It was just before 10pm when a black car turned into the driveway of a house in the town of Independence, Kentucky, reversed out again, then pulled into the house next door.

Two men climbed out, Umair Hamid and his brother-in-law Saqib Ghayoor, who was driving the car. Across the street, three men were watching in wait from a parked car.

They were Special Agent Timothy Lucey of the FBI, Postal Inspector Michael Loforte, and a third agent from the FBI’s office in Kentucky.

The agents were in plainclothes and armed, although their weapons were not displayed. Once they sighted him, they walked up to Hamid and asked if he was Umair Hamid.

He confirmed that he was, at which point the agents identified themselves and asked if they could speak with him. He replied that they could.

They asked him if he knew anybody by the name of Brett Loebel. Hamid replied yes, and told them that he was planning to meet Loebel in Chicago next week.

Sensing trouble, he asked: “Is this a civil or a criminal case?” It’s a criminal case came the reply, and the agents informed Hamid that he was under arrest.

Hamid was handcuffed, and after collecting some of his belongings, including his laptop, was placed in the backseat of the car the agents had arrived in.

He was taken to the Campbell County Jail, a little more than 10 miles to the north, on the banks of the Ohio river.

Agent Lucey drove the car, while Postal Inspector Loforte sat in the back with Hamid and asked more questions during the 25-minute journey to the jail.

Hamid was asked for the passwords to his cellphone, laptop and four email addresses that he used.

He stated his designation as Vice President for Internal Audit at Axact.

And then the questions took a more serious turn.

The agents named specific persons and asked whether he knew them, and if so, in what capacity.

They started with Brett Loebel.

Loebel had been dodging allegations of selling diplomas and degrees from fake universities since the late 1990s at least.

In a radio program aired in April 2000, he was named as the owner of Trinity College in Sioux Falls, South Dakota.

It gave a local address not far from the studio from where the radio show — Eye on Keloland — was aired. Noticing this, the producers decided to pay a visit to the address.

“But when we got there, we found Trinity College was actually nothing more than a P.O. Box at Mailbox Etc,” said the host.

So they launched a long effort to locate the owner, an effort that led them straight to Brett Loebel, who was using another pseudonym to conduct his business.

Trinity was not Loebel’s only enterprise. Pace Christian University was another of his creations, as well Almeda College which earned some fame in 2004 when a New York man claimed he was able to get a degree from it for his dog.

Coronado Pacific University was a more recent creation, also traced back to Loebel, which became the centre of a class action lawsuit filed by victims in January 2016.

Loebel and Axact had been competitors in the mid-2000s, but eventually learned to work together, Hamid told the arresting officers.

Axact started renting its domains for universities from Loebel, but since May of 2015, when Axact’s operations were disrupted due to the arrest of its owners and senior management and the shutdown of its servers, their arrangement had suffered.

Now, Hamid told the officers, he was in touch with Loebel, and scheduled to meet him at noon the next day in the office of Todd Holleman, Axact’s lawyer in the United States.

The meeting was to “get money from Loebel that belongs to Axact,” the memorandum of the interview states.

The interview continued with more names.

Does he know Uzma Shaheen and Zubair Syed? Yes, replied Hamid, he had met both only a week before, “to open bank accounts.”

They are relatives of the CEO of Axact who has been using them “since the beginning to open bank accounts”, he went on.

Does he know Ali Vyajkora? Yes, he is the HR head of Axact, came the response, and a US citizen.

Does he know where Farhan Kamal is today? Yes, he fled to the US after the raid on Axact in Pakistan in May 2015, but has now returned to Pakistan.

Has he heard of the University of Atlanta? Yes, Akber Mithani rented the domain for that university to Axact.

He lives in Atlanta and has another domain by the name of National High School.

In time, Hamid’s lawyers would contest the legality of this “custodial interrogation”, saying he was never read his Miranda rights (the arresting officers say he was), and that he was not allowed to make a call to his attorney despite asking repeatedly to do so (the government lawyers would argue that he never explicitly asked to speak to his attorneys, only kept telling the arresting officers who his attorney was).

Hamid himself would tell the court that he only answered the officers’ questions because he is from Pakistan where “you are not permitted to refuse to answer questions from law enforcement.”

Hamid was soon transferred to New York, where his criminal complaint had been filed, and on the 3rd of January, 2017, appeared in the court where his fate would ultimately be decided: the United States District Court for the Southern District of New York.

The judge ordered the government to file the indictment by the 10th, at which point Hamid would be formally charged for the offenses laid out in the complaint.

Almost immediately discussions between his attorney and the prosecutors began, “regarding a possible disposition” of the case, and both lawyers requested the judge to extend the deadline by two more days to January 12 to allow them more time to reach an early settlement.

But that settlement did not come.

Instead, on January 11, Hamid retained a new legal team, led by Patrick Smith from Smith and Villazor, a prestigious law firm with its office on Broadway, a few blocks south of Central Park.

Their website says they specialize in white collar crimes, and have significant experience in “securities fraud, insider trading, financial statement and accounting fraud, market manipulation, money laundering, and healthcare fraud, as well as…export control violations. We have a strong track record of shutting down investigations before charges are filed.”

The indictment against Hamid, the document that formally brings the charges against the defendant in the American system, was filed a week later on January 18, after another round of discussions for an early disposition did not yield an agreement.

Hamid’s lawyers preferred to fight on rather than cut a plea deal.

The indictment was broad and far reaching, and clearly aimed at a network of individuals beyond Hamid.

“From at least in or about 2006,” it opened, “up to and including in or about December 2016, Umair Hamid…the defendant, and others known and unknown, operated a massive education ‘diploma mill’ through a Pakistani company, Axact, that has held itself out as one of the world’s leading information technology providers.”

The same language is sprinkled throughout the indictment. Wherever Hamid’s name is mentioned, it goes on to refer to other “co-conspirators, known and unknown”, relentlessly driving home the point that Hamid did not act alone.

It lists four websites in particular, those run by Loebel in earlier times — Almeda University, Paramount California University, Coronado Pacific University, and Belford High School, “among others.”

So who were these other co-conspirators, “known and unknown”, who were also integrally involved in the scheme described in the indictment?

“As a result of this scheme, from in or about 2006, through in or about May 2015 when authorities in Pakistan shut down Axact, Axact collected at least $140 million through US based bank accounts from tens of thousands of individuals around the world” says the indictment as it describes the scheme in considerable detail.

So who were these other co-conspirators, “known and unknown”, who were also integrally involved in the scheme described in the indictment?

Some clues might be in the questions that the arresting officers asked Hamid in the back seat of the car after his arrest, in that 25 minute drive to the Campbell County jail on the night of the 19th.

The first person they inquired after was Brett Loebel, incidentally the only name that Hamid himself took in the public record of the entire pre-trial proceedings.

But the arresting officers asked after Uzma Shaheen, Zubair Syed, Farhan Kamal and Ali Vyajkora, the latter two from Axact, the former two relatives of Shoaib Sheikh, owner of Axact.

But another clue is provided in a letter submitted to the Pakistani courts by the special public prosecutor in March of 2016.

The letter is on the letterhead of the legal attaché of the United States Embassy in Islamabad, and is dated February 8, 2016.

It is addressed to the FIA Director, Islamabad Zone, and begins thus: “As your service is aware, the FBI has been investigating a Pakistan-based entity named Axact, headquartered in Karachi.”

It describes the business of Axact as “the sale of fictitious college and high school diplomas”, and says that in order to conduct its enterprise, “Axact has established a worldwide web of shell companies and associates.

The shell companies have been used to veil Axact funds and proceeds.”

It identifies three primary shell companies as Mivvel Inc, Tullow Inc, and Tinko Inc.

“The directors of said entities have been identified,” the letter continues, then gives the ownership structure and the names. “Viqas Atiq, the Chief Operating Officer of Axact, holds 49% of the shares of Mivvel Inc. Shoaib Ahmed [Sheikh], the owner/President of Axact, holds 49% of the shares of Tullow and Tinko Inc. With respect to Mivvel Inc, the remaining 51% of the shares belong to Ali Gaffar Vyajkora.”

The remaining 51% shares of Tullow and Tinko were owned by Zubair Syed and Uzma Shaheen respectively, according to the letter.

In court, defense lawyers for Axact argued that the letter was a fake.

They based their claim on a Freedom of Information Act (FOIA) request their lawyer in the US, Todd Holleman, the same lawyer Hamid referred to his arresting officers, sent to the FBI in May of 2016, two months after the letter was submitted to the court in Karachi.

The lawyer asked for all Justice Department records where Axact or the three shell companies — Mivvel, Tullow and Tinko — are mentioned.

The FBI replied in October, saying “we were unable to identify main file records responsive to the FOIA” request, but added that records related to an ongoing investigation may not be subject to disclosure through FOIA.

At the time when the Axact’s defense lawyers in Pakistan claimed that the letter from the US Embassy was a fake, there were no indications beyond the letter itself that an FBI investigation of Axact was indeed underway. But two months later the criminal complaint filed in the New York court clearly stated that the FBI “has jointly investigated this matter.”

“Good morning. I’m Judge Abrams, and your case has been assigned to me. We’re here to arraign you on the indictment. Could you please stand Mr Hamid. Have you seen a copy of the indictment?”

It was 11:08AM on the chilly morning of January 23, 2017, and Hamid stood, for the first time, before the judge who would preside over the remainder of the proceedings.

“Yes I have,” replied Hamid.

“Have you discussed it with your attorney?” asked the judge.

“Yes I have.”

“Would you like me to read the indictment out loud or do you waive its public reading?” the judge continued.

“Waive,” replied Hamid.

“All right. How do you plead to the charges?” she asked.

“Not guilty,” he replied.

“All right. You may be seated.”

With this short ritual, the pre-trial formalities kicked off.

The government was now required to start presenting the material it had to support the charges in the indictment, a process known in American legal language as “discovery”.

The defense attorneys examine the charges and all other materials, and prepare pretrial motions to either ask for more information or seek to suppress certain sections of the evidence because it has been illegally acquired.

All through it, both parties remained engaged with each other to come to a “pre-trial disposition”, or a plea bargain of sorts.

As part of its “rolling discovery”, or submission of evidentiary material in support of the charges contained in the indictment, the government first furnished two memos detailing the government’s account of Hamid’s arrest.

Two days later, 25 audio recordings between Hamid and the cooperating witness who had played an instrumental role in his arrest were handed over.

A week later came a stash of 1,165 documents, including screenshots from various university websites, records provided by PayPal (of payments processed as part of the scheme described in the indictment), video surveillance footage from the branch of a bank showing Hamid opening an account into which money from sale of fake degrees was to be received, emails from accounts allegedly operated by Hamid, and much more. In legal terms though, this was still superficial evidence.

The next time Hamid saw the judge was on February 7 when his bail hearing was set.

His attorneys, Smith and Villazor, were both present in the courtroom with him, and made a strenuous appeal for bail in the face of government concerns that Hamid was a flight risk due to minimal ties to the country.

The shape of the argument that the defense team would build appears for the first time in this hearing.

“There is no allegation that my client had anything to do with the content of these websites which were not operated by Axact,” said Patrick Smith, the lead counsel on the defense team, “but were operated rather, as my client understood it, by various customers of Axact, and Axact provided hosting services and other ancillary services. But Axact was not the content provider, at least as my client understood it. My client had nothing to do with the content.”

They offered a million dollar bond, secured against the house of his sister and brother-in-law, from where he had been arrested, as well as a cash deposit of $250,000 (the government said they will “be interested in knowing where that is coming from, at a minimum.”).

The government shot back, saying Hamid posed a flight risk because he had few ties to the community. “[Y]our Honor should be aware” the prosecutor continued, “ultimately the prosecutor in Pakistan that was working on the case had a grenade thrown into their home and then mysteriously the prosecution in Pakistan came to a halt.”

Bail was denied.

A pre-trial hearing date was set for April 6, by when the defense team was supposed to file all motions objecting to any materials submitted by government.

The trial date was set for May 15.

As it turned out, Hamid never made it that far.

Two days later, the government told Hamid’s lawyers of a forthcoming production of evidentiary material that would be “quite large” and requested a “hard drive that can fit up to 100GB” of data.

In response, Hamid’s lawyers filed three motions on his behalf on February 21.

In the first, he sought to suppress the evidence gleamed from his conversation with the arresting officer on the night of December 19, arguing that he had not been read his Miranda rights, that the agents questioned him before informing him that he was under arrest, and that he had invoked his right to have a lawyer present but was denied that right.

In the second motion he sought the return of all property taken from him.

But it was the third motion where the real battle lay.

His lawyers demanded what they called a “bill of particulars” from the prosecution, calling on the government to “[i]dentify all persons alleged to be co-conspirators (or persons known to the grand jury) in the conspiracy charge”, which was the first of the four counts he was indicted on.

Beyond this, they demanded that the government specify what acts he has committed, what specific misrepresentations or false statements he had made which were alleged in counts two and three, to identify the victims and so on.

A few days after these motions were filed, on February 24, the first curious development occurred in the proceedings. Patrick Smith, the lead defence counsel, wrote a letter informing the court that “[w]e have been advised that Mr Hamid’s family is arranging the payment of our bills. However there exists the possibility that third parties are paying the fees on Mr Hamid’s behalf.”

Hamid’s family in the US was his sister and brother-in-law and, although not exactly indigent, it was still difficult to see how they were able to afford the fees for such an expensive legal defence.

Hamid himself referred to this at a later date, when he told the court “I was made aware by my counsel about the source of the money and I know my family cannot afford so probably…” and then he abandoned the train of thought in mid-sentence, according to the transcript of the hearing.

After this disclosure, the battle of the particulars began.

“Despite alleging a conspiracy that spanned over a decade, the nine-page indictment contains boilerplate language that contains few details about the alleged scheme, who participated in it, how it was executed, and what mis-statements were made to consumers and when those misstatements were made,” his lawyers submitted.

“Absent these critical details of the alleged scheme and Mr Hamid’s role in it, Mr Hamid is left to speculate what criminal conduct he is accused of committing.”

The demand for a “bill of particulars” was the core part of Hamid’s defense in the pre trial stage.

On March 6 the government filed its response, saying simply that all evidence proving that the arrest followed proper procedure, and that the demand for a bill of particulars “is meritless” and all material to establish this would be presented in the evidentiary hearing scheduled for April 6.

Patrick Smith, the lead counsel defending Hamid, shot back on March 14.

“The government should know what statements and acts form the bases of its charges against Mr Hamid” he wrote, “and its refusal to provide the requested information and its attempt to excuse its conduct with voluminous discovery smacks of gamesmanship”.

It looked like a battle was brewing for the hearing on April 6, as Hamid’s lawyers mounted a fierce defense, arguing that the indictment was “breathtakingly vague”,

On March 20 both sides submitted a list of the witnesses they would call for the hearing scheduled for April 6.

This was the final submission.

The order of battle was set for the pre-trial clash.

And then something even more curious happened.

The court record goes silent for the next 14 days.

No further documents are filed, and subsequent documents make no reference to any conversations between the two sides from here on.

But on April 4, two days before his biggest day in court thus far, Hamid abruptly folded his hand and put his signature on a guilty plea.

Whatever it was, it happened in those 10 working days between March 20 and April 6.

“The defendant hereby acknowledges that he has accepted this Agreement and decided to plead guilty because he is in fact guilty,” reads the plea agreement of April 4.

Did Hamid have to cooperate with further investigation of the larger scheme that he confessed to being a part of?

The plea agreement, and his statement before the court on April 6 are silent about any further cooperation. But in two places, the language points towards the possibility.

The plea agreement refers to “any Proffer agreements that may have been entered into” between the prosecution and Hamid.

Legal dictionaries define Proffer agreements as “a written agreement between federal prosecutors and individuals under criminal investigation which permit these individuals to give the government information about crimes with some assurances that they will be protected against prosecution.”

Second, the plea agreement also alludes to a reduction in the sentence based on the defendants statement to be given in court “and subsequent conduct prior to the imposition of sentence”, language that could mean further cooperation or just good conduct while in detention, awaiting sentencing.

What about the co-conspirators?

All documents are scrupulously silent on this.

One official with the US Attorney’s office in New York, speaking on background, could only say that “my guess is that the government does not want the co-conspirators named at this point in time.”

The writer is a member of staff. He tweets @KhurramHusain

Published in Dawn, EOS, May 7th, 2017

Court transcript

Umair Hamid - Court transcript by Dawn.com on Scribd

Indictment

A copy of Umair Hamid's indictment by Dawn.com on Scribd

Plea agreement

US vs Umair Hamid Plea Agreement by Dawn.com on Scribd