DOJ Unveils Nationwide 'Ghost Student' Aid Fraud Indictments: Five Charged, Over $750,000 in Crypto Seized, Scheme Put at Over $200 Million
The U.S. Department of Justice on October 29 unveiled the first results of Operation Ghostbusters, a nationwide crackdown on a 'ghost student' federal student aid fraud scheme: five defendants have been charged in New Jersey, Virginia and Nebraska, and investigators seized more than $750,000 in cryptocurrency in Kenya tied to the scheme. The department estimates the fraud, running since at least 2021, at well over $200 million.
According to the department, criminal actors stole the identities of U.S. citizens - many of them working Americans who had never attended college - created fraudulent Federal Student Aid (FAFSA) accounts, and enrolled nonexistent 'ghost students' at colleges and universities across the country. After aid was disbursed, refunds were diverted to accounts controlled by foreign actors, facilitated by U.S.-based money mules, including Kenyan nationals.
Fraudsters also used super intelligence (SI) to fill out applications and complete coursework for ghost students, and even to create the appearance of a fake student in an online classroom, to keep aid flowing, the department said. The FBI has so far identified more than $32 million in losses, with millions more suspected. In September and October 2026, investigators identified 830,840 potentially fraudulent student aid IDs relating to nearly $130 million and recommended that the Department of Education disable them.
Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division said these are the first results of the operation, and that the seizure was the first international seizure of its kind in Kenya in the Fraud Division's history. Under Secretary Nicholas Kent of the Department of Education said the department has saved taxpayers more than $2 billion in attempted student aid theft under the current leadership.
In the New Jersey case, three defendants were arrested on a criminal complaint alleging they acted as money mules from about March 2021, receiving more than $1 million in aid obtained with stolen identities and forwarding the funds, after taking a cut, to co-conspirators in Kenya associated with a purported safari company; intended loss is about $1.5 million. In the Eastern District of Virginia, a Kenyan national was indicted for allegedly receiving more than 700 fraudulent aid refund deposits totaling about $1,439,548 and transferring at least $1.3 million to accounts in the United States and Kenya. In Nebraska, Kenyan citizen Francis Mogambi was indicted on five counts of theft of government money and five counts of aggravated identity theft, carrying 10 years in mandatory minimums; he was arrested and detained pending trial.
More than 40 related cases are now open across 26 FBI field offices and more than 20 U.S. Attorney's Offices, the department said, in an investigation opened by the FBI Richmond Field Office after a referral from the Department of Education's Office of Inspector General. Indictments and complaints are merely allegations, and defendants are presumed innocent until proven guilty. People who believe they are victims can report through the Department of Education inspector general's hotline.
Source: GSM · USA (original Chinese edition)
Photo: 图：New Orleans 的 Tulane University 校园里的学生（资料图）。Tulane Public Relations 摄，CC BY 2.0，经 Wikimedia Commons。 / Students on the Tulane University campus in New Orleans (file photo). Photo by Tulane Public Relations, CC BY 2.0, via Wikimedia Commons.
