March 27, 2008 in City

Woman behind diploma mill scheme pleads guilty to federal charges

Staff writer
 

Dixie Ellen Randock, a high-school dropout who masterminded a Spokane-based Internet scheme to sell bogus high school and university degrees around the world, pleaded guilty Wednesday to conspiracy to commit wire and mail fraud.

The 58-year-old Colbert woman, who sold real estate before launching her massive diploma mill operation in the late 1990s, faces three years in prison when she is sentenced July 2 in U.S. District Court.

She started her string of online universities “because she saw it as a good way to make money,” according to the plea agreement she signed.

Her husband, Steven K. Randock Sr., 67, and daughter, Heidi Kae Lorhan, 39, also pleaded guilty Wednesday to conspiracy to commit wire and mail fraud. Under terms of separate plea agreements, Steven Randock faces three years in prison and Lorhan faces 12 to 18 months.

As part of plea bargains, the U.S. attorney’s office agreed to seek dismissal of money laundering charges against the Randocks, which carried longer potential prison terms. They agreed to forfeit more than $535,000 in cash seized in 2005 by a special task force, as well as their late-model Jaguar.

The fourth remaining defendant, Roberta Lynn Markishtum, was negotiating a similar plea agreement with the U.S. attorney’s office and may enter a guilty plea today, Judge Lonny Suko was told at Wednesday’s hearing.

The case is believed to be the first successful prosecution by the U.S. Department of Justice of diploma-mill operators, using wire and mail fraud statutes.

“In terms of complexity and numbers of documents, I’d say it ranks up there, if not the biggest, then one of the biggest (cases) that’s come across my desk,” said Jim McDevitt, who has been the U.S. attorney for Eastern Washington for seven years.

New court documents disclose that the conspirators used an airline magazine advertisement to sell at least one “doctor of medicine” degree from their fictional Saint Regis University to a buyer in North Carolina who paid the Randocks $1,531.

A man from Wisconsin bought a nuclear science degree from Robertstown University, another one of the 125 bogus online schools created by the Randocks, the documents say.

There are at least 8,200 purchasers whose names haven’t been released by the U.S. government. McDevitt said Wednesday he’s committed to the eventual release of the names of buyers who used their degrees in many instances to get jobs and promotions or, in the case of foreign nationals, to enhance their chances of immigrating to the United States.

At least 300 buyers worked for the U.S. government, including positions in the Justice Department, the State Department, various military branches and even the White House, it has been disclosed in previous court hearings.

The only publicly announced criminal prosecution of a purchaser involves a former deputy U.S. marshal supervisor who worked in Spokane and bought a degree from Saint Regis. He pleaded guilty to lying on a promotion application and awaits sentencing.

The case was prosecuted by Assistant U.S. Attorney George J.C. Jacobs, who headed the multi-agency task force dubbed “Operation Gold Seal” that has investigated the diploma mill operation for more than three years. Because of pending court hearings, Jacobs said he couldn’t comment.

The federal task force was created in early 2005, following a November 2003 news story in The Spokesman-Review about the diploma mill operation being run by the Randocks out of an office building in Mead and a house in Hillyard.

After that notoriety, the Randocks moved their operation to a rented basement office in a Post Falls office building, registering their businesses with the state of Idaho as “When Pigs Fly Inc.” and “Kaching, Kaching Inc.”

Federal interest in the operation ramped up when investigators discovered purchasers included potential terrorists living in the Middle East, who could legally gain entry into the United States with their bogus college degrees.

Four other defendants – Blake Alan Carlson, Richard John Novak, Kenneth Wade Pearson and Amy Leann Hensley – previously pleaded guilty to participating in the conspiracy and agreed to be prosecution witnesses against the Randocks. Pearson, who worked as webmaster for the Randocks, also pleaded guilty to receipt of 10,000 child pornography images. They all await sentencing.

In her plea agreement, Dixie Randock confessed to making up names of prep schools and universities, creating online Web sites for them and selling fraudulent degrees and transcripts.

She also admitted manufacturing counterfeit degrees, class transcripts and other academic products, using the names of legitimate U.S. universities, including the University of Tennessee, Texas A&M, the University of Maryland and George Washington University.

Defense attorney Phillip “Dutch” Wetzel said he will ask that Dixie Randock be allowed to serve her sentence under “home confinement,” but Jacobs, the assistant U.S. attorney, said he will ask for straight prison time, followed by three years of probation.

Steven Randock’s attorney, Peter Schweda, said he expects to ask for little or no prison time because the 67-year-old defendant has heart problems.

The diploma mill operation raked in an estimated $6.3 million in six years, using the Internet to sell more than 8,200 phony college degrees and accompanying transcripts around the world, court documents say.

The online schools claimed accreditation from the National Board of Education in Liberia. As part of the case, the Secret Service learned Abdullah Dunbar, the deputy chief of the Liberian Embassy, was demanding cash bribes from the Randocks in exchange for lining up “accreditation” for Saint Regis University and other diploma mills and for handing out monthly payments of $50 to $100 to Liberian educators posing as faculty members.

The task force was headed by agents with the Secret Service, with assistance from the Federal Protective Service, the IRS, a Spokane police fraud detective and investigators from the Washington state attorney general’s office and the U.S. attorney’s office.

Dixie Randock, who used 11 aliases including “Patrick O’Brien, dean of studies at Saint Regis University,” declined comment after leaving the courtroom.

She got engraved diploma seals and fraudulent signature stamps for her cast of professors and deans from Carlson, a co-conspirator who operated a stamp shop in Hillyard.

He also became “provost and chief academic officer” for Saint Regis University and “dean of studies” for Robertstown University, signing his name as “Professor Blackwell.”


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