The indictments come along with the seizure of more than $750,000 in cryptocurrency tied to the scheme through a network associated with Kenyan nationals, according to Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division.
McDonald announced the indictments Thursday and said they were the result of an investigation dubbed “Operation Ghostbusters,” a nationwide effort to crack down on student-loan fraud schemes in which cybercriminals create fake Federal Student Aid accounts using stolen U.S. identities to enroll “ghost students” at various colleges and universities.
“This is the first international seizure of its kind in Kenya,” McDonald said. “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.
“Whether you are in Nebraska, New Jersey, Virginia, or Nairobi, we will pursue you.”
“Every dollar that falls into the hands of a fraudster is a dollar that will not go to a student in need,” added Under Secretary Nicholas Kent for the Department of Education.
Assistant Director Heith Janke, of the FBI’s Criminal Division, said the FBI has identified more than $32 million in losses related to similar ghost student schemes. The DOJ said investigators in September and October identified 830,840 potentially fraudulent Federal Student Aid IDs connected to $130 million and recommended that the Department of Education disable those IDs.
Investigators believe the fraud has been taking place since at least 2021 and could involve “well over $200 million.” The department said there are currently more than 40 open cases throughout the nation.
The “ghost students” never went to the classes for which the funds were awarded, but instead used “super intelligence” – the administration’s preferred term for what was previously known as artificial intelligence – to complete online coursework in order to keep the financial aid flowing, according to the DOJ.
Charged in connection with the scheme are:
Francis Mogambi, a Kenyan citizen, who was indicted by a federal grand jury in Nebraska Oct. 19 with five counts of theft of government money and five counts of aggravated identity theft.
The indictment alleges that Mogambi used stolen identities to get federal student aid from Nov. 2025 through May 2026. He kept $30% for himself and sent the rest to conspirators in Kenya, the DOJ states.
“Court documents also reflect that Mogambi attempted to recruit an individual into his scheme and openly shared the details of this brazen conspiracy to steal money from the American people, sharing that he received $2,000 a week and that he needed a business so that he could cash larger checks and not pay taxes,” the DOJ said in a statement.
Authorities say Mogambi, who has been arrested in the case, won the “Diversity Visa” lottery, arrived in the U.S. on May 15, 2024 and obtained a permanent resident card.
Also charged in the scheme are Mabed Patricia Utate-Alberto, also known as, “Mabed Alberto Utate,” Patricia Arisleydi Perez, and George Arturo Alfau Mendez, also known as, “George Alfau.” The DOJ says the trio acted as “witting money mules” for individuals in Kenya to fraudulently obtain $1 million in federal student aid.
All three defendants have been arrested. A sealed indictment says a fifth person, who remains at large, conspired with others in Kenya to get and use the stolen identities of U.S. citizens to submit false and fraudulent FAFSA applications to steal over $1.4 million in student aid.
