Americans who had never attended college were stunned to discover that they had been enrolled at institutions hundreds of miles from home. Someone had used their identities to apply for student loans, and the money had disappeared.
US prosecutors now believe those cases form part of a much larger fraud operation with connections to Kenya. Five people, including two Kenyan nationals, have been charged, while investigators estimate that the wider suspected scheme involves more than $200m.
The US Department of Justice announced the charges on October 29, describing an investigation that has uncovered hundreds of thousands of potentially fraudulent student aid accounts. Some of the money allegedly passed through American banks before reaching associates in Kenya.
The operation, codenamed ‘Operation Ghostbusters’, has also brought American and Kenyan investigators together to trace the money and pursue suspects operating across borders.
Students who never went to college
The alleged scheme relied on a weakness in America’s student aid system.
According to prosecutors, fraudsters obtained the personal details of US citizens and used them to apply for financial assistance through the Free Application for Federal Student Aid, commonly known as FAFSA.
They then enrolled fictitious students at colleges and universities, allowing federal loans and grants to be released.
Instead of paying for education, the money was allegedly diverted into bank accounts controlled by people involved in the operation.
The real owners of the stolen identities often knew nothing about what was happening.
Some had never progressed beyond secondary school. Others discovered that their names appeared on college records despite never having applied to those institutions.
Investigators say the fraudsters even completed coursework on behalf of the fictitious students to keep the payments coming.
For the victims, the consequences could extend well beyond identity theft. Their personal records had been used to obtain loans they never requested, leaving them potentially associated with debts that were not theirs.
How investigators traced money to Kenya
The Kenyan connection became clearer as prosecutors examined where the student aid payments went.
In Virginia, a Kenyan national has been charged with conspiracy to commit wire fraud and student aid fraud.
According to the indictment, the defendant received more than 700 fraudulent student aid refunds worth approximately $1.44m.
Investigators say at least $1.3m was subsequently transferred through accounts in the United States and Kenya.
In Nebraska, another Kenyan national, Francis Mogambi, faces charges of theft of government money and aggravated identity theft.
Prosecutors allege that Mogambi worked with associates in Kenya to obtain stolen identities, enrol fictitious students and collect financial aid payments.
He allegedly kept 30 percent of the proceeds and sent the remainder to his collaborators.
A separate case in New Jersey involves three defendants accused of receiving fraudulently obtained student aid and transferring the money overseas after taking a share.
Some payments allegedly went to associates in Kenya connected to what prosecutors described as a purported safari company.
Two people based in Kenya have also been identified as suspected co-conspirators. American prosecutors say they intend to seek charges against them as the investigation continues.
Kenyan investigators help recover cryptocurrency
The investigation has already led to the recovery of suspected criminal proceeds.
US authorities say cooperation with Kenya’s Directorate of Criminal Investigations, Asset Recovery Agency and Office of the Director of Public Prosecutions helped them seize more than $750,000 from a cryptocurrency account belonging to a Kenyan national linked to the alleged scheme.
The seizure followed a visit by American officials to Kenya in September to strengthen cooperation on prosecutions, extradition, and asset recovery.
The Justice Department described it as the first international seizure of its kind undertaken by its Fraud Division.
The case comes amid growing international concern over financial crimes involving networks operating across several countries.
Earlier this month, Interpol-led cybercrime raids across Africa recovered more than $105m and resulted in 1,462 arrests.
A separate Interpol assessment put Africa’s reported cybercrime losses at $484m in 2025, although that figure covers a much broader range of offences than the American student aid investigation.
Suspected fraud stretches back to 2021
The scale of the American investigation has surprised even seasoned fraud investigators.
Between September and October 2026, authorities identified 830,840 potentially fraudulent student aid accounts associated with nearly $130m in federal assistance.
They recommended that the Department of Education disable the suspicious accounts.
The FBI has separately identified more than $32m in losses from similar schemes, with additional losses suspected.
Prosecutors believe the wider fraud has been operating since at least 2021 and estimate its scale at more than $200m. That remains an estimate, not a confirmed amount stolen.
Education Under Secretary Nicholas Kent said the schemes were taking money away from people who genuinely needed help paying for their education.
‘Every dollar that falls into the hands of a fraudster is a dollar that will not go to a student in need,’ he said.
More than 40 cases remain under investigation across 26 FBI field offices and over 20 US Attorney’s Offices.
