An Arizona woman pleads guilty to running an elaborate scam that highlights what federal authorities describe as the vulnerability of online education to financial-aid fraud. The scheme embroiled Rio Salado College, home to one of America's largest online programs, in a half-million-dollar con.

A federal grand jury in Kansas indicted a former college-basketball coach last month on charges that he arranged for his players to receive phony academic credit and stole $120,000 in Pell Grants. The former coach faces a total of 51 years in prison and over $1.5-million in fines if found guilty of all counts.

An online university that supposedly granted a graduate degree in business to a pet cat was sued Monday for consumer fraud by the Pennsylvania Attorney General's Office.

La Salle University, a religious degree-granting correspondence university, was shut down by the FBI for issuing falsely accredited degree in 1996. Due to the fraud, the students were notified personally or through advertisements that they could receive restitution from the over $ 10 million seized from La Salle. However, due to a bad computer system it is still possible that some students were left out.

Diploma-mill owners are an elusive bunch. They flood e-mail boxes with offers of cheap college degrees, and collect payment through Web sites, then filter that money into overseas bank accounts. When the police try to shut one of the businesses down, the owners just set up shop elsewhere, often in a poor country with weak fraud laws. Unable to snuff out these illegal businesses, many states have changed their strategy: if you can't catch the dealers, go after the consumers. A handful, like Illinois, Indiana, and New Jersey, have recently criminalized the use of fake degrees.

In the US, the government is not directly implemented in the procedure of accreditation. Private agencies are taking care of this. The Education Department is recognizing some agencies. However, they do not do much to stop the activities from less honest ones. Several education institutes are not accredited due to the high procedure costs.

A report released by the department says a project called the Distance Education Demonstration Program has shown that waiving financial-aid restrictions on distance-education providers did not lead to any problems. The rules were designed to prevent fraudulent correspondence programs from gaining access to federal student-aid money. But the report leaves out details about one instance in which an institution closed down after it took advantage of a rule waiver and was then found to be riddled with fraud.

A non-profit corporation that provides a high-speed computer network to colleges in New York State agreed last month to pay the federal government $1.4-million in a lawsuit alleging that it had misused a federal grant.