With little more than a network of Web sites, telephones and bank accounts, a group of eight people ran a million-dollar diploma business that churned out thousands of bogus degrees, according to a federal indictment.

The group, which ran St. Regis University and several related businesses, was based in the Spokane area, although it purported to run accredited colleges in Liberia. About half of the diplomas issued by the group went to foreigners, leading authorities to worry that some may use their phony degrees to qualify for U.S. work visas.

The indictment does not allege anyone used a bogus diploma to get into the country. However, a Secret Service agent posing as a retired Syrian military officer seeking a work visa was able to buy degrees in engineering and chemistry, according to the indictment.

"We're concerned about it and it continues to be under investigation," said Thomas Rice, chief criminal prosecutor in the U.S. Attorney's Office in Spokane.

The elaborate deception included online photos of what were supposed to be campuses in Liberia, including a photo of Blenheim Castle in England, where Winston Churchill was born, the indictment states. The group also allegedly tried to hire Liberian professors — not to teach classes but to answer phone calls.

Named in the indictment, handed down Wednesday, are Dixie Ellen Randock, Steven Karl Randock Sr., Richard John Novak, Blake Alan Carlson, Amy Leann Hensley, Heidi Kae Lorhan, Roberta Markishtum and Kenneth Pearson, all charged with mail fraud. In addition, the Randocks are charged with money laundering. The U.S. Attorney is also seeking to seize a number of assets, including $480,000 in bank accounts and a 2001 Jaguar.

A phone message left last night for the Randocks was not immediately returned, and it was not known if they had hired lawyers.

Big business

The diploma-mill phenomenon is vast and thriving, according to national experts, and relies on the Internet and e-mail to attract customers. It recently made local news when it was discovered that King County sheriff candidate and department veteran Jim Fuda took advantage of a Sheriff's Office perk and obtained an online diploma to get a 2 percent pay raise. Fuda said he simply submitted his diploma and got the raise, so he assumed there was nothing wrong.

The indictments, handed down out of the Eastern District of Washington, portray a well-thought-out operation. The group operated diploma mills under a variety of names, including James Monroe University and Trinity Christian School as well as St. Regis, according to the indictment. The schools offered degrees from high school to doctorate for $400 to nearly $2,500. The indictment said the diplomas, complete with official-looking seals, came with phony transcripts and grade-point averages, and that course descriptions were cut and pasted from other Internet sites.

They set up "verification" businesses, with telephones manned by group members in case an employer called to ask questions. And they even created a business to "accredit" the diploma mills as a way to make them seem legitimate, the indictment alleges.

The indictment quotes an e-mail from Dixie Randock to another defendant demanding "someone ... answer the damn phones and say we are fully accredited" in Liberia. Randock allegedly wanted to hire Liberian professors for $50 to $100 a month to answer phone or e-mail questions. "The first time they do not say the right thing, their money gets cut off permanently," the e-mail states.

Evaluating visas

One of the related businesses purported to evaluate credentials for an H1B visa, which has authorities concerned that a foreigner may use a bogus diploma to get into the United States, according to Rice of the U.S. Attorney's Office.

To get an H1B visa, a foreigner must be sponsored by an employer and have at least a bachelor's degree in a specialty occupation, such as chemical engineer, said Steve Miller, a Seattle immigration lawyer. The number of H1B visas is limited and employers pay thousands of dollars for them, including a fee intended to help weed out fraud.

St. Regis is not affiliated with any similarly named schools, including Regis University of Colorado.

An arraignment is set for Oct. 27. Mail fraud carries a possible sentence of up to five years in prison. Money laundering has a possible sentence of 20 years.

The St. Regis Web site has been taken down, although one blurb remains: "Special Notice to St. Regis University Students & Alumni: The admissions office of St. Regis University is no longer accepting applications."

Maureen O'Hagan: 206-464-2562 or mohagan@seattletimes.com

Times researcher Gene Balk contributed to this report.