The chairman of the board of directors of an unaccredited cyber university has been arrested on suspicion of running a fake diploma mill and swindling some 200 people out of billions of won.

Seocho Police said Wednesday that they had arrested Kim Moon-kap, chairman of the board of directors of Templeton University and booked the dean of its business department, Park, without detention on suspicion of fraud and violation of the Higher Education Act.

Kim, 45, is suspected of issuing fake university degrees after establishing Templeton as a cyber university and taking 1.7 billion won in tuition from 199 students. 

From July 2015, the institution, which claims to be located in Charlotte, North Carolina, promoted itself as a university that was officially approved by the US Justice and Treasury departments and the state government and the regional education authority via websites and online communities.

It said its students in Korea could take online courses and offline classes at its main campus in the United States to obtain a US university degree. Early graduation certificates were available for an additional fee, it also said.

But the Korean police confirmed that the university was not registered as an educational institution in Korea or the US. It was only registered as a business entity with the California state government and the Internal Revenue Service there in May 2015.

According to Korean law, if any party other than the government wants to establish a school, it requires authorization from the Ministry of Education.

One of the victims of the alleged fraud is a former presidential candidate who came seventh in the May election. Kim Min-chan, who ran as an independent, was sued for violating the election law with a forged academic record. The prosecution accepted Kim’s testimony that he did not know that his diplomas from Templeton University were not authentic.

The students, who had paid an average of 4 million won per semester, expressed fury and disbelief.

“The school seemed to provide a very busy curriculum and I have spent two years studying very hard. I just want to believe that their plan was to obtain accreditation from the US federal government,” a student who declined to give her name told The Korea Herald. She explained that the university director had said the school would be approved as an education institute by the US Department of Education.

“The institute told us they were accredited by the North Carolina state government. It is a foreign school that cannot be approved by the Korean Ministry here,” Kim Se-woo, who has taken psychology classes for a year and four months at Templeton, told The Korea Herald. He also recalled that the courses were very strict and well organized.

Kim, who also said he had personally spoken to the arrested chairman, said that the university chief was aware of suspicions about its accreditation.

“I just needed to study, and needed the courses. Police asked me to testify, calling me a victim, but I do not understand why I am a victim,” he said.

Meanwhile, police said it will expand their investigation as they have found other similar cases of fake degree mills.

By Jo He-rim (herim@heraldcorp.com)