EXCLUSIVE: Chinese firm withdraws from U.S. effort to fight college application fraud

By Steve Stecklow

LONDON (Reuters) - A major Chinese education company that was subsidizing a project to verify transcripts of Chinese students applying to U.S. colleges has pulled out after Reuters reported that the firm itself stands accused of widespread application fraud.

Shanghai-based Dipont Education Management Group "has withdrawn from the project," Jerome Lucido, who heads a University of Southern California research center that has been working on it, said in a statement to Reuters.

Jeff Zhu, Dipont's vice president, said the project's advisory board, which includes representatives of some of America's top universities, had recommended that the company withdraw "to eliminate any possible question of who has control over the project."

The project's future is now unclear. A committee of participating schools - including Stanford University, Columbia University, Massachusetts Institute of Technology and the University of California, Los Angeles - "is on hiatus and plans to reconsider how it approaches the project," Lucido said. At least two schools - Swarthmore College and Pomona College - dropped out.

The legitimacy of applications coming out of China has become a growing problem for many U.S. colleges, which have come to rely on Chinese students able to pay full tuition. Hundreds of Chinese companies have sprung up to help students get into American universities, and their services sometimes include falsifying documents, Reuters found.

Dipont operates international programs in Chinese high schools and also offers college counseling services. Last year, 17 former Dipont employees told Reuters how the company had engaged in college application fraud, including writing essays for students and altering teacher recommendation letters.

Brian Perkins, an American who taught at a Dipont school in Hangzhou from 2012 to 2014, said he was pressured by Chinese supervisors and other employees to give good grades to students who skipped class. He said he did it "under protest."

In a statement, Dipont disputed the accounts of academic fraud but said it would "promptly and thoroughly investigate any credible evidence of any situation in which the company's legal and/or ethical standards may not have been upheld by any of its employees."

Meanwhile, the status of a $750,000 pledge by Dipont's founder and chief executive, Benson Zhang, to the USC Rossier Center for Enrollment, Research Policy and Practice is now unclear. According to Zhu, the center, which helped launch the transcript-vetting project, can keep the $525,000 paid to date. But Zhu didn't address whether Zhang planned to make good on the rest. USC declined to comment.

The first payment - $300,000 - was made on Zhang's behalf by a New York-based non-profit set up by two Dipont consultants. Zhang said he repaid that money. The New York State Attorney General's office said it is reviewing the charity, the Council for American Culture and Education Inc. Reuters reported that the charity hadn't disclosed its ties to Dipont in New York and federal tax filings.

Zhu said the charity, which was another sponsor of the verification project, was no longer involved.

Reuters also has reported that Dipont paid thousands of dollars in perks or cash to admissions officers at more than 20 top U.S. colleges to come to China and counsel some of its students. "Dipont will decide at a later date whether to continue the summer admission institute," Zhu said.

(Additional reporting by Renee Dudley in Boston. Edited by Blake Morrison)