NAIROBI, Kenya- The US Justice Department has charged five people in the first cases announced under Operation Ghostbusters, a nationwide investigation into alleged fraud targeting federal student aid programmes.
Investigators say the broader schemes have caused more than $32 million in losses, with millions more suspected.
The alleged fraud involved stolen personal information from US citizens being used to create fake Federal Student Aid accounts and enrol “ghost students” at universities and community colleges.
The fictitious students did not attend classes, but their applications triggered aid payments that were allegedly diverted to accounts controlled by the fraud network.
In an announcement on Thursday, October 29, the Justice Department said refunds were routed through bank accounts held by US-based money mules and foreign actors, including Kenyan nationals.
The department said investigators believe similar fraud has been ongoing since at least 2021, with the wider scheme estimated to involve more than $200 million.
More than $750,000 in cryptocurrency seized
The investigation has led to the seizure of more than $750,000 in cryptocurrency from an account belonging to a Kenyan national linked to the alleged scheme, according to the Justice Department.
US officials said the seizure followed intelligence and assistance from Kenyan law enforcement and was the first international seizure of its kind in the department’s Fraud Division history.
Kenya’s Directorate of Criminal Investigations, Asset Recovery Agency and Office of the Director of Public Prosecutions are among the agencies working with US authorities.
The Justice Department said the partnership would continue to focus on recovering funds and pursuing suspects believed to be outside the United States.
The five defendants face charges in cases brought in Virginia, New Jersey and Nebraska.
The New Jersey case involves three people accused of receiving federal student aid obtained through fraudulent applications and transferring money to associates in Kenya.
In Nebraska, Francis Mogambi, a Kenyan citizen, was indicted on charges including theft of government money and aggravated identity theft.
The Virginia case involves a Kenyan national charged in an indictment that remains under seal, according to the Justice Department.
The department said investigators had identified 830,840 potentially fraudulent Federal Student Aid identification numbers linked to nearly $130 million and recommended that the Education Department disable them.
It also reported more than 40 open cases across 26 FBI field offices, with additional investigations continuing.
FBI Criminal Investigation Division Assistant Director Heith Janke said investigators had identified more than $32 million in losses across similar “ghost student” schemes, with further losses suspected.
The charges are allegations, and all defendants are presumed innocent unless proven guilty in court.
