Islamabad (HRNW): In the year since Pakistani investigators raided Axact, a Karachi-based software company accused of raking in hundreds of millions of dollars with a vast Internet degree scam, Pakistani and American investigators have been busy dismantling its operations.
Fourteen Axact employees, including the chief executive, await trial on charges of fraud, extortion and money laundering. Bank accounts in Pakistan and the United States have been frozen. Investigators have uncovered a tangled web of corporate entities — dozens of shell companies and associates, from Caribbean tax havens to others in Delaware, Dubai and Singapore — used to funnel illicit earnings back to Pakistan.
New details suggest that Axact’s fraud empire, already considered one of the biggest Internet scams on record, is bigger than initially imagined. Over the past decade, Axact took money from at least 215,000 people in 197 countries — one-third of them from the United States. Sales agents wielded threats and false promises and impersonated government officials, earning the company at least $89 million in its final year of operation.
Those findings stem from financial and customer records, company registrations, sworn testimony, communications between Pakistani and American officials, and hundreds of hours of taped phone conversations filed in court. The records have been made available to The New York Times in the months since a Times article detailing the company’s scheme prompted police raids and the collapse not just of Axact, but also of the company’s new national news channel, Bol.
The case against Axact, which at first seemed a rare instance in which tycoons with powerful connections were being held to criminal account, has increasingly appeared in recent months to be in jeopardy.
The leading prosecutor quit with little explanation, hinting that he had come under political pressure to soft-pedal the case. A trial date for the company’s executives has not been set, and several judges have dropped out of the case. Some media analysts, noting that Axact’s jailed chief executive, Shoaib Ahmed Shaikh, has publicly boasted of his work for the Pakistani military, speculate that his powerful connections may yet work in his favor.
“There’s been a huge amount of speculation and analysis and deep-throated conspiracy theories,” said Hasan Zaidi, a filmmaker and media analyst based in Karachi.