22 Million Dollar Class Action Lawsuit Puts a Small Dent In The Diploma Mill Industry

Robert Capwell

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diploma fraudA federal judge in the Eastern District of Michigan awarded a $22,783,500 civil class action lawsuit that involved more than 30,500 U.S. residents that were duped into purchasing fake high school diplomas from Belford High School.  Pakistani based Belford High School and Belford University sold thousands of fake high school and college diplomas to online education seekers.  The settlement also requires the defendant to turn over several domain names held by the company which include:  www.belfordhighschool.org, www.belfordhighschoo.com, www.belforduniversity.org, and www.belforduniversity.com.  Currently, these website are no longer active.  Although a substantial payout from this lawsuit, this is only a drop in the bucket to the billion dollar diploma mill industry.  Diploma mills offer high school or college degrees online to individuals for a nominal fee.  Many only require a simple online test to qualify or rely on past life experience as a qualification for hundreds of hours of course work.

The United States Remains the Leader in Diploma Mills

According to a report “Diploma Mills: New Trend in Credential Abuse” released from U.K. based Verifile Limited, the United States remains the world’s capital in housing known diploma mills.  According to the 2011 report, there has been a 20% increase in diploma mills from 810 to 1,000 and 40% of those firms operate in California, Hawaii, Washington, and Florida with the highest increase in the District of Columbia from 19 to 33 diploma mill since 2010.  This fraudulent practice continues to be a growing concern here in the United States with no current federal legislation to curb its growth.  Only states like AL, CA, HI, ID, IN, ME, MI, MS, MO, NV, NJ, ND, OR, SD, TX VA, WA, WY have passed legislation that includes civil and/or criminal penalties and fines to violators manufacturing such degrees, and certain states even include language of criminal prosecution of anyone knowingly using a fraudulent degree for employment or personal gain.

A Lesson for Employers

At the expense of U.S. Tax Payers and unsuspecting employers, fake diplomas are often used to obtain a higher pay grade upon application, or even used to obtain undeserved pay raises during their employment.  For many positions, additional education credentials can equate to more dollars.  Applicants/Employees can complete a quick application and pay a nominal fee to obtain a fake degree, and with little to no effort could receive a pay-raise worth thousands per year.  This horrific practice also creates potential risks to public safety and even national security.  Think about an unqualified engineer responsible for designing airplanes or at the controls of a nuclear plant; or the supposedly well educated executive you just hired to lead and grow your organization without the experience your background to perform the job.  The use of fraudulent degrees can hurt productivity, increase turn-over and even expose your corporate brand in a negative light to the public.  These scenarios could end in a complete catastrophe for your company.  In addition, this practice harms legitimate institutes of higher education. 

By incorporating a solid education verification program, employers can properly credential their candidates and verify the level of education that is required for certain positions.  Spotting employee dishonesty up front will help weed out bad hires before they are part of your workforce.  Employment Background Investigations, Inc. (EBI) works with employers globally to provide a full range of comprehensive and legally compliant employment background check, drug testing, occupational healthcare and electronic form I-9 solutions.  Our "Just One Solution" suite of services will help reduce the risks and liabilities of a bad hire!  

EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international mandatory requirements.  EBI is not providing legal advice or counsel and nothing provided on this document should be deemed as legal guidance or advice.  Readers should consult with their own legal counsel to determine their legal responsibilities or if they have questions on any information provided by EBI.

Background Checks

Robert Capwell

Posted By: Robert Capwell

EBI’s Chief Knowledge Officer, Mr. Robert E. Capwell, is considered one of the leading experts in the background screening industry with over 22 years of experience in the field. Mr. Capwell was a contributing author of the second edition of the ASIS Pre-employment Background Screening Guidelines and has written numerous articles and whitepapers for various publications including a periodic column on background screening for The Society for Human Resource Management (SHRM) Online. He has been quoted in The Wall Street Journal, Human Resource Executive Magazine, Entrepreneur Magazine, and several HR-related publications. Mr. Capwell speaks regularly to industry colleagues and HR Professionals both nationally and internationally.

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