More than 830,000 potentially fraudulent student aid identification numbers linked to nearly $130m in federal education funds have been identified by United States investigators probing a nationwide fraud scheme involving stolen identities and fictitious college enrolments.
The discovery forms part of an investigation into an alleged $200m fraud network, with the US Department of Justice linking some of the operations to associates in Kenya.
The department disclosed the findings on Thursday while announcing the first results of Operation Ghostbusters, a nationwide crackdown on the alleged diversion of federal financial assistance meant for students.
Investigators said the scheme involved criminals obtaining the personal information of American citizens and using it to submit fraudulent applications for federal student loans and grants through the Free Application for Federal Student Aid system.
The identities were subsequently used to enrol fictitious students, popularly described as ghost students, in colleges and universities to qualify for government financial assistance.
Although the funds were approved in the names of the supposed students, investigators said the individuals whose identities were stolen were often unaware of the enrolments, while the fictitious students did not attend the institutions.
The fraudsters allegedly devised ways to make the fake students appear to participate in classes and complete coursework to sustain the flow of financial aid.
Once the money was released, refunds were allegedly channelled into bank accounts controlled by members of the network, including individuals in the United States who served as money mules before transferring the proceeds to associates abroad.
Assistant Attorney General of the Justice Department’s National Fraud Enforcement Division, Colin McDonald, said the operation had resulted in charges against five defendants and the seizure of more than $750,000 in cryptocurrency connected to the alleged network.
He described the investigation as a nationwide effort to protect federal student assistance, low-income Americans and taxpayers from organised fraud.
The department also disclosed that the investigation had uncovered alleged operations in New Jersey, Virginia and Nebraska, with Kenyan nationals and their associates featuring in several cases.
In New Jersey, three defendants, Mabed Patricia Utate-Alberto, Patricia Arisleydi Perez and George Arturo Alfau Mendez, were accused of conspiring with individuals in Kenya between March 2021 and January 2026 to obtain more than $1m in federal student aid.
The trio allegedly received the proceeds through American bank accounts before transferring money to their associates in Kenya after retaining their shares. All three have been arrested, while prosecutors are expected to pursue charges against two Kenya-based co-conspirators.
In Virginia, a Kenyan national was indicted on October 21 over an alleged scheme involving more than $1.44m obtained through multiple bank accounts, with at least $1.3m reportedly transferred through thousands of transactions to accounts in the United States and Kenya.
Another Kenyan citizen, Francis Mogambi, was indicted in Nebraska over allegations that he collaborated with associates in Kenya between November 2025 and May 2026 to steal American identities, create fictitious student enrolments and divert federal education funds.
Prosecutors alleged that Mogambi retained 30 per cent of the proceeds and transferred the balance to his co-conspirators in Kenya. He was also accused of telling a prospective recruit that the operation earned him $2,000 weekly.
Beyond the individual cases, the Federal Bureau of Investigation identified more than $32m in losses from similar ghost-student schemes, with investigators suspecting that the actual amount could be substantially higher.
The Justice Department said the investigation had been ongoing since at least 2021, adding that more than 40 related cases were open across 26 FBI field offices and over 20 US Attorneys’ Offices.
The department said the FBI’s Richmond Field Office initiated the investigation following a referral from the US Department of Education’s Office of Inspector General.
McDonald warned that the government would pursue individuals involved in the alleged theft of American identities and diversion of taxpayer-funded education assistance, regardless of their location.
