How police busted a multi-million-dollar ‘ghost college’ scam
The phone call that ended Bobby Singh’s $2 million fraud against the Federal Government lasted four minutes and 38 seconds.
Key points:
- Bobby Singh was the owner of private college St Stephen Institute of Technology
- Mr Singh ran it as a “ghost college” as part of a multi-million-dollar scam
- Mr Singh was sentenced to six years in prison
On July 1, 2015, Mr Singh was greeted by a cheerful auditor from the Australian Skills Quality Authority (ASQA).
“Good morning Mr Singh … I’m calling because I’ve been asked to conduct a compliance-monitoring visit of your premises,” ASQA auditor Kate Owen told Mr Singh on the phone.
“From time to time, we actually like to come and visit a provider on the site, have a look at some documents … some of the things that you’re required to keep under the legislation.”
Mr Singh was the owner of private college St Stephen Institute of Technology in Melbourne.
Mr Singh nodded, responding that he was happy to help. He hung up the phone. Within moments, he called Mukesh Sharma, an associate who ran another college, the Symbiosis Institute of Technical Education.
He told Mr Sharma to get ready. An audit was about to take place.
What Mr Singh and Mr Sharma did not realise was that federal agents had been listening the whole time.
Mr Singh’s phone had been tapped. Every call was being monitored and logged.
This single call would spell the end of a multi-million-dollar scam they had been running against the federal government, reaping more than $2 million in subsidies for students.
And it would expose what is known as a ghost college.
A new opportunity
Mr Singh is, by all accounts, a charming man.
In sentencing Mr Singh to jail, Judge Michael O’Connell acknowledged he had shown “a great deal of drive and initiative in many legitimate respects”.
He arrived in Australia at the age of 18 in 1999, and quickly moved into a range of entrepreneurial ventures.
He ran a security business in 2003. In 2005, he began working as a subcontractor to Australia Post, arranging teams of delivery services across Melbourne.
It was a wildly successful venture. Court documents reveal it made more than $17.5 million while it operated.
In 2011, Mr Singh found himself in a new business: he took ownership of a registered training organisation called the St Stephen Institute of Technology.
Mr Singh saw this college as a new kind of opportunity.
Lavish lifestyle sparked suspicions
PHOTO: Police seize a Ferrari from the home of Bobby Singh in Balwyn. (AFP Media)
When the ASQA auditor called Mr Singh in 2015, federal agents had anticipated it would send him into a panic.
Detective Superintendent Danielle Woodwardand a team of agents had been watching Mr Singh and his colleagues closely for at least six months, after a tip-off relating to their national police certificates.
They spotted a number of signs that indicated something unusual might be taking place.
Mr Singh was living in a lavish mansion, with an expensive Ferrari. The source of this wealth was unclear.
His colleges were in odd locations and appeared to have much less activity than would have been expected from colleges with hundreds of students enrolled.
PHOTO: Mukesh Sharma ran the Symbiosis Institute of Technical Education. (Supplied)
Mr Singh began preparing for the compliance visit from ASQA.
7.30 has obtained dozens of telephone intercepts and hours of surveillance video that show how this scam was undone.
On the day the audit was announced, Mr Singh made several phone calls instructing the members of his syndicate — Mr Sharma and Rakesh Kumar — to begin preparing the colleges for the audit, by making assessment records.
He tells one of the members of the syndicate: “No-one does it in [the] correct way. No college has that, you can go to any college.”
In one critical intercept, one of Mr Singh’s associates tells him: “We know that we are doing ethically and legally wrong.”
But it was not just Mr Singh’s phones that were tapped.
On a day like July 5, 2015, there were six classes scheduled across the day.
With six classes running, you would expect dozens of students walking in and out of the college. But this was not the case.
Federal agents had covertly installed a surveillance camera inside the lobby of the St Stephen college.
Footage from the same day shows just a cleaner entering the premises. No students are visible.
Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.
Across days of these surveillance tapes, not a single class was taught in accordance with the timetable that was given to ASQA.
On 20 of the 23 days the surveillance device was active, only three days showed any students attending the college.
On the three days they did attend, none remained for the duration of the timetabled class.
“In essence, there was no teaching and there was certainly no students that were involved in any sort of actual education,” Detective Superintendent Woodward said.
The only day of significant activity occurred shortly after the call announcing the audit.
“What we saw … was a whole lot of computers and paperwork coming into the actual institute,” Detective Superintendent Woodward said.
Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.
“But then the computers actually weren’t networked, they weren’t connected to anything. So they basically just brought in all this material to comply … with the compliance visit.”
The particular type of scheme is known by some who work in the vocational training sector as a “ghost college”.
“It’s an organisation that ticks all the boxes in terms of its appearance,” Larissa Kernebone, a former ASQA auditor who now works as a consultant to training organisations, told 7.30.
“It looks like a training college, when in fact students are not really doing their training, they’re actually out working or doing something else with their time.”
And Mr Singh’s was slowly unravelling.
Plagiarised assessments had same mistakes
PHOTO: Two assessments have the same answers and matching spelling errors. (Supplied)
In August 2015, police decided to execute search warrants on Mr Singh’s home and at each of the two colleges.
What they found inside the two college spaces were largely empty rooms, with little signs of life.
“What we found was two vocational education systems that had incredibly meticulous records for students that didn’t fundamentally exist,” Detective Superintendent Woodward said.
What they did find were thousands of pages of documents that formed part of the elaborate sham.
The colleges had “sets” of answers, with plagiarised answers pre-prepared to be filled out on different student assessments.
When federal agents analysed thousands of the documents, they were able to identify the exact same answers filled out for different students — even with the same spelling mistakes.
“The plagiarism … actually had spelling errors in it … they’d write in ‘chief’ instead of ‘chef’,” Detective Superintendent Woodward said.
The work involved in plagiarising all of these student assessments was extraordinary.
“It probably would have just been simpler to actually educate people,” she added.
How the scams worked
Police alleged there were two parts to Mr Singh’s scam. Fee-paying international students could undertake study with private training colleges.
“They were making money, easy money,” Detective Superintendent Woodward said.
“They take that money, and then basically tell the students that you don’t have to come [in], just give us your money, and we’ll just give you the certificate.”
The outcome was devastating for some of those students.
“They come out to Australia, they paid a lot of money to get their certificates … and they’re basically fake,” Detective Superintendent Woodward said.
“And that’s not what our country is about. So I think it had a huge impact.”
The revelations about Mr Singh’s scheme were a major scandal at the time, and contributed to the decision to freeze funding levels for the VET system by the federal government and greater oversight of training organisations.
VET funding has now been substantially tightened up.
The second part of the scam involved domestic students. The Victorian Education Department also provided subsidies for students enrolled in training courses.
“The domestic students, most of the time, had no idea or even enrolled,” Detective Superintendent Woodward said.
Haripal Chahal had recently become an Australian citizen when he received a knock on his door from two federal police agents in August 2015.
PHOTO: Haripal Chahal was shocked to learn his identity had been stolen. (ABC News: Paul Farrell)
“I was shitting my pants mate, I was shitting my pants,” he told 7.30 at his home in northern Melbourne.
“I was really afraid. I thought maybe they’re here to deport me or something.”
The two agents — who Mr Chahal stresses were incredibly polite and friendly — began asking him about his qualifications, and what college he went to.
“I showed them all the documents, all the certs, cert three, cert four and the diploma, but they said, ‘Have you done any other courses?'” he said.
Mr Chahal had never heard of the college they were asking about: the St Stephen Institute of Technology.
Mr Chahal was shocked to be shown documents from inside Mr Singh’s college that appeared to contain his signature and identification details, enrolling him in courses.
He has no idea how his identity was stolen, but speculates it could have been a petition at an Indian community event.
“I was very disappointed because it gives a bad name to the community as well,” he said.
He was one of more than 40 students who later gave evidence against the syndicate in court.
“I was happy to give all the information I had … I had nothing to hide,” he said.
Bleak outlook for students
Mr Singh was sentenced to six years’ jail for his role in the scheme.
Rakesh Kumar and Mukesh Sharma, who were key players in the syndicate, were both sentenced to five years.
Mr Singh’s wife, Rekha Arora, was also found guilty, and was released on a good behaviour bond for a period of three years.
The outcome for some of the international students who attended the college has been bleak.
“They get basically scammed,” Detective Superintendent Woodward said.
PHOTO: Bobby Singh was sentenced to six years in prison. (Supplied)
“To be given a certificate, which is now worth nothing to them, they’ve lost their money.
“That goes back overseas to their homes and to their families. And so that really damages our reputation.”
Ms Woodward says the AFP will continue to look closely at the vocational training sector.Follow this story to get email or text alerts from ABC News when there is a future article following this storyline.Follow this story
Today, ASQA is cancelling far more training organisations than it has in the past, but some providers are successfully challenging decisions in the administrative tribunal.
Ms Kernebone says there are still sinister forces at work behind some existing colleges.
“When I began consulting, I was engaged and working with a very significant RTO [registered training organisation],” she said.
“They gave me a lot of information, I observed, and had calls from the CEO to tell me that ASQA was on their door knocking.
“My perception of this RTO was that they needed to be shut down immediately. And my perception was that they needed to be referred to the federal police. And this RTO continues
to operate.”
An ASQA spokeswoman told 7.30 in a statement it had only had its decisions varied or set aside on 11 occasions.
“Having strengthened our risk-based approach to focus our activities on those considered more likely to be non-compliant, it follows that the proportion of adverse decisions would increase,” they said.
Watch this story tonight on 7.30. – Source: ABC News Australia
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