I'm pretty sure it doesn't break any laws. You have the right to pay someone to give you a useless piece of paper.

As a side note, I thought it was amusing that you mentioned that a "university" would target the uneducated. (Yes, I'm using the term "university" very loosely).

Degree mills are illegal in some countries and some U.S. states. In some states it's illegal to use a degree from a diploma mill to gain employment.

http://en.wikipedia.org/wiki/Diploma_mill

http://en.wikipedia.org/wiki/Diploma_mills_in_the_United_Sta...

If both of the "accreditation organizations" were in fact set up by the scammers behind Lorenz, I'm pretty sure that's clear-cut fraud. Someone just needs to subpoena the domain proxy service.