A detailed NYT report titled, "Fake Diplomas, Real Cash: Pakistani Company Axact Reaps Millions" written by New York Times Pakistan Bureau Chief Declan Walsh has outlined how local IT company Axact - referred to as the "secretive Pakistani software company" - allegedly earned millions of dollars from scams involving fake degrees, non-existent online universities and manipulation of customers.

The investigation asserted that Axact was involved in issuing fake degrees at a massive, global scale. It also raised questions about the funding by which the company was launching its upcoming media group Bol, referencing, "accusations by media competitors that the company is being supported by the Pakistani military or organized crime."

According to the report, Axact created a series of fake websites involving “professors” and students who were in fact paid actors.

The “university” websites mainly route their traffic through servers run by companies registered in Cyprus and Latvia, and employees would plant fictitious reports about Axact universities on CNN iReport, a website for citizen journalism.

Axact and its CEO, Shoaib Ahmad Shaikh, did not immediately respond to requests from AFP for comment.

In the statement on its website, Axact did not directly respond to the allegations but instead accused domestic media rivals of colluding with the New York Times to plant a slanderous story in order to harm its business interests.

According to an official in Pakistan's Federal Investigation Agency who did not wish to be named, the allegations raised by the newspaper would be a crime under Pakistan's Electronic Transaction Ordinance, punishable by seven years in prison.

The official added that the FIA was aware of the issue but had not launched an investigation because it had not received a formal complaint.

Responding to the New York Times' (NYT) article, Axact issued an official response on its website, terming the story "baseless".

"Axact condemns this story as baseless, substandard, maligning, defamatory and based on false accusations and merely a figment of imagination published without taking the company’s point of view. Axact will be pursuing strict legal action against the publications and those involved," said the company's response.

They also claimed local media groups Jang and Express were running a "defamation campaign" against Axact and Bol.

The response also alleged that Declan Walsh had devised a "one-sided story" without taking any input from the company.

"A last-minute, haphazard elusive email was sent to the company demanding an immediate response by the next day to which the attorney for Axact responded."

The response also stated that, "in an exemplary display of poor journalistic skills and yellow journalism, the writer quoted references from several imaginary employees to corroborate accusations made out of thin air."

Axact uploaded a detailed legal notice sent to NYT.

Aside from the release of its main report, NYT also published a separate post titled "Tracking Axact’s Websites" which listed "the sites for fictitious high schools and universities" that Axact is said to be running.

The NYT report said that "according to former insiders, company records and a detailed analysis of its websites, Axact’s main business has been to take the centuries-old scam of selling fake academic degrees and turn it into an Internet-era scheme on a global scale".

The accounts by former employees are supported by internal company records and court documents reviewed by The New York Times, it added.

Explaining its investigation, the report stated that, "Some of the details came from interviews with former employees of Axact, who identified roughly 50 sites, along with servers used by the company and blocks of custom website coding it developed. Starting from the list of employee-identified sites, The Times scoured the Internet for other sites that included similar technical details, servers, content and supporting links. More than 370 sites included at least some of those identifying components".

In academia, diploma mills have long been seen as a nuisance. But the proliferation of Internet-based degree schemes has raised concerns about their possible use in immigration fraud, and about dangers they may pose to public safety and legal systems.

Axact tailors its websites to appeal to customers in its principal markets, including the United States and oil-rich Persian Gulf countries, said the report.

Read the detailed NYT article here.

Read the list of alleged Axact-run sites here.