NAIROBI, Kenya – The United States Department of Justice has announced federal charges against five people in three states over an alleged multimillion-dollar student financial aid fraud scheme involving stolen American identities and money transfers to Kenya.
The investigation, code-named Operation Ghostbusters, targets a network accused of creating fake student accounts using personal information stolen from US citizens to obtain federal loans and grants.
According to the Justice Department, the money was channelled through bank accounts controlled by foreign actors, with US-based individuals allegedly helping receive and transfer the proceeds to overseas associates, including people in Kenya.
In an announcement on Thursday, October 29, the department disclosed that investigators had seized more than US$750,000 (approximately Sh97 million) in cryptocurrency from an account belonging to a Kenyan national linked to the suspected network.
Assistant Attorney General Colin McDonald said the investigation would pursue suspects operating both inside and outside the United States.
“Whether you are in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you,” McDonald said.
The department also revealed that investigators had identified 830,840 potentially fraudulent Federal Student Aid identification accounts associated with nearly US$130 million (approximately Sh16.8 billion) and recommended that the Department of Education disable them to prevent further losses.
Kenyan national indicted in Nebraska
One of the cases involves Francis Mogambi, a Kenyan citizen indicted by a federal grand jury in Nebraska on October 19.
He faces five counts of theft of government money and five counts of aggravated identity theft.
Prosecutors allege that between November 2025 and May 2026, Mogambi worked with associates in Kenya to obtain stolen identities belonging to American citizens and use them to enrol unsuspecting victims in educational institutions.
The alleged scheme involved redirecting federal student financial aid payments to accounts controlled by the suspects.
According to the indictment, Mogambi allegedly retained 30 per cent of the proceeds and transferred the remainder to co-conspirators in Kenya.
The Justice Department said court documents also indicated that he received US$2,000 (approximately Sh258,000) weekly and attempted to recruit another person into the operation.
The Nebraska indictment lists an intended loss of US$20,000 in Mogambi’s case. He was arrested and detained pending trial.
Virginia case involves more than 700 fraudulent refunds
In a separate investigation, a Kenyan national was indicted by a federal grand jury in Virginia on October 21 over an alleged scheme involving more than 700 fraudulent student aid refunds.
The Justice Department estimates that the deposits amounted to approximately US$1.44 million (about Sh186 million).
Investigators allege that the suspect used multiple bank accounts across financial institutions to receive the refunds before conducting thousands of wire transfers and money-service transactions.
At least US$1.3 million (approximately Sh168 million) was allegedly transferred to accounts in the United States and Kenya.
The defendant faces charges of conspiracy to commit wire fraud and student aid fraud.
Three arrested in New Jersey over Kenya links
The third case involves three defendants arrested in New Jersey over an alleged conspiracy to defraud the US Department of Education of more than US$1 million in federal student aid.
The Justice Department identified them as Mabed Patricia Utate-Alberto, Patricia Arisleydi Perez and George Arturo Alfau Mendez.
Prosecutors allege that the three received funds through American bank accounts after fraudulent financial aid applications were submitted using stolen identities.
They are accused of transferring the money overseas, after taking their share, to co-conspirators in Kenya associated with a purported Kenyan safari company.
The department said two alleged co-conspirators are based in Kenya and that prosecutors intend to pursue charges against them as the investigation continues.
Unlike the Nebraska and Virginia cases, the New Jersey defendants were arrested pursuant to a criminal complaint rather than a grand jury indictment.
US investigation identifies wider fraud exposure
Operation Ghostbusters is part of a wider US investigation into fraudulent student aid applications that investigators believe have been circulating since at least 2021.
The scheme allegedly involved so-called ghost students — individuals enrolled in colleges using stolen identities who never actually attended classes.
Federal investigators say the fraudulent applications enabled suspects to obtain financial aid refunds after tuition and other institutional charges had been deducted.
The FBI has identified more than US$32 million in losses in similar ghost-student schemes, with millions more suspected. The Justice Department estimates that the wider fraud could exceed US$200 million.
The investigation involves more than 40 open cases across 26 FBI field offices and over 20 US attorneys’ offices.
The department also credited Kenyan law enforcement agencies, including the Directorate of Criminal Investigations, the Asset Recovery Agency and the Office of the Director of Public Prosecutions, with assisting the investigation and recovery efforts.
The US authorities have indicated that the investigation will continue, including efforts to pursue alleged co-conspirators based in Kenya and recover funds suspected to have been stolen from American taxpayers.
