Tuesday, March 21, 2006

Scammer says he bribed diplomats

Bill Morlin
Staff writer
March 21, 2006

The operators of Spokane-based diploma mills used an Arizona man to pay three top-ranking Liberian diplomats more than $43,000 in a series of cash bribes, according to court documents filed Monday.

Richard John Novak admitted in U.S. District Court in Spokane that he paid the bribes to senior Liberian diplomats in Washington, D.C., Liberia and Ghana, with the money coming from the Spokane bank accounts of Dixie and Stephen Randock of Colbert, Wash.

The Liberian diplomats, who aren't named in the public documents, allegedly took the money after agreeing that Liberia's Board of Education would provide "accreditation" for Saint Regis University.

Federal investigators describe the online university as a worldwide fraud scheme one of several diploma mills operated in Mead, Hillyard and Post Falls by the Randocks and six other co-conspirators.

With the accreditation, their diploma mill raked in $4.7 million in fraudulent sales of an estimated 6,000 college degrees, about 40 percent of them to foreign residents seeking entry into the United States, investigators say.

The bribes to the Liberian officials were carried out by Novak, formerly of Spokane, who pleaded guilty in federal court to conspiracy and violating the Foreign Corrupt Practices Act.

Judge Lonnie Suko accepted Novak's two guilty pleas and allowed him to remain free until sentencing, tentatively set for December.

As part of his plea bargain, Novak became the second of two conspirators to cut deals with the Justice Department, agreeing to testify for the prosecution during a trial scheduled for fall.

It is believed to be the first foreign bribery case filed in the Eastern District of Washington, said Assistant U.S. Attorney George J.C. Jacobs, in charge of the prosecution.

The federal prosecutor said he didn't know if the Liberian diplomats are still in the United States.

Because they have diplomatic immunity, the U.S. State Department would have to approve charging the diplomats criminally a tedious and diplomatically sensitive process that may never occur.

One of the Liberian diplomats was secretly filmed accepting a cash bribe from Novak in a Washington, D.C., hotel room after the U.S. Secret Service opened an investigation triggered in part by a November 2003 story in The Spokesman-Review.

Novak, who now lives in Peoria, Ariz., doesn't have a college degree and only attended one year of Spokane Community College before beginning a career selling cars.

But after joining the conspiracy in 2002, the car salesman was identified on the Saint Regis University Web site as holding three doctorates in international business, educational administration and psychology.

'Whatever was necessary'

Dixie Randock, the court documents allege, instructed Novak in 2002 to travel to Washington, D.C., to "obtain documents from the U.S. State Department and foreign embassies for Saint Regis University and other diploma mill universities she set up.

"The Liberian Consul subsequently informed Novak that if he paid $4,000 in U.S. currency, the Liberian Consul would get him accreditation documents signed by the Commissioner of Higher Education for the Republic of Liberia, stating that Saint Regis University was accredited in Liberia," the court documents say.

When Novak told Dixie Randock that the Liberians were demanding cash bribes, she "instructed him to pay the Liberian Consul and do whatever was necessary to obtain accreditation from the Liberian government official."

In short order, the Saint Regis University's Web site claimed it was legitimate and recognized by the Board of Education in Liberian as a distance-learning operation.

But that attempt at credibility triggered a flood of telephone calls from would-be purchasers of online degrees.

When Liberian embassy officials in Washington, D.C., complained of getting too many phone calls, Dixie Randock agreed to pay more bribes $400 a month to the Liberian Consul to "validate inquiries from the public about the legitimacy of Saint Regis University," the court documents say.

The money was wired from a bank in Spokane County to the Liberian Consul's personal bank account, the court documents say.

About $19,200 wired

Between October 2002 and September 2004, approximately $19,200 was wired from the Randocks' bank account to the unidentified Liberian's account in Maryland.

Novak's guilty pleas mean he could spend as much as 10 years in prison and face millions of dollars in fines. He will testify against the Randocks and seven other defendants.

Blake Alan Carlson, the owner of a Hillyard rubber stamp shop who provided the embossed seals for the bogus college and high school degrees, pleaded guilty earlier this month to involvement in the conspiracy.

He also agreed to become a prosecution witness.