A judicial magistrate on Wednesday remanded the entire management of Axact, including its CEO Shoaib Ahmed Shaikh, to a seven-day police custody as the Federal Investigation Agency (FIA) found the business conglomerate involved in an online education fraud and money laundering recently reported by the New York Times. The FIA arrested and presented in the civil court of Judge Noor Muhammad Kalmati Wednesday the Axact's Shoaib Shaikh, Zeeshan Anwar, Viqas Atique, Zeeshan Ahmed and Muhammad Sabir.
-- CEO, others remanded to police custody
Charges framed against the high-profile accused include offering/preparing/selling/issuing fake and bogus diplomas, degrees, certificates and accreditation certificates of hundreds of fictitious schools, universities and colleges through fraudulent online system and illegally minting millions of dollars. As was pinpointed by defence counsel Naeem Qureshi in the absence of a private claimant against the accused, FIA's assistant director Saeed Ahmed Memon lodged an FIR against the Axact management on behalf of the state in the wee hours of Wednesday.
Also named in the FIR is M/s Axact FZ LLC of the United Arab Emirates where, the investigators claim, the company would stash in its bank accounts of "millions of dollars" it had minted from students. "Thereafter, the funds were further brought into Pakistan in bank accounts of M/s Axact (Pvt) Ltd... under the guise of software exports," the FIR reads. In Pakistan, the company had been maintaining accounts in Standard Chartered Bank (Pakistan), Habib Bank, Askari Bank, United Bank Limited and Allied Bank Limited.
To disguise "illegal origin of their funds", the accused director and management of Axact used to submit fake/forged bogus monthly software export statements to the State Bank of Pakistan. As the FIR reads, an FIA team recovered hundreds of thousands of blank degrees and certificates of hundreds of foreign fictitious education institutions and accreditation organisations from the cabinets and racks of Axact's administrative process management department in an raid Wednesday at 1am.
Also, the FIA raiding team claimed to have recovered from the premises of the software company embossing machines, envelops and other incriminating materials and articles that "constitute the commission of offences". The recoveries were made on the pointation of CEO Axact Shaikh. The CEO and management of Axact, which claims to be launching soon the country's largest media group titling BOL, would be tried under multiple sections of the Electronic Transaction Ordinance 2002 and the Anti-Money Laundering Act 2010.
While the FIR displays the names of at least 44 foreign schools and universities and nine accreditation bodies, the investigators from FIA sought a 14-day remand of the accused to further investigate and discover international connections of the accused. The Agency also tends to dig out more about the money laundering transactions made by the company and pinpointed by the arrested accused. The court, however, granted the investigators a seven-day remand ordering that the accused be reproduced on June 4. During the course of enquiry, the FIA found that Shaikh initially had established a company in the UAE: M/s Axact FZ LLC. Thereafter, he incorporated his firm with the Securities and Exchange Commission of Pakistan (SECP) as M/s Axact (Pvt) Ltd wherein one share each was held by Shaikh and his director wife Ayesha Shoaib Shaikh while M/s Axact FZ LLC, the UAE possesses as many as 599,998 stakes.
"Accused Shoaib Ahmed Shaikh... and his management team... are indulged in preparing/offering/selling/issuing fake/forged/bogus degrees/diplomas/ certificates/accreditations of hundreds of fictitious universities/ schools/colleges purportedly based at different countries including USA and Middle Eastern countries through fraudulent online education system to foreign students," reads the FIR. Besides, the accused also have established fictitious accreditation bodies and used to fraudulently prepare accreditation certificates of fictitious universities, schools and colleges to portray that the same were genuine. The defence counsel, Naeem Qureshi, told the court that the offences were the "occurrence" had taken place during 2006 to 2015. "There is no private complainant nor any victim appeared before the FIA authorities against the accused persons," he pleaded.
The lawyer argued that the recovery had already been effected from the accused persons and further police custody (PC) remand would not serve any fruitful purpose. "All the offices of the Axact company have been seized by the raiding magistrate," he added.
The counsel prayed to the court that the accused be remanded to judicial custody and the Investigation Officer (IO) be directed to submit the report under section 173 Cr.P.C. Qureshi also argued that the accused had been arrested after FIA's enquiry. Therefore, further PC remand would stand as an abuse of the legal process.
The judge, however, remarked that the accused were nominated in the FIR. "The investigation of the case is yet not been completed and the recoveries are yet to be effected," he observed. Terming the case as a case of "serious nature", the judge said the accused had not been able to justify the existence of fake degrees and certificates recovered from their possession. "Which shows that the matter requires investigation, therefore, accused persons are remanded to police custody," he said. The judge also asked the IO for a progress report and investigation dairies to be presented in the next hearing. The court ordered the IO to provide the same as Shaikh and Viqas claimed medical treatment during the hearing.
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