Mail Fraud—Diploma Mills

Eight people have been indicted on charges of conspiring to commit mail fraud and wire fraud related to a massive diploma mill “that could have helped foreigners illegally enter the United States.”^[1] The eight people, two of whom were also charged with conspiracy to commit money laundering, are accused of selling thousands of fraudulent high school and college diplomas, nearly half of which were sold overseas, often to students in Saudi Arabia.^[2] Foreigners who purchased the fake diplomas could be eligible for “H1-B” visas by virtue of their “educational background.”^[3]

Customers paid between US$399 and $2454 to access a special website to be evaluated for a degree, in one instance taking a 125-question test that required only a 25% correct rate to be awarded a high school diploma.^[4] After successfully completing the test, the degrees and related documents were printed and shipped to the customer.^[5]

Conspiracy to Commit Mail Fraud and Wire Fraud
Under 18 U.S.C. § 1349, any person who conspires to commit either mail fraud or wire fraud will be punished as if he had actually committed the offense.

Mail Fraud
18 U.S.C. § 1341 makes it a crime for a person to devise a scheme or artifice to defraud, or to sell any counterfeit article for the purpose of executing the fraud, and use the US mails to carry out that scheme.

The punishment for a violation of section 1341 is a fine, imprisonment for up to 20 years, or both. If a financial institution is harmed in the scheme, the punishment can be a fine of not more than US$1,000,000, imprisonment for up to 30 years, or both.

Wire Fraud
Under 18 U.S.C. § 1343, it is a crime for a person to devise a scheme or artifice to defraud and to use the wires, radio, or television to carry out the fraud.

The punishment for a violation of section 1343 is a fine, imprisonment for up to 20 years, or both. If a financial institution is harmed, the person can be fined as much as US$1,000,000, imprisoned for up to 30 years, or both.

Conspiracy to Commit Money Laundering
Under 18 U.S.C. § 1956(h), any person who conspires to commit a money laundering offense can be punished as if he had actually committed the offense.

Under 18 U.S.C. § 1956(a)(1)(A)(i), it is a crime for a person conduct financial transactions which involve the proceeds of a specified unlawful activity with the intent to promote the “carrying on” of that unlawful activity. Both mail fraud and wire fraud are “specified unlawful activities.”^[6]

The punishment for a violation of section 1956 is a fine, imprisonment for up to 20 years, or both.^[7]

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[1] Nicholas K. Geranios, Grand Jury Returns Indictments in Diploma Mill Case, Associated Press, Oct. 10, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] 18 U.S.C. § 1956(c)(7)(A) (incorporating the terms of 18 U.S.C. § 1961(1)).
[7] Id. § 1956(a)(1).