Two Kenyan nationals are among five people charged in the United States over an alleged scheme involving the theft of American identities to fraudulently obtain federal student financial aid worth approximately $2.9 million (KSh 376 million). The cases are part of a wider investigation dubbed Operation Ghostbusters, which is targeting individuals accused of stealing personal information belonging to American citizens and using it to create fictitious students to access government-funded education assistance. According to the US Department of Justice, the five defendants are facing charges in three separate cases filed in New Jersey, Virginia and Nebraska.
Two of the suspects are Kenyan nationals who were separately charged in Virginia and Nebraska, while three other defendants were arrested in New Jersey over their alleged involvement in moving fraudulent student aid proceeds to associates in Kenya. Prosecutors estimate that the three cases involved intended financial losses of approximately $2.9 million, with investigations also pointing to other individuals believed to have participated in the operation. Two additional suspects based in Kenya, who allegedly worked with the defendants arrested in New Jersey, are expected to face charges as investigations continue.
Kenyan Suspect Accused of Receiving KSh 186 Million in Fraudulent Student Aid
In one of the cases, a Kenyan national is accused of receiving more than 700 fraudulent student aid refund deposits amounting to approximately $1.44 million (KSh 186 million) through several bank accounts. Prosecutors allege that the suspect subsequently transferred at least $1.3 million (KSh 168 million) through thousands of wire transfers and transactions involving money service businesses. The money was reportedly moved through accounts in both the United States and Kenya as part of efforts to distribute proceeds obtained through the alleged fraud.
Separately, the US Department of Justice announced the seizure of cryptocurrency valued at more than $750,000 (KSh 97 million) from an account belonging to a Kenyan national connected to the wider investigation. The seizure forms part of efforts by American authorities to trace and recover funds believed to have been obtained through fraudulent student financial aid applications.
How the Ghost Student Scheme Worked
According to investigators, the suspects allegedly obtained personal information belonging to American citizens, particularly individuals who had never attended college, and used the details to create fictitious student identities. These fictitious individuals were commonly referred to as ghost students. The suspects allegedly used the stolen identities to enrol the fake students in colleges and universities across the United States before submitting applications for federal financial assistance through the Free Application for Federal Student Aid (FAFSA).
Once the applications were approved, the US Department of Education released student loans and grants to the institutions where the fictitious students had supposedly enrolled. After tuition fees and other institutional charges were deducted, the remaining funds were refunded into bank accounts allegedly controlled by the suspects and their associates. The money was then transferred through different accounts and financial transactions, with some of the proceeds reportedly sent to individuals operating in Kenya.
In a statement shared on X, the White House accused Kenyan nationals of participating in the scheme by using stolen American identities to obtain government-funded student assistance for themselves and their overseas associates. The White House explained that the fraudulent funds were often transferred abroad shortly after being released.
Three Defendants Arrested in New Jersey
In a separate case, three individuals were arrested in New Jersey over allegations that they received more than $1 million (KSh 129 million) in fraudulent student financial aid proceeds. Prosecutors allege that the defendants facilitated the movement of the money to co-conspirators based in Kenya after retaining a portion for themselves. The funds were reportedly transferred to associates linked to a purported safari company operating in Kenya.
According to the charges, the alleged operation ran between March 2021 and January 2026, with prosecutors estimating the intended financial losses in this case at approximately $1.5 million. Authorities have also identified two additional individuals in Kenya who allegedly worked with the New Jersey defendants and are expected to face charges as the investigation progresses. The case has drawn attention to the alleged use of international financial networks to move proceeds from identity theft and government assistance fraud across borders.
Kenyan National Indicted in Nebraska
Meanwhile, Kenyan citizen Francis Mogambi has been indicted in Nebraska on 10 counts relating to the alleged theft of government funds and aggravated identity theft. Prosecutors allege that Mogambi participated in the fraudulent student aid scheme between November 2025 and May 2026. According to the indictment, he allegedly used stolen American identities to submit fraudulent applications for federal student financial assistance. Investigators further claim that Mogambi retained approximately 30 per cent of the proceeds while transferring the remaining funds to associates based in Kenya. The charges form part of the broader investigation into individuals suspected of exploiting the American student financial aid system.
US Authorities Identify More Than 830,000 Suspicious Student Aid Accounts
Beyond the five defendants, investigators have uncovered a much larger network of potentially fraudulent student financial aid applications. Authorities have identified approximately 830,840 potentially fraudulent federal student aid identification accounts associated with nearly $130 million in funding.
Following the discovery, recommendations were made for the US Department of Education to disable the accounts to prevent further misuse of government resources. The FBI has also identified more than $32 million in losses linked to similar ghost student fraud schemes, with investigators suspecting that the actual financial impact could be higher. The findings have raised concerns about the vulnerability of government-funded education programmes to identity theft and organised financial fraud.
Operation Ghostbusters Investigation Continues
Operation Ghostbusters is being conducted by the US Department of Justice’s National Fraud Enforcement Division in collaboration with the Federal Bureau of Investigation (FBI), the Department of Education and other American law enforcement agencies. The investigation also involves cooperation with Kenyan authorities as investigators seek to identify individuals operating outside the United States, trace suspected proceeds and pursue the recovery of funds.
The US Department of Justice has indicated that investigations remain ongoing, with further action expected against individuals suspected of participating in the alleged scheme. The cases highlight the international dimension of identity theft and financial aid fraud, with American investigators following money trails that allegedly extend from educational institutions in the United States to bank accounts and associates in Kenya.
