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The Spokesman-Review Newspaper The Spokesman-Review

Friday, May 29, 2020  Spokane, Washington  Est. May 19, 1883
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Child porn images on seized computers

Four computers used as part of an alleged Spokane-based diploma mill operation also stored more than 10,000 images of child pornography, a federal prosecutor said Tuesday.

The statement came after a grand jury indicted Kenneth Wade Pearson on federal charges of possession and receipt of child pornography.

The indictment also seeks forfeiture of four computer hard drives seized by federal agents in a search last year of Pearson’s home at 2727 N. Nelson.

“These child pornography charges are a direct outgrowth of the task force investigation of the diploma mill operation,” said Assistant U.S. Attorney Stephanie Lister.

Pearson is the only one of eight defendants in the diploma mill case to be charged with federal child pornography counts, Lister said.

If convicted of receipt of child pornography, Pearson faces a minimum mandatory term of not less than five years in prison. A conviction for possessing child porn carries a term of not more than 10 years in prison.

Pearson was questioned in August when a specially created federal task force investigating the alleged diploma mill operation searched multiple locations in Spokane, Post Falls and Arizona. The questioning took place at a business office at 601 E. Seltice Way in Post Falls, Lister said.

He gave authorities permission to search his Hillyard home, and investigators later obtained a federal search warrant, seizing four computer hard drives there, the federal prosecutor said.

“An examination of these hard drives showed they contained sexually explicit images of children, some under 12,” Lister said, adding that a subsequent forensic examination of the four hard drives “ultimately found they contained over 10,000 images of child pornography.”

Pearson, 30, is scheduled to be arraigned Feb. 9 in federal court on the child pornography charges. He and seven others, including accused diploma mill ringleaders Dixie and Steve Randock, were indicted in October on federal charges of wire and mail fraud, money laundering and conspiracy.

Pearson, the Randocks and five other defendants are scheduled to stand trial together in October in U.S. District Court. There are indications some of the defendants may plead guilty before that time and agree to testify as prosecution witnesses.

In that case, investigators allege the Spokane-based operation used the Internet to sell fraudulent high school and college degrees worldwide using more than 300 fictional online “colleges and universities.”

Pearson worked as “webmaster” for the operation, setting up and maintaining various Web sites selling college and high school degrees, investigators said. His involvement in the alleged diploma mill operation was first documented in a November 2003 story published in The Spokesman-Review, months before a federal investigation was begun.

Pearson was listed as the “registrant” for Liberty Prep, a fictional online school offering high school diplomas for sale as a prestige enhancement to people with GEDs.

The newspaper’s investigation tracked the Liberty Prep operation to Pearson’s residence, a pinkish house in Hillyard with an overflowing garbage can and broken-down speedboat in the front yard. No one answered the door then, and Pearson since has refused interview requests. The federal investigation, begun early in 2005, involved formation of a multi-agency task force led by the U.S. Secret Service. Also participating are the Internal Revenue Service, Bureau of Immigration and Customs Enforcement, Postal Inspection Service, Washington State Attorney General’s Office and Spokane Police Department.

The federal investigation received enhanced priority when agents learned more than half the diploma mill’s degrees were sold to foreign nationals, some of whom were said to have been using them to gain entry into the United States.

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