Justice Department pursues diploma mills with fraud charges

Federal law does not specifically outlaw diploma mills, but institutions that issue fake educational certificates can be charged with violating fraud or conspiracy laws, the Justice Department said in a letter sent to senior lawmakers early this month.

In a March 2 letter, Assistant U.S. Attorney General William Moschella told Sens. Susan Collins, R-Maine, and Joseph Lieberman, D-Conn., of cases involving two diploma mills that had been successfully prosecuted for violating fraud and conspiracy statutes.

On January 12, 2004, Ronald Pellar pled guilty to nine counts of fraud for operating Columbia State University, a nonexistent correspondence school. In a "CSU" catalog, the school was said to be located in Metairie, La., but mail was actually forwarded to Pellar in California. The operation took in "millions of dollars in tuition fees" while Pellar dispensed bachelor's, master's and doctoral degrees for as little as one month's worth of correspondence work, according to Moschella.

Pellar is scheduled to be sentenced on April 17, and he is likely to face about five years in federal prison and $2 million in restitution.

Moschella also described a diploma mill that was actually located in Louisiana, called LaSalle University. The organization was run by the "World Christian Church" and was not associated with La Salle University in Pennsylvania.

The World Christian Church actually built a campus and had an enrollment of several thousand students around the world, but the correspondence "coursework" was graded by secretaries, and the school falsely claimed that it was accredited. Thomas Kirk, the president of the World Christian Church, pled guilty to conspiracy in the late 1990s and was sentenced to five years in prison.

The issue of fraudulent diplomas in the federal workforce came up last year when Homeland Security Department officials placed Laura Callahan, a senior technology official, on administrative leave and launched an investigation into her educational credentials. DHS officials told Government Executive Thursday that they are not prepared to release an update on Callahan's status.

Some officials are concerned that fake credentials are allowing unqualified employees to enter the civil service or advance rapidly through it. Several senior lawmakers have pushed for a probe of the federal government and the General Accounting Office is due to release a report on diploma mills this month.

Collins, the chairwoman of the Governmental Reform Committee, has asked the Education Department to create a list of accredited schools to combat the diploma mill situation. Education Secretary Rodney Paige said last month that his department is developing such a list.

Moschella told Collins and Lieberman that the Justice Department is taking the diploma mill situation seriously.

"Such criminal conduct can substantially undermine public confidence in our educational system and the qualifications of employees in private enterprise and government alike," Moschella wrote. He told the senators, however, that federal prosecutors typically use mail fraud, wire fraud, money laundering or conspiracy laws to charge diploma mill suspects.

"There are no federal criminal statues expressly concerning diploma mills," Moschella said.

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