United States (U.S) federal authorities have uncovered an alleged massive, multi-year transnational student aid scam ring estimated at more than $200 million.
Dubbed Operation Ghostbusters, the joint investigation by the U.S Department of Justice (DOJ), the FBI, and the U.S. Department of Education highlights a growing wave of digital financial crimes leveraging stolen identities and virtual learning systems.
The criminal network, operating across the United States and several East African hubs centered in Kenya, exploited online enrollment portals and federal aid disbursements during and after the COVID-19 pandemic.
The U.S Department of Justice has also charged five individuals in a student-aid scam operation tied to Kenyan networks, involving stolen American identities.
The fraud, ongoing since at least 2021, may have led to losses exceeding $200 million nationwide.
Operation Ghostbusters has already resulted in the seizure of over $750,000 in cryptocurrency from an account linked to a Kenyan suspect.
Suspects allegedly used stolen identities to enrol fake students, obtain federal aid, and transfer gains to accounts in the US and Kenya.
According to the US Department of Justice and investigators. the activity has been ongoing since at least 2021, with estimates suggesting the wider fraud could exceed $200 million.
Announced on October 29, 2026, the investigation, known as Operation Ghostbusters, has also led to the seizure of more than $750,000 in cryptocurrency from an account belonging to a Kenyan national connected to the alleged scheme, according to the Justice Department.
“Today, we are announcing the first results of Operation Ghostbusters — a nationwide effort to stop a major fraud scheme targeting federal student aid, low-income Americans, and the American taxpayer,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division.
“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,” he added.
The FBI said it had identified more than $32 million in losses across similar ghost-student fraud schemes, with millions more suspected.
How the alleged U.S student-aid scam worked
According to the Justice Department, the network used stolen personal information belonging to U.S citizens to submit fraudulent applications for federal student aid through the Free Application for Federal Student Aid (FAFSA) system.
The identities were then used to enrol fictitious students at colleges and universities, allowing the applicants to obtain federal loans and grants.
After institutions deducted tuition and fees, the remaining funds were allegedly deposited into accounts controlled by the suspects or transferred to associates overseas.
The department outlined cases in three federal districts: Virginia, Nebraska, and New Jersey. In Virginia, a Kenyan national was indicted on October 21 over an alleged scheme involving more than $1.4 million in student aid.
Prosecutors said the defendant received more than 700 fraudulent aid-refund deposits totalling approximately $1.44 million, with at least $1.3 million transferred to accounts in the U.S and Kenya.
In Nebraska, Kenyan citizen Francis Mogambi was indicted on October 19 on five counts of government-money theft and five counts of aggravated identity theft.
Prosecutors alleged that he used stolen identities to obtain student aid between November 2025 and May 2026, keeping 30% of the proceeds and sending the rest to associates in Kenya.
In a separate New Jersey case, three defendants were charged over an alleged scheme involving more than $1 million in federal student-aid funds. The Justice Department said they allegedly received the money through U.S bank accounts before transferring funds to co-conspirators in Kenya.
The investigation has expanded beyond the initial charges. The department said authorities identified 830,840 potentially fraudulent Federal Student Aid identification accounts associated with nearly $130 million during September and October 2026, recommending that the Department of Education disable them.
The FBI is working with U.S agencies and Kenyan law-enforcement partners to investigate the alleged network, recover funds, and pursue additional suspects. The Justice Department stressed that the charges are allegations and all defendants are presumed innocent unless proven guilty in court.
