville, Florida and Tampa, Florida on 

it, and they were using a mailbox address near Tampa. 

When I went to see where they were, they were in Hong Kong, 

China. So I do not know how you stop it. I don’t know what legislation, what agreements with other countries would work. I am not 

that computer literate. 

I do know that when the FTC came down with their temporary 

restraining order and their restraining order later against the university degree program folks, they were able to stop the host computers, the ISPs, that held the websites for those schools. So, what 

did they do? The bad guys set it up in Israel. I mean, they learned 

real quick where they were going with the U.S. law enforcement, 

and then moved shop. 

That is an excellent idea. I think that that would probably work. 

I don’t know what the mechanics would be. But I would love to see 

something that could stop that. 

Mr. EHLERS. All right. I do happen to be computer literate, and 

I think working through the ISPs would be the best way. Each 

time one of these is reported, simply getting the ISP to take them 

down, remove their e-mail privileges, their websites. 

And again, it is going to take diligent effort on the part of Federal personnel to accomplish that, because it is not going to happen 

just because we totally agree. Any other comments? 

Ms. MORSE. With respect to accredited institutions, we certainly 

require that their advertising be honest. And I have traveled 

abroad and seen advertising on cable TV and so forth that I felt 

was not fully disclosing for our institutions, and they stopped that 

immediately. So that is one of our accreditation requirements. 

With respect to foreign institutions, there are some which are accredited. But there is also an initiative to have a network, an international network of quality assurance agencies, so that they can 

publish who it is that they accredit, and you can at least click 

through to their websites and find out is this a reputable agency. 

Because there are also accreditation mills, and you can say you’re 

31

accredited and you’re accredited by an accreditor that is not really 

an accreditor. 

And finally, I would just raise the point that there is a gray area 

that—I think that we might plug one loophole and then have the 

problem that you are going to have institutions saying, ‘‘Well, take 

a course,’’ or, ‘‘We’re giving you credit for life experience,’’ and then 

you are going to really need an in-depth review of each institution. 

Is it really certifying actual knowledge, or is it simply saying that 

that is what it is doing? 

Mr. EHLERS. Mr. Cramer, do you have anything to add? 

Mr. CRAMER. I have nothing to add to the comments made by my 

colleagues. 

Mr. EHLERS. OK. Well, thank you very much. And thank you, 

again, to my colleagues for yielding to me. 

Chairman MCKEON. Thank you, Mr. Ehlers. Ms. McCarthy is 

recognized for 5 minutes. 

Ms. MCCARTHY. Thank you, and thank you for holding this hearing. I am just curious. There is no studying, there is nothing? No 

books are sent for the amount of money that you send in for the 

course? You know, when you sign up for one of these courses to get 

your degree. To anybody, there is no books sent? The consumer, 

then, is basically buying their degree? They are just getting a certificate without doing anything? 

Mr. EZELL. In 11 years, I have received books after my degrees 

from only one school. Some of the university degree programs, in 

your graduate kit—that is, your diploma, two certified transcripts, 

your letters of recommendation from professors you have never met 

or ever interacted with, along with a sheet dealing with how you 

can get your degree verified. 

They will then include about a 14-page exam, that if you care to 

take it now that you’re a graduate, there is a fee for them to grade 

it. So they are all strictly a smash and grab. Certain of these. 

Others that are watered down may run you through a couple of 

hoops, you may have to do some papers with some Internet course 

work so you have—it’s a scale, a continuum, from the totally fraud 

over here, where you do nothing and you know you did nothing—

I mean, this week, when I talked to this fellow from this university, it took him less than 40 seconds to qualify me for an MBA. 

That is strictly a fraud. 

But there are others where it is a gray area, where it may take 

a period of time, a couple of courses, some papers. I may not know 

that it is just a storefront, that they accredit themselves. So there 

is a range of this operation. 

Ms. MCCARTHY. All right, so that is how some consumers or 

some students would actually believe they are actually earning a 

degree? 

Mr. EZELL. Exactly. 

Ms. MCCARTHY. I have been trying to figure this out. 

Mr. EZELL. Exactly. And some of them even offer—up until three 

or 4 years ago, they were offering a free video. Others, you can take 

a virtual tour of the campus. You don’t know that it is all a fraud, 

because it’s 2,000 miles away. You have never driven to the address. You don’t know that it’s just a mail referral service. 

32

Ms. MCCARTHY. How are we going to—many of us here on this 

Committee, we have had hearings, and many of us agree that because of the technology that is out there, we believe in distant 

learning, which is, you know, something coming of the future. And 

how are we going to be able to pass laws that we’re going to try 

and do to clean this up and still not penalize the legitimate ones 

out there? 

Mr. EZELL. And I agree that distance learning is here to stay, 

with the advent of the Internet. If the Department of Education 

does, in fact, come out with this web-based list that they have 

talked about when they held their summit in January, then that 

would be an easy place for both our citizens and citizens abroad to 

go look for the school, if they knew this list was out there, and see 

is it on one of the approved—and I may be using the wrong word—

is it on one of the good lists put out by an agency of our government. 

But then they would have to know that that list was there in 

order to go look at it. Just like the state of Oregon, if you want to 

know if a school is bad, go look at Oregon right now. It’s the only 

state that actually posts a list of the schools you can get locked up 

for. No one is willing to go out on the plank and call a school bad. 

That’s one of the problems. They’re afraid of being sued. 

Ms. MCCARTHY. Thank you. Just to follow through—and again, 

I guess because so many of us are concentrating on the 9/11 Commission and Homeland Security—to be able to get these degrees I 

think is a little nerve-racking, when you think about possibly a terrorist that is sleeping in this country, getting one of these degrees 

to prove that they have been here for a while. 

Mr. EZELL. You brought up a good point. We have previously 

seen—20 years ago—diploma mills being used as a way of getting 

foreign students into the country, and that is also available today. 

So we should not—and especially with some of the mills that can 

be tracked back to some of the Middle Eastern countries, who is 

to say that they are not using this as a vehicle to get people over 

here. 

Plus, where did this American that set up his shop in Romania 

and Jerusalem, what has he done with the $435 million? Who has 

he sponsored in what area? And I don’t know the answer. But it 

is in the universe of possibilities. 

Ms. MCCARTHY. Thank you very much. 

Mr. CASTLE. Thank you, Ms. McCarthy. I will yield to myself for 

5 minutes. And I would just like to say a couple of things up front. 

I helped trigger this hearing. After reading about it, I do not 

know what concerned me the most. One of the things that concerned me was reading about something you mentioned, Mr. Ezell, 

was the degrees from Hamilton University. I have a degree from 

Hamilton College, thank you, for which I spent 4 years working 

pretty hard to get, and it bothers me to see that happening. 

But reading what happened over in the Senate, and then realizing there has not been a lot of follow-up, and realizing that I am 

not sure that we, as Members of Congress, understand the extent 

or breadth of this problem at all. And I hope this hearing wakes 

us up. And frankly, I hope—if this hearing is the end of it, then 

33

I will be vastly disappointed, because I think a lot of changes have 

to be made, and I think you have touched on a few of them. 

And quite frankly, I think we have to be more innovative than 

ever before, because we are dealing with the Internet, we are dealing with online legitimate schools at this point. There are a lot of 

changes that have gone into place. 

And obviously, as you all pointed out with the Internet, there is 

all kinds of machinations, and ways of turning this around to 

spread the illegality that goes on. 

Let me just also say that I don’t think there is any innocence in 

this. I will be very candid about that. I think anybody who receives 

something like Vern Ehlers’ daughter received here, and getting 

her college degree in 2 weeks, and just sending away for it, anybody—anybody—who would do that would absolutely know what 

they are doing. If they do that, and they are being—receiving remuneration at a much higher level because of that, to me they are 

implicated as much. 

And let me also just say that I am a total believer in what you 

have said, which is the fact that we need to enforce this. I have 

always believed that enforcement and publication is of tremendous 

value in cutting these things out. People start reading about it, be 

it a few students who are also brought into the picture here, as 

well as the names of the colleges or whatever, it’s going to change 

things dramatically. 

Although I must say that with all the rapid changes and use of 

the Internet, it may not change as dramatically as I would like to 

see it happen. But I think this is outrageous, what has happened, 

and I frankly think we need to do a heck of a lot about it in terms 

of what we’re doing in this country. And it does need to be addressed. 

And I know we can say, ‘‘Well, gee, we have to have all our FBI 

agents for terrorists,’’ or whatever. Well, that’s not completely true. 

As we all know, the FBI does a lot of other things, as well. And 

one—in this day and age it’s always more than one, probably—but 

whatever it would take to do it is something that should happen. 

So, my goal is, frankly, to find different ways of doing this and 

preventing it from happening, one way or another, particularly at 

the Federal Government level. That whole business of the 2 percent who were looked at and all the false degrees they had, to 

think what’s happening to the other 98 percent, I think, is completely outrageous and should be gotten to the bottom to as soon 

as possible. 

Let me start, though, on my questioning, now that I have gone 

through my tirade here, with Ms. Morse on the accreditation end 

of it. Because you mentioned the gray area—funny, I had written 

it down before anybody said it—but you have mentioned the gray 

area two or three times yourself, I think somebody else has mentioned it here. 

But I mean, not all schools which are legitimate schools as I understand it, are accredited. In fact, you have made it—and I know 

colleges are very concerned about accreditation, colleges and universities, and I know it is sometimes difficult. 

And you have indicated that—in fact, I wrote it down—but good 

schools sometimes stop in the process and don’t bother getting acVerDate 0ct 09 2002 19:10 Dec 05, 2004 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 H:\DOCS\95958 EDUWK PsN: NNIXON
34

credited. So we’re not talking about black and white here, we have 

got a gray area where there are some schools which are legitimate, 

degree-granting good schools which are not under either your accreditation or any of the other specialized accreditations which 

exist out there. 

So, if we get a list of all the accredited schools, all 6,000 by all 

the different entities that you mentioned, in addition to Middle 

States and those like it, if we get all those, we still may have a 

grouping of schools which are legitimately granting degrees and are 

not part of these diploma mills, and then we can’t get a whole list 

where we could just absolutely look at it and say, ‘‘These are legitimate schools, and these are not legitimate schools.’’ How do we 

overcome that problem? 

Ms. MORSE. Well, I said that in the interest of full disclosure. 

But those schools are not eligible for Federal funding. So there 

would be, as a practical matter, very few of them. 

There is another gray area which I think raises a really interesting philosophical practical problem, which is we are going, in 

higher education, to outcomes-based measures. We want to know 

what you have learned, as opposed to how many courses you took. 

And therefore, we have institutions such as the Western Governor’s University, which are simply certifying knowledge. And at 

what point do we get to an institution where we have to judge it, 

is this really a legitimate degree? Did they certify your knowledge 

properly? 

But the gray area that I was referring to was more the in-between case, where you are taking a couple of courses online, but 

it’s not really legitimate, and it’s really not that hard for an 

accreditor to tell that. We visit, we look at the—you know, we meet 

with students, we meet with faculty, we go online. 

One of the benefits of online, by the way, is that we get a lot of 

hits on our website of our listed institutions. So apparently, people 

from around the world do know that. 

Mr. CASTLE. Well, let me ask you a hypothetical. An this is hypothetical, and do not be afraid to answer it. And that is do you believe, with the knowledge that you have, that if you were assigned 

by whomever, the Department of Education, or yourselves, or whatever it may be, the responsibility of not just accrediting, but of determining those schools which are indeed falsely holding themselves out to be degree-granting institutions? 

Do you think you have the capability of doing that, setting aside 

all the legal objections, and all that kind of thing? 

Ms. MORSE. We certainly have the expertise. We don’t have the 

resources. 

Mr. CASTLE. Right. But you think you have the expertise, and 

you feel that, given the resources, that that is a doable objective? 

Ms. MORSE. If you spend 5 years visiting a school, getting reports 

from them, sending them consultants, you have a pretty good idea 

of whether they are legitimate, yes. 

Mr. CASTLE. My time is sort of up, but I am going to go on here 

for a little bit. And let me ask you, Mr. Cramer, why—I do not 

know what the Office of Special Investigations at GAO has done or 

not done here. I mean, I have read your testimony, I listened to 

35

what you said here today, but is there more that you could be 

doing? 

I mean, we obviously have a problem right here at the Federal 

Government level, you know, with people using diploma mill degrees to probably receive more—to maybe even get a job, and to receive higher income, and that kind of thing. Is there more that we 

should be doing? Should we be helping the GAO more? Is there 

more that should be happening there? 

My impression is that we have let a problem just go along, and 

we ought to be doing a heck of a lot more about it, is where I am 

coming from. 

Mr. CRAMER. Well, I think that the work we have done to date 

is really just the tip of the iceberg. It is a small snapshot of what 

is out there. 

As I mentioned before, records that we got from just two of these 

diploma mills and two agencies indicated $150,000 in payments to 

just those two schools by those agencies. So this is just a very small 

part of a much larger— 

Mr. CASTLE. So do you think, with greater resources, that you all 

could be doing more? And I have a lot of respect for what you and 

your group does. I mean, if we gave you greater resources, could 

you—to me, there is a whole world out there that we have not been 

into sufficiently. 

Mr. CRAMER. We would be happy to talk to you about doing additional work in this area. We are certainly open to that possibility, 

and we would be happy to talk about projects. We have some ideas 

for things that we could do, and we would be happy to talk to your 

staff about that. 

Mr. CASTLE. OK. Mr. Ezell—and this will be my final question—

the counterfeit—and you mentioned something else that I think 

was also in your written testimony—but you mentioned the counterfeit degrees from legitimate universities, which is very different. 

That is just a forgery, as I would understand it. 

And I guess it relates somewhat. Have you had a—much experience with that, in that area, when you were in the FBI or since 

then in the work you are doing now? 

Mr. EZELL. Yes, sir, I have. When I visited one place in Grants 

Pass, Oregon, I seized 32,000 diplomas on 320 universities. Once 

you design the printing plates, you print 100. You don’t print anything less. 

Today, on the Internet, you can buy just about anything you 

want on any school. I can buy a degree, a transcript, envelopes 

with the return address of the registrar’s office. I can buy rubber 

stamp seals. If their transcripts are on security paper, then that’s 

what the bad guys have. It’s all out there today. 

It should not be this easy. And if in today’s society so many employers don’t take the time to check out someone, and to verify 

their educational credentials—my daughters have graduated from 

the University of North Carolina and the University of Florida. I 

have bought counterfeit degrees on both of those schools for a lot 

less than what I sent them to college on. 

[Laughter.] 

36

Mr. EZELL. The signatures were wrong for the year of my graduation. But otherwise, it was a look alike. They are good, quality 

work. 

Mr. CASTLE. These are different people than the diploma mill 

people, or are they— 

Mr. EZELL. Yes, sir. 

Mr. CASTLE.—in some instances the same? 

Mr. EZELL. Yes, sir. It is a different operation, totally. And some 

of these have transcript verification, sort of like buying a triple 

combo at McDonald’s, you know. ‘‘I will take this, this, and this, 

and hold the honors,’’ you know. Whatever you want. Whatever 

GPA you want, it’s all available. 

I brought some items today, just as examples of some of the quality that is out there. Anything is for sale, sir. 

Mr. CASTLE. I said it would be my final question, but I can sort 

of imagine this, but how are they used? I mean, you can put them 

on the wall, but you can also present the transcript, and then show 

the whole record of it, and say, ‘‘I went to Harvard, and here is my 

record. I was tenth in my class,’’ or whatever it may be? 

Mr. EZELL. Yes, sir. And I have brought several Harvards with 

me today. Yes, sir. 

Mr. CASTLE. Very good. 

Mr. EZELL. Wherever my stack is. But there are some Harvards 

in it. 

Mr. CASTLE. I should have met you sooner. I could have saved 

7 years of my life. 

Mr. EZELL. You can be all you want to be, or be who you want 

to be. Think of identity fraud. Think of all of this that we are talking about today in line with identity fraud, or in line with terrorism. I mean, just look at it as your back-up documentation. 

Mr. KILDEE. Exactly. 

Mr. CASTLE. These are—I am going to distribute these amongst 

the members so they can look at them, but these are the diplomas— 

Mr. EZELL. Those are all counterfeits. And to answer a question 

that you did not ask me, the state of Oregon, on their website, even 

has non-accredited schools—they have come up with criteria where 

they have found some non-accredited schools legitimate to use as 

educational credentials in the state of Oregon. When we’re talking 

about accredited versus non-accredited. So they have come up with 

criteria and post certain non-accredited schools that you can use 

their credentials for education in Oregon. 

Mr. CASTLE. Thank you. Mr. Tierney is recognized for 5 minutes. 

Mr. TIERNEY. Thank you. Just a couple of questions, because I 

have to go. But Mr. Cramer, what do you know about any efforts 

on the Department of Education to take action to make sure that 

people aren’t using the Federal Family Education Loan Program 

for places like your institution where you apparently got them to 

send some money? 

Mr. CRAMER. Well, as a result of the investigation that we did, 

we know that they revamped their process of verifying foreign 

schools. 

Our—the school that we set up was—exploited a vulnerability 

with respect to the verification of foreign schools. 

37

Mr. TIERNEY. What, specifically, did they do? Do you know? 

Mr. CRAMER. Well, prior to our work, there was, in fact, no process in place for the Department of Education to actually check with 

the foreign government, or the foreign government educational authority to determine whether the school which sought to be a part 

of the student assistance program here was, in fact, licensed to operate and was fully accredited according to the foreign government 

standards. 

So, that is a significant piece of—that is a significant change that 

has occurred. They now do that. They make sure that they consult 

with the foreign authorities and determine whether or not it is a 

licensed school within that country. 

Mr. TIERNEY. What if one of the foreign countries contacted our 

Department of Education and asked about one of these mills that 

you’re talking about? What would the answer be, that they just 

don’t know because they don’t keep track of them all, or— 

Mr. CRAMER. See, the Department of Education here doesn’t do 

accreditation itself. 

Mr. TIERNEY. Right. 

Mr. CRAMER. It recognizes accrediting bodies, such as Middle 

States. 

Mr. TIERNEY. But I guess that is my point is, you know, if I were 

another government and I say, ‘‘Look, we want to know whether 

or not this institution, Lexington College,’’ for instance, or whatever it is, you know, is a legitimate school or whatever, ‘‘What can 

you tell me?’’ Our Department of Education would not be able to 

give them an answer, right? 

Mr. CRAMER. By the end of the year, the Department of Education has told us that they will have available online a list of accredited schools. 

The problem now is if you want to do a definitive search to determine whether a particular school is accredited, there is no one, convenient online place you can go to. You need to go to the various 

accrediting— 

Mr. TIERNEY. Right, but is there a difference between a legitimate school and accredited, or can you also—can you be a non-accredit school but be a legitimate institution? 

Mr. CRAMER. Yes, you can. 

Mr. TIERNEY. And would our Department be able to make that 

distinction for any foreign government inquiry? 

Mr. CRAMER. Well, I am not exactly sure how they are going to 

organize the information. But I know, for example, that OPM organizes its information about schools according to whether it is accredited, non-accredited but pending accreditation, whether it is 

another type of school, for example a foreign school which would 

not seek accreditation in the United States, but may be a perfectly 

fine school accredited in a foreign country. 

And then the fourth category, which are the diploma mill type 

businesses. I mean, I don’t call them schools or institutions. They 

are just businesses that are set up to sell degrees. 

So, there are all different kinds of businesses and schools and institutions out there, and— 

Mr. TIERNEY. And you think the Department of Education has a 

good bet on just which are which? 

38

Mr. CRAMER. I really cannot speak to that. I do not know. 

Mr. TIERNEY. With respect to the eight agencies, the Department 

of Education, Energy, Homeland Security, Health and Human 

Services, Transportation, Veterans, Small Business, and the Office 

of Personnel Management, where you found some 28 employees 

with degrees from unaccredited schools, has any disciplinary action 

been taken against those individuals, do you know? 

Mr. CRAMER. Well, I know that we referred the results of our 

work to the inspector generals’ offices at each of the agencies. At 

this point, I do not know what, if any, disciplinary action has been 

taken with respect to those people. 

Mr. TIERNEY. OK. I mean, some of them had some fairly significant positions, including national security clearances. 

Mr. CRAMER. Yes. 

Mr. TIERNEY. So it would be important to both those people who 

were duped, or if they—it gives us a question on their intelligence 

on that, or maybe not—but also whether they would just be devious 

themselves, in a position like that. 

What advise do you have for those eight agencies and others 

about what they must do to avoid that circumstance? 

Mr. CRAMER. Well, what we found was a surprising lack of systems to verify educational credentials. What the agencies need are 

systems to verify whether someone, in fact, has a degree, and to 

verify whether the degree is from a school or a diploma mill, or an 

institution. Is this a legitimate school? 

It is hard. It is not an easy thing. For example, you mentioned 

the example of Hamilton. Hamilton College is a fully accredited, 

fine school in Clinton, New York. Hamilton University is a diploma 

mill in Wyoming. 

But when—if an employee has obtained a degree from Hamilton, 

and they simply put on their application, or whatever they fill out, 

‘‘Hamilton,’’ without further identifying information, which happens, without an address or university or college, that’s just one example. And diploma mills frequently will take names that sound 

like legitimate schools. 

Another one is LaSalle. LaSalle is used by some perfectly fine 

schools, and also by diploma mills. So it also depends upon the employee’s own knowledge and culpability, and what kinds of information they are giving to the agencies. 

Mr. TIERNEY. Were you able to give any advise? I mean, who is 

giving these agencies advise on how to set up those systems, now? 

Is that your agency, or did you push off—somebody else has that 

responsibility now? 

Mr. CRAMER. We have not been asked to do that at this point. 

Certainly we would be happy to see whether GAO could assist the 

agencies, if they are interested. 

First of all, what Congress has done, I think, is very helpful in 

just making the agencies aware of the problem, aware of the need 

for attention to the problem, and the need to determine what the 

scope of the problem is. That is the start, and I think that you have 

gone a long way toward doing that here. 

And now, they need to design some kind of verification process, 

and they need assistance in doing so in a way that works, that 

doesn’t make the process unduly cumbersome. 

39

Mr. TIERNEY. Thank you. Mr. Chairman, thanks for bringing this 

issue to everybody’s attention. But perhaps the Committee wants 

to do something about notifying these agencies and offering the 

General Accountability Office’s services if they need that, or whatever. With that, I yield back. Thank you. 

Mr. CASTLE. Thank you, Mr. Tierney, very much, for your 

thoughts and time here. Mr. Petri is recognized for 5 minutes. 

Mr. PETRI. Thank you. I think I would like to just sort of follow 

up on the previous line of questions and ask you particularly, Mr. 

Cramer, does it really make sense, given all we have heard, to 

focus on the ‘‘diploma,’’ whether it is from an accredited or non-accredited, or—I mean, they are so easy to get and all of this. 

Doesn’t it make more sense to focus on what the diploma is supposed to represent, and have what you said, outcome-based—I 

mean, when—I happen to have a law degree from what is an accredited university. But they did not let me practice law. I had to 

take a bar exam. 

I fly on airplanes all the time, and I assume they take courses, 

but they do not get to fly the airplane just because they have taken 

the courses. They have to demonstrate, in a variety of ways, their 

competence. 

And so, we have problems of fraud all the time in our society. 

I mean, McDonald’s has to deal with it, and Wal-Mart, and so on, 

and they worry not just about arresting people, or checking out 

their credentials, but setting up systems that protect them and 

minimize the fraud. 

So, shouldn’t we, instead of giving people awards for a pay increase for a diploma and then running around trying to check on 

whether this piece of paper is valid or not, just do it based on demonstration of increased competence in a particular area? Wouldn’t 

that be a lot simpler, and more straightforward, and then we don’t 

have to worry about whether people are cheating or gaming the 

system? 

I am just asking. I mean, we can spend a lot of time and money 

putting more resources into checking into the validity of paper. 

Why don’t we just look at what the paper is supposed to represent, 

and determine whether people know that. Can you comment on 

that? Is that wrong? 

Mr. CRAMER. Not at all. I think it addresses one part of the problem. But there is still the other part, which is if, for example, a veteran’s hospital is going to hire a doctor, they have to know that 

this individual, in fact, has a degree, a medical degree, from a legitimate medical school. And the suggestion you made, I think, is 

a very fine one. But I don’t think it addresses that— 

Mr. PETRI. Well, wouldn’t he have to be certified and take an 

exam in order to practice in that state? 

Mr. CRAMER. Well, I guess the first question is to determine 

where the medical degree comes from, and whether the institution 

or the school or the business, whatever it is that grants a medical 

degree, has had a legitimate medical education program. 

So, we want to make it possible for agencies, private employers, 

anyone who has a need to know that— 

40

Mr. PETRI. But isn’t it true—I mean, I went to college—there—

even though it is certified, and it is a perfectly good school, there 

are a lot of courses—kids call them guts. 

You can get—I mean, there are a whole mixture of things, and 

it just doesn’t necessarily mean that—I mean, you don’t want to—

empowering people to do things because they have a piece of paper, 

rather than checking into what they actually know, it seems a lot 

simpler just to require that they demonstrate a level of competence 

for real activities. 

Or maybe it is better—if you want to empower, make certification of something important, make that another step. But that 

is kind of like you have to have a union card and then do something. I mean, if you want to do that in order to organize society, 

and restrict access, but in education a lot of states do that. But the 

private schools don’t, so you have people who teach in parochial 

school who aren’t certified, even though they both have gone to college. 

I mean, there are a lot of ways of doing this. But all I am asking 

is should we really be spending that much time on these systems, 

or wouldn’t it be a lot simpler to just worry about the basic competence, and if people don’t do that, they are liable, probably? If the 

people, their customers, are hurt by someone they placed in that 

position? 

And beyond that, I mean, there are only so many resources in 

this world. To spend all kinds of money looking into the integrity 

of various diploma mills, as opposed to whether people, whether 

they are from the diploma mill or not, know how to do the job—

that’s just my question. 

Ms. MORSE. May I address? 

Mr. PETRI. Go ahead. 

Ms. MORSE. That is why accreditation is trying so hard now to 

go in that direction. I do not know that we can have licensing tests 

for every kind of job that there is. But what we can do is to preserve the diversity of the different kinds of colleges that we have, 

and hold them to the learning goals that they have, in terms of the 

students that are graduating. 

And we are putting a great deal of resources and effort into that, 

as are all of the colleges and universities right now. 

Mr. EZELL. I agree with what you were saying. Some of the diploma mills, in fact, will caution you about buying a degree in an 

area that you have no knowledge. Because as you well know, you’re 

not going to last long. 

The other part of what you said, we are a credential-conscious society. We have left the age of apprenticeship, and I don’t know how 

you can go back to an apprenticeship style society. It’s the piece of 

paper that opens the door, it’s the piece of paper that gets you the 

interview, the raise, et cetera. And sometimes, we have met people 

in life that we said, ‘‘He is just so smart that he is stupid.’’ Well, 

it could be that he is just stupid. 

[Laughter.] 

Mr. EZELL. But he has the paper. You know what I am saying? 

Mr. CASTLE. Thank you, Mr. Petri. Mr. Burns is recognized for 

5 minutes. 

41

Mr. BURNS. Thank you, Mr. Chairman. You know, patience is a 

virtue. I am delighted to be here. I appreciate your input, I appreciate your knowledge on this subject. 

After spending 20 years in higher education and doing what my 

colleagues did, which was earn it the hard way, this creates a real 

problem. We have forgery, is that correct, Mr. Ezell, a forgery? 

Mr. EZELL. Oh, yes, sir. 

Mr. BURNS. Absolute, blatant forgery. And then we have fraud. 

You know, in Gwinnett County, Georgia, we had a few teachers 

who received degrees from St. Regis. And just to give you the 

input, they are master’s degree in 24 hours. A reporter from the 

Gwinnett Daily Post applied for a degree. In 24 hours, submitted 

a request online, took an optional test—optional test—sample question to be used to determine that the applicant can earn a course 

credit by taking St. Regis’ online test, ‘‘What two-syllable term 

means take into custody, or to apprehend?’’ 

And of course, optional answer A was ‘‘Arrest.’’ So, in 24 hours, 

the next day, the evaluation was completed and the qualifications 

for certification of degrees had been approved. You get a master’s 

degree in arts and education, a master of education, certificate in 

organizational management counseling, educational consultation, 

student guidance counselor, education administrative consultant, 

documents would be prepared for your approval, and upon acceptance of the payment of appropriate fees. 

The fee was $995. Now, for a teacher in the Georgia system with 

a master’s degree, that would qualify them for an annual salary increase of $2,500. That’s a pretty good investment. If I wanted a 

Ph.D. from St. Regis, it costs me $1,500. But my pay would increase $4,000. It’s blatant fraud. 

Mr. EZELL. Even worse, St. Regis is run by two Americans who—

and they probably have 15 to 20 entities. You can even become a 

broker and get money for referrals. After 9/11, they even set up 

their university of homeland security, where you can buy everything you want in the field of homeland security. I have that in the 

attachments to my written statement. 

So, they totally take advantage of the changing winds in the 

country. Quite a very sophisticated operation. 

Mr. BURNS. The frustrating thing that I have is the fact that 

they are operating with impunity. And we have, you know—it is 

hard to determine how someone could be considered a victim if 

they voluntarily participate in fraud. 

In Georgia, the authorities are looking at the opportunity of prosecuting those individuals for theft by deception, whereby someone 

who would deceive their employer to quality for higher pay. 

Mr. EZELL. Agreed. 

Mr. BURNS. Just a couple of quick questions. Is—Mr. Cramer, is 

our government paying for these degrees? 

Mr. CRAMER. Yes, the government has paid for a number of degrees for a number of people, according to the work that we have 

done, yes. 

Mr. BURNS. These are fraudulent universities, paper mills. And 

in some cases we are indeed paying for the degree? So if I wanted 

to get a degree from St. Regis, for example, and I could get my emVerDate 0ct 09 2002 19:10 Dec 05, 2004 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6602 H:\DOCS\95958 EDUWK PsN: NNIXON
42

ployer to reimburse me, they would pay for the degree. Is that a 

possibility? Is that happening? 

Mr. CRAMER. It did happen in the work that we did. We did find 

it happening, yes. 

Mr. BURNS. And certainly it is occurring where we have employees at both the Federal Government, and likely our state governments, who are using these degrees to gain additional remuneration for their work, as well as promotions and job opportunities. Is 

that, again, happening on a fairly routine basis? 

Mr. CRAMER. Our look at those Federal employees—we only 

looked at high-level Federal employees—but our look at those situations of those 28 people who were identified as having diploma 

mill degrees indicated that those people were hired not based upon 

the degree, but based upon their other qualifications and their experience. 

Mr. BURNS. Was their degree an entry level requirement? Was 

that a part of the requirement for the position? 

Mr. CRAMER. Not in all cases. Not in all cases. 

Mr. BURNS. But in some? 

Mr. CRAMER. In some cases, for example, they may have had a 

bachelor’s degree from a legitimate institution, but then what people tried to do at times, we found, is enhance their resume by acquiring a master’s or a Ph.D. in some cases, by simply paying a diploma mill for a degree. 

So, they may have had the minimum educational requirements 

for the job from a legitimate institution, but then enhanced their 

resume—which, of course, helps you when you’re looking for a job—

by getting these bogus degrees. 

Mr. BURNS. You know, it’s amazing. We get on an airplane, and 

the first thing we do is we thumb through the local—you know, the 

magazine there in the seat in front of us in the seat pouch, and 

we see multiple advertisements for various degrees from questionable, at best, universities. 

One of the things I am most concerned about is protecting legitimate universities, and not allowing them to become associated—

you know, like you suggested various names, LaSalle for example. 

A very fine university. If it’s the right LaSalle. Hamilton University, a very fine university if it’s the right Hamilton. 

And so, I think part of our challenge is protecting those who do 

a great job of helping many of us increase our expertise and knowledge and ability. So I appreciate your testimony, and I look forward 

to working with you as we continue through this process. Thank 

you, Mr. Chairman. 

Mr. CASTLE. Thank you, Mr. Burns. Hamilton College, by the 

way. It’s not that damn Hamilton University we are talking about. 

[Laughter.] 

Mr. EZELL. But it is designed to deceive and confuse people. 

Mr. CASTLE. I understand. Yes. 

Mr. EZELL. It has for years, and it hasn’t changed. 

Mr. CASTLE. I just wanted to ask two follow-up questions, and 

the others might, as well. I won’t take much time. But what are 

the legitimate universities? And maybe I address this to you, Ms. 

Morse. 

43

It seems to me that our legitimate colleges and universities—

frankly, I question how good a job they are doing in communicating 

with this Committee to begin with, on a variety of issues I have 

seen of late. 

But in this particular area, I would think they would be hot on 

the path of this. Maybe you do not run into this in the world of 

accreditation, or even the accreditors themselves, because I understand there are perhaps some imitation of accreditors out there, as 

well. But I would think all those who are legitimate would be a 

heck of a lot more concerned about this than they have been. 

I mean, I—you know, this is not something that has had a lot 

of public recognition. Are they not concerned, or is it just they do 

not have time to be concerned? Or they are concerned and I have 

not seen it, or is there some reason why they are not concerned? 

Ms. MORSE. They are concerned, but they do not have jurisdiction, except—I was wondering when you were talking about the 

similar names, if there isn’t some copyright lawsuit that they could 

bring. 

It is very hard for them to rule against these institutions. Now, 

someone made the comment before the hearing that ACRAO, which 

is the Association of College Registrars and Admissions Officers, 

that is also an organization that they might get together and do 

something about that. 

Accreditors are very concerned, that’s why we are concerned 

about the accreditation mills. And in fact, parallel to the Department of Education’s Secretary of Education recognizing certain 

accreditors, we also have a private organization that recognizes us. 

That’s the Council of Regional Accrediting Associations, or whatever it’s called, and they also have a website that publishes these 

things. 

Mr. CASTLE. It just seems to me that more publicity could be 

helpful in that area. Let me just go to one other— 

Mr. BURNS. If my friend would yield for just a moment, Mr. 

Chairman? 

Mr. CASTLE. Absolutely, Mr. Burns. 

Mr. BURNS. You know, I think that’s a good point. I think why 

don’t legitimate schools take more aggressive steps? And you know, 

in 20 years, I think one of the ironies of being in the university environment that I was in is we tended to ignore these things as a 

joke, as a laughable joke, and so we didn’t really look at them as 

a credible threat to education. 

But yet now, as you have pointed out, more and more people use 

them as an enhancement to their career without the associated 

requisite input and work and development. So I think often times—

Harvard, you know, I think forgery is going to—I think certainly 

Harvard would look at forgery and try to protect its position on forgery, but a Harvard is not going to look at a St. Regis and say, 

‘‘You’re a threat to me.’’ 

Ms. MORSE. We do have one area where we have jurisdiction, 

which is another potential area for abuse, which is that legitimate 

universities enter into contracts with providers, often abroad but 

sometimes here. And those providers may not be up to the standards of the university that is granting the degree. 

44

And we do have accreditation requirements about that, and we 

review those operations very carefully, because we don’t want to 

get a bad name for legitimate universities operating abroad. 

Mr. CASTLE. Thank you. Let me ask one other question, I think 

of Mr. Ezell, but maybe any of you could help with this. 

Are there either state—and I’m thinking about Oregon—or Federal statutes which prevent the recipient of one of—not prevent—

which would make it a crime for just the mere recipient, that is 

just the receiving of one of these degrees, as being a crime? 

Now, I understand if you pretend you’re a doctor and you’re not, 

that would be some sort of crime, I’m sure, or some other profession, or whatever it may be. But here you have a genuine college 

degree in 2 weeks, the thing that Mr. Ehlers had, and you know, 

there is nobody in their right mind that doesn’t understand this is 

a fraud. And you send away for it, and you get it, or you send away 

and you get that degree from Harvard on a forgery basis. 

I realize that the people issuing these things may be committing 

some sort of a crime, but is there any kind of a direct statute that 

makes this any kind of a crime in any state, maybe in terms of either the issuance or the receiving of such degrees? 

Mr. EZELL. Different than counterfeit currency, the sheer possession of the degree from the institution that you would buy it from, 

that spam mail, is not a crime, per se. 

Mr. CASTLE. OK. 

Mr. EZELL. It is the use of it. 

Mr. CASTLE. So it only— 

Mr. EZELL. However, if we are talking about a counterfeit degree 

on a state college, most states have a law, a state law, that says 

the production, possession, use of a degree of one of their state institutions or transcripts is a violation of state statutes. So no on 

the Federal, yes on the state. 

But it is the use of it, normally. Outside of a state degree, like 

the University of North Carolina, I would be violating a North 

Carolina general statute. Or the University of Florida. But there is 

not a Federal statute. And if I bought one from this spam mail and 

hung it up behind the bar of my home as a joke, if you would, I 

have not violated the law. But I am not a lawyer, but that is my 

opinion. 

Mr. CASTLE. Right. Well, I have no further questions. I do not 

know if Mr. Kildee or Mr. Burns has any further. I have, frankly, 

a whole lot of questions, but I would need the rest of the day if I 

kept asking them, and you have answered a lot of them in your 

written testimony, and we appreciate that. 

Mr. KILDEE. I just want to thank you, Governor Castle, for really 

initiating the idea for having this hearing. I have learned a lot 

today. I am shocked and somewhat discouraged, too. 

I worked hard for my MA at the University of Michigan. And the 

thought that people could fraudulently achieved that—I was very 

proud, and my parents were very proud when I got that—it is kind 

of discouraging, also, when you see this, really, violation of the 

rules of decency in society. 

But you, all three, have been very, very helpful. And I think we 

will have to try to see what we can do in the Federal level, maybe 

45

parallel some things that they have done in the state level, like in 

Oregon on that. 

But I would like to see a reinstatement of the DIPSCAM in the 

FBI. I mean, you have someone who is really zealous and recognizes this is fraudulent, and this is discouraging, I think that 

might at least limit the fraud here, both by the person granting—

the business granting this phony degree, and the person receiving 

it. 

Thank you very much. I really appreciate it. Thank you. 

Mr. CASTLE. Thank you. And I would also like to thank Mr. 

Burns, who has had a deeper involvement in higher education than 

almost any of us, except perhaps Mr. Ehlers, for his interest in 

this. 

I mean, you know, it is hard to get your arms around this, but 

there is absolutely no question in my mind that there are some 

very wrong things which are happening here, and who is actually 

carrying it out. I am not 100 percent certain. 

As you could tell from my questioning, I happen to believe that 

those who are receiving these are actually part of the problem, 

maybe a smaller part of the problem, but it involves a substantial 

amount of money, not just the money they’re making, but the fraud 

of, say the Federal Government, for example, and paying people 

pursuant to degrees which they have received which they have not 

properly earned, which we know now exists. Well, that’s just one 

type of business. There are probably all other kinds of businesses 

that are doing this, as well. 

So, I think it is a tremendous problem out there, and something 

we have to deal with. I think you have made some excellent recommendations. It is my hope that this hearing will plant the seed 

of interest in this Committee and in the Congress to go beyond 

where we have been before. 

I hope the FBI is listening to what we are saying. Perhaps we 

need follow-up hearings on that. The investigative arms of the congress, GAO, et cetera, and the others who may need the resources 

to do something about this, perhaps the schools themselves, the 

accreditors, could do more than perhaps the Department of Education can. 

Knowledge can shed a lot of light on this. And as I said before—

and I agree with Mr. Ezell on this—a little bit of law enforcement, 

a little bit of publicity on it, can go a long ways to shutting down 

some of this, as well. 

But I think it has been a good hearing today, and I very much 

would like to thank all of you for taking the time to be here, your 

interest in it. Hopefully you are going to hear more from us in the 

future. 

Unless anybody has anything further, we stand adjourned. 

Thank you. 

Ms. MORSE. Thank you. 

[Whereupon, at 12:35 p.m., the Subcommittee was adjourned.]

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