Markets Wired

The principal owners of two Florida-based online diploma mills are permanently banned from marketing and selling academic degrees under settlements with the Federal Trade Commission.

Alexander Wolfram and IDM Services, LLC, and Maria Garcia have settled charges that they deceived consumers into enrolling in their programs by claiming they could obtain “official” and accredited high school diplomas and use them to enroll in college, apply for jobs, and “receive the recognition [they] aspire for in life.” The defendants also fabricated an accrediting organization to give legitimacy to their diploma mill operation, according to the FTC’s complaint.

Doing business as “Jefferson High School Online” and “Enterprise High School Online,” defendants led consumers to believe that those who passed their online multiple-choice exam and paid between $200 and $300 could obtain legitimate high school diplomas. The defendants claimed that their online test was styled like the GED test. On Sept. 16, 2014, a U.S. district court judge signed a temporary restraining order to halt the deceptive practices and freeze the assets of the defendants.

In addition to permanently shutting down their operation, the settlements also prohibit the defendants from making misrepresentations in connection with the marketing or sale of any other product or service.

The orders also impose a judgment of more than $11.1 million against the defendants and the corporate relief defendants, which will be partially suspended based on their inability to pay. Relief defendants Tiffany Chambers and Sylvia Gads also agreed to monetary judgments for the amounts they received from the scheme, which also are suspended because of their inability to pay.

If the defendants or relief defendants are found to have misrepresented their financial condition, their entire judgment would become immediately due in full.

The FTC is also seeking separate default judgments with similar prohibitions against two additional businesses operated by the defendants: Diversified Educational Resources (DER) LLC and Motivational Management & Development Services (MMDS), Ltd.

The Commission vote approving the orders was 5-0. The order against Wolfram and IDM was filed in the U.S. Court for the Southern District of Florida on Jan. 12, 2015, and the order against Garcia was filed on Jan. 13, 2015. Both have been entered by the judge. In addition, the motion for default judgments against DER and MMDS was filed on Jan. 20, 2015.

Students interested in pursuing a degree online should review the FTC’s guidance on Diploma Mills.

NOTE: Stipulated orders and default judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.