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Online 'Diploma Mills' Shut Down at FTC's Request

By Sean Cavanagh. Cross-posted from the Marketplace K-12 blog.

A federal court judge in Florida has temporaily closed a pair of organizations that the Federal Trade Commission alleges have operated as "diploma mills," taking in more than $11 million from marketing and selling bogus academic credentials over the past few years.

At the request of the FTC, Judge James I. Cohn, of the Southern District Court of Florida, in Fort Lauderdale, issued a restraining order that halts a group of organizations and individuals from offering diploma services, saying there is "good cause" to believe they violated federal law. The organizations named in the order are Diversified Educational Resources, LLC; Motivational Management & Development Services; and IDM Services, LLC.

The FTC found that those entities and individuals associated with them were putting out misleading information using different websites and collectively functioning as mills, Ioana Rusu, a staff attorney for the agency, told Education Week.

The commission says the organizations have been selling online high school diplomas since 2006 using a variety of names, such as Jefferson High School Online and Enterprise High School Online. The businesses falsely claimed that enrollees could secure "official" accredited high school diplomas, for which they were charged between $200 and $300, for use in college, the military, and the workforce, according to the FTC.

The businesses' practices violated federal law by misrepresenting the value of the credentials, and by claiming that the online schools were accredited--when in fact they fabricated an accrediting body to give the appearance of legitimacy to their operation, the FTC said in a statement.

A call by Education Week to a number associated with Diversified Educational Resources was not returned, and other efforts to reach the organizations named by the FTC were not successful.

The FTC is a federal agency that is focused on consumer protection, and attempts to stamp out practices it regards as deceptive or anti-competitive. The agency says that cracking down on diploma mills has been a high priority. One of its websites offers a guide with information on how consumers can recognize diploma mills, and "the costs of a fake degree."

 "A high school diploma is necessary for entry into college, the military, and many jobs," Jessica Rich, the director of the FTC's Bureau of Consumer Protection, said in a statement on the order. "These defendants took students' money but only provided a worthless credential that won't help their future plans." 

In this case, the commission voted unanimously to authorize the FTC staff to file the court complaint. The complaint was filed under seal in federal court, and the seal was lifted last week, according to the FTC. The commission says it files a complaint when it has reason to believe the law has been broken on a matter in the public's interest.

Rusu told Education Week that after the temporary restraining order expires, the FTC will seek another injunction to make sure that the businesses named in the complaint cannot sell diplomas. The agency's goal is ultimately to make sure the organizations are shut down, and that individuals who bought diplomas from them receive restitution, the attorney said.


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