Justice Department Unveils Indictments in Nationwide ‘Ghost Student’ Fraud Scam Linked to Kenyan Network

The Justice Department's National Fraud Enforcement Division (Fraud Division), along with the U.S. Attorney's Offices for the Eastern District of Virginia, Nebraska, and New Jersey announced indictments resulting from Operation Ghostbusters. Operation Ghostbusters is a nationwide investigation into a large-scale student-loan fraud scheme in which criminal actors created fraudulent Federal Student Aid (FAFSA) accounts using stolen U.S. citizen identities to enroll "ghost students" in educational institutions. After loan and grant disbursements, the refunds were diverted to bank accounts controlled by foreign actors and facilitated by U.S.-based money mules, including Kenyan nationals.

"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. "The Department is charging five defendants and announcing the seizure of more than $750,000 in cryptocurrency tied to this scheme through a network associated with Kenyan nationals. This is the first international seizure of its kind in Kenya. 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."

"Under President Trump and Secretary McMahon's leadership, the Department of Education has saved taxpayers more than $2 billion in attempted student aid theft - ensuring students receive the critical funding they need, not fraudsters," said Under Secretary Nicholas Kent for the Department of Education. "Every dollar that falls into the hands of a fraudster is a dollar that will not go to a student in need. Today's action sends a strong message to fraudsters both at home and abroad: the Trump Administration is watching and will hold you accountable and protect American taxpayers."

"The perpetrators masterminded a deliberate plot to defraud the U.S. government of millions of dollars through the exploitation of financial aid programs designed to help hardworking American students. These criminals used stolen personal data belonging to U.S. citizens to fuel their criminal enterprise," said Assistant Director Heith Janke, of the FBI's Criminal Division. "To date, the FBI has identified more than $32 million in losses, with millions more suspected, in similar ghost student schemes. This stops now. The FBI, working hand-in-hand with our partners at the Department of Education and Department of Justice will follow all evidence, track every dollar, and pursue each criminal who seeks to exploit our nation's systems."

"The U.S. Attorney's Office for the Eastern District of Virginia is proud to be a leading part of law enforcement's use of innovative techniques to fight fraud: using data to expose crime hiding in plain sight, starting with criminals who stole federal student aid using the stolen identities of 'ghost students,'" said First Assistant U.S. Attorney Theophani K. Stamos for the Eastern District of Virginia. "Together with the Department of Education's Office of Inspector General, the FBI Richmond cyber squad has already uncovered hundreds of participants and hundreds of millions of dollars in stolen funds, sending approximately 50 referrals to 26 FBI field offices across the country, and we are just getting started. Working with partners around the world, we are sending a clear message: student aid belongs to real students, the data always leaves a trail, and we will follow it wherever it leads."

Notable cases

• District of New Jersey (Criminal Complaint) - 26-16210 (JRA) - $1.5 million intended loss

Beginning in or about March 2021 and continuing through at least January 2026, Mabed Patricia Utate-Alberto, also known as, "Mabed Alberto Utate," Patricia Arisleydi Perez, and George Arturo Alfau Mendez, also known as, "George Alfau" conspired with persons located in Kenya to defraud the Department of Education to obtain more than $1 million in FSA funds. Utate, Perez, and Mendez were witting money mules located in the U.S. that used U.S. bank accounts to receive FSA program funds obtained through false and fraudulent FAFSA applications using stolen American identities. After Utate, Perez, and Mendez received the money, they transferred - after taking their cut - the funds overseas to co-conspirators in Kenya associated with a purported Kenyan safari company.

All three defendants have been arrested pursuant to a criminal complaint. Two co-conspirators are located in Kenya and are associated with a safari company. The government will seek to charge these co-conspirators as this case continues.

This case is being prosecuted by Assistant U.S. Attorney Francesca Liquori for the District of New Jersey.

• Eastern District of Virginia (Under seal) - $1.4 million intended loss

On Oct. 21, a federal Grand Jury in the Eastern District of Virginia returned a multi-count indictment charging a Kenyan national with conspiracy to commit wire fraud and student aid fraud. According to the indictment, the defendant conspired with fraudsters in Kenya to obtain 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. The defendant acted as a U.S. based money mule for the transnational fraud conspiracy. The defendant used multiple bank accounts across several financial institutions to receive over 700 fraudulently obtained federal student aid refund deposits, totaling approximately $1,439,548. The defendant then engaged in thousands of wire transfer and money service business transactions that resulted in at least $1.3 million being transferred to accounts in the United States and Kenya.

This case is being prosecuted by Assistant U.S. Attorney/Distinguished Senior Counsel Brian Hood for the Eastern District of Virginia.

• District of Nebraska (Indictment) - 4:26CR3089 - $20,000 intended loss

On Oct. 19, a federal Grand Jury in Nebraska returned a ten-count indictment against Francis Mogambi, a Kenyan citizen, charging him with five counts of Theft of Government Money and five counts of Aggravated Identity Theft. Mogambi faces 10 years in mandatory minimums based on his use of stolen U.S. citizen identities during and relation to his crimes. Mogambi was promptly arrested, and thereafter detained pending trial by the court based on his risk of non-appearance and the threat he posed to the public.

According to the indictment, between Nov. 2025 and May 2026, Mogambi fraudulently obtained federal student financial aid using stolen identities. Mogambi worked with associates in Kenya to steal identities of United States citizens, use those identities to fraudulently enroll American victims in educational institutions, and redirect federal financial aid checks to himself, keeping 30% of the fraud proceeds and sending the rest to his conspirators in Kenya. 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.

Mogambi arrived in the United States on May 15, 2024. He won the "Diversity Visa" lottery and was issued a DV1 visa. He was issued a Permanent Resident Card shortly after.

This case is prosecuted by Assistant U.S. Attorney/District Fraud Counsel Daniel Packard for the District of Nebraska.

In September, representatives from the Fraud Division and its agency partners visited Kenya to promote extradition, prosecution, and the return of assets stolen from United States taxpayers. Through critical assistance and intelligence from Kenyan law enforcement partners, investigators were able to seize over $750,000 from a cryptocurrency account belonging to a Kenyan national connected to this fraud scheme. This is the first international seizure of its kind in the Fraud Division's history. In Sept./Oct. of 2026, investigators identified 830,840 potentially fraudulent FSAIDs relating to nearly $130 million and recommended that the Department of Education disable those IDs.

Operation Ghostbusters is an unprecedented effort by the Fraud Division at the Department of Justice in connection with U.S. Attorney and agency partners across the country to respond to this urgent and ongoing fraud committed against the American people.

Beginning in or about 2021, community colleges and universities across the United States identified fraudulent FAFSA applications that resulted in the disbursement of Federal Student Aid (FSA) program refunds to bank and other financial accounts opened in the names of individuals other than the students who had actually applied for the FSA program funds in the first instance.

Conspirators use stolen identity information from Americans to submit fraudulent FAFSA applications for "ghost students" in order to fraudulently obtain federal program funds. The "ghost students" never actually attend the college classes for which those funds were awarded. Instead, using super intelligence, fraudsters place "ghost" or fake students in classrooms to keep federal student loan funds flowing. Fraudsters even use super intelligence to complete required coursework at schools to maintain the "ghost student" scam.

These fraudsters are exploiting Americans who have never been to college before, preventing the Department of Education from cross-checking applicants. Many known victims have reported attaining only high school diplomas - and are shocked by their faked attendance at an institution hundreds of miles away.

Investigators believe that this fraud has been ongoing since at least 2021. Estimates put the scale of the fraud well over $200 million. The investigation was opened by the FBI Richmond Field Office following a USDOE-OIG referral. There are now more than 40 open cases across 26 FBI field offices and more than 20 U.S. Attorneys' Offices. Through its District Fraud Counsel network of Assistant United States Attorneys, the Division was uniquely positioned to scale this investigation, resulting in targets sent to U.S. Attorney's Offices coast-to-coast.

Operation Ghostbusters continues to partner with Kenyan law enforcement counterparts to recover American tax dollars pilfered by overseas actors and bring fraudsters hiding abroad to justice.

Law Enforcement Partners Participation:

Operation Ghostbusters is assisted by the Department of Justice, the National Fraud Enforcement Division, the Federal Bureau of Investigation, Department of Education-OIG, the Criminal Division's Office of International Affairs, the Computer Crime and Intellectual Property Section, the Money Laundering, Narcotics and Forfeiture Section, the Civil Division's Office of Foreign Litigation, the Office of Overseas Prosecutorial Development, Assistance, and Training, the DOJ Civil Division, the State Department, the Federal Bureau of Investigation, the Department of Education Office of Inspector General, U.S. Customs and Border Protection, the Department of Education, the White House Task Force to Eliminate Fraud, and Kenya's Directorate of Criminal Investigations, Asset Recovery Agency, and Office of Director of Public Prosecutions.

The Justice Department is providing cybercrime and intellectual property technical assistance to foreign law enforcement, prosecutorial, and judicial partners in other countries through the ICHIP program, including in this matter the ICHIP attorney advisor in Dar es Salaam, Tanzania, and the global ICHIP for Dark Web and Cryptocurrency. The Criminal Division's ICHIP program is jointly administered by the Criminal Division's Office of Overseas Prosecutorial Development, Assistance and Training and the Computer Crime and Intellectual Property Section, through partnership with the U.S. Department of State's Bureau of International Narcotics and Law Enforcement Affairs (State / INL). Significant assistance is also being provided through the U.S. Department of Justice Resident Legal Advisor in Nairobi, Kenya, a position that is also funded by State / INL.

On April 7, the Department of Justice announced the creation of the Fraud Division. The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

An indictment, information, or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Alert: If you believe you are a victim of this fraud, please report your matter to the Department of Education Hotline Complaint Form: oig.ed.gov/oig-hotline/complaint-formLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link.. The Federal Bureau of Investigation has sent letters to many identified victims. If you have received this letter, please follow the instructions in the letter. If you have questions or concerns, please contact your local FBI Field Office.