Operation Ghostbusters seized more than $750,000 in cryptocurrency as investigators probe suspected student aid fraud estimated to exceed $200 million.
The Justice Department announced charges against five defendants Thursday in a nationwide investigation into an alleged student aid fraud network that used stolen American identities to enroll fake college students and send taxpayer money overseas.
Dubbed “Operation Ghostbusters,” the investigation involves alleged money mules in the United States who prosecutors say received fraudulently obtained federal student aid, kept a portion, and transferred the remaining proceeds to associates in Kenya.
Authorities also announced the seizure of more than $750,000 from a cryptocurrency account belonging to a Kenyan national connected to the alleged scheme, with assistance from Kenyan law enforcement.
“If you steal American identities, if you steal taxpayer dollars, if you exploit programs meant to help students build a future — we will find you,” said Assistant Attorney General Colin M. McDonald. “Whether you are in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you.”
According to the department, perpetrators used stolen identities to submit fraudulent Free Application for Federal Student Aid applications and enroll “ghost students” who never actually attended classes. Federal loan and grant refunds were then diverted into accounts controlled by participants in the scheme.
Investigators estimate the broader fraud exceeds $200 million. More than 40 cases are open across 26 FBI field offices and more than 20 US attorneys’ offices.
The charges follow earlier efforts to stop fraudulent student aid payments. In June, White House anti-fraud task force Vice Chair Andrew Ferguson said the Department of Education had blocked $150 million in fraudulent federal student loans over the preceding months. That report also noted that California community colleges experienced $13 million in financial aid fraud in 2024.
The problem has also surfaced in Minnesota, where more than 7,700 suspected “ghost students” were flagged across the Minnesota State system during the 2024–2025 school year. Education Secretary Linda McMahon said 1,834 ghost students received $12.5 million in taxpayer-funded grants and loans. Fraudulent enrollments can also fill limited class spaces, preventing legitimate students from registering.
In New Jersey, authorities arrested Mabed Patricia Utate-Alberto, Patricia Arisleydi Perez and George Arturo Alfau Mendez on a criminal complaint alleging they conspired with people in Kenya to obtain federal student aid through fraudulent applications.
Prosecutors allege the three received the money in US bank accounts, took a cut and transferred the remainder overseas to associates connected to a purported Kenyan safari company. The department listed the case’s intended loss at $1.5 million and said it plans to pursue charges against two alleged co-conspirators in Kenya.
A separate indictment returned October 21 in Virginia charges an unnamed Kenyan national with conspiracy to commit wire fraud and student aid fraud. The case remains under seal.
Authorities allege that the defendant received more than 700 fraudulent student aid refund deposits totaling approximately $1.44 million, then conducted thousands of transactions that moved at least $1.3 million into accounts in the United States and Kenya.
In Nebraska, a federal grand jury indicted Kenyan citizen Francis Mogambi on five counts of theft of government money and five counts of aggravated identity theft.
Prosecutors allege Mogambi worked with associates in Kenya between November 2025 and May 2026 to enroll identity theft victims in educational institutions and redirect financial aid checks to himself. He allegedly kept 30 percent and sent the rest to his associates.
According to the department, Mogambi entered the United States in May 2024 through the Diversity Visa lottery and subsequently received a permanent resident card. He was arrested and ordered detained pending trial.
Investigators also identified 830,840 potentially fraudulent federal student aid account IDs associated with nearly $130 million during September and October, recommending that the Department of Education disable them. The announcement did not establish that the entire amount had been disbursed or lost.
Authorities said many identity theft victims had never attended college and discovered records falsely showing enrollment at schools hundreds of miles away.
People who believe their identities were used in the scheme can report it through the Department of Education inspector general’s complaint form.
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