Bail granted for operators of alleged online diploma mill

SPOKANE — The alleged kingpins of a phony diploma operation that has federal investigators concerned about its possible use by terrorists have been granted bail.

U.S. Magistrate Judge Cynthia Imbrogno agreed Wednesday to release Dixie E. and Steven K. Randock Sr. on bond, but banned them from using the Internet for anything but a real estate licensing venture.

The Randocks were indicted Oct. 5 on charges of conspiracy to commit wire and mail fraud and money laundering stemming from an alleged scheme to sell academic degrees online for bogus universities.

Federal investigators contend that half the phony degrees sold by "Saint Regis University," "Robertstown University" and "James Monroe University" went to overseas purchasers, many of whom were "students" from Saudi Arabia.

The buyers could have used their fraudulent college degrees to apply to legally gain entry into the United States, the investigators contend, raising potential terrorism and homeland security issues.

The magistrate agreed to release the Randocks pending trial if they signed over the deed to their $700,000 home and adjoining acreage north of Spokane, and if each signed a $100,000 personal signature bond.

Prosecutors contend Steven Randock dug up as much as $200,000 buried in his back yard after federal agents served a search warrant at the residence in August. Randocks lawyers disputed the claim.

Six others were indicted in connection with the phony diploma operation, but federal prosecutors allege the Randocks were the kingpins of the scheme that may have sold as many as 15,000 degrees and created more than 300 fictional online colleges over the past six years.

The Randocks also operated the "Official Transcript Verification Center," where employees would confirm the validity of the degrees if employers questioned their authenticity in hiring or promoting one of the purchasers.

The indictment contends the Randocks owned the institutions identified in the documents as "Saint Regis University," "Robertstown University," "James Monroe University," "James Monroe University High School" and "Trinity Christian School."

A consumer could also access a Web site and take a 125-question test, answer only 25 percent of the questions correctly, and be awarded a high school diploma, the court documents allege.

The degrees and related documents would then be printed and shipped.