DOJ Unveils Ghost Students Scam Indictments

Five people have been charged in connection with an alleged nationwide scheme involving the theft of U.S. citizens’ identities to enroll so-called ghost students in educational institutions and fraudulently obtain federal student aid funds.The Department of Justice (DOJ) said on Oct. 29 that two Kenyan nationals were indicted in Nebraska and Virginia, and Kenyans—George Mendez, Mabed Utate-Alberto, and Patricia Perez—were charged in New Jersey by criminal complaint for allegedly acting as “money mules,” opening bank accounts used to obtain more than $1 million in federal student aid funds.One of the Kenyans had arrived after winning a green card in the “Diversity Visa” lottery under the Biden administration, according to the Justice Department.At a news conference to announce the indictments, Colin McDonald, assistant attorney general for the National Fraud Enforcement Division, said it was “organized fraud at scale.”“Investigators believe this fraud has been ongoing since at least 2021, potentially reaching several hundred million dollars lost,” McDonald said. “In California, nearly a third of community college applications submitted in 2024 were reportedly flagged as fraudulent.”DOJ, in its statement, said that the “ghost students” never 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,” the Justice Department stated. “Fraudsters even use super intelligence to complete required coursework at schools to maintain the ‘ghost student’ scam.”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.“But lost dollars don’t complete the whole story. The complete story includes the plight of an American citizen.”The Department of Education building in Washington on Dec. 3, 2024. Jose Luis Magana/AP PhotoHe then explained that at least one U.S. citizen, who graduated from high school but never attended college, discovered that his identity had been stolen and used to obtain a student loan.“His identity was stolen, his credit is now at risk, and his name is on the bill,” McDonald said.Mendez, Utate-Alberto, and Perez are accused of being involved in the scam between March 2021 and January 2026.After they received the Federal Student Aid money, they would take their cut and transfer the remainder to an associate in Kenya, who allegedly ran a front company offering safari trips.On Oct. 19, a grand jury in Nebraska indicted Francis Mogambi on five counts of theft of government money and five counts of aggravated identity theft.Federal prosecutors alleged that between November 2025 and May 2026, Mogambi worked with accomplices in Kenya to steal the identities of U.S. citizens, and then enroll them as “ghost students” in U.S. colleges.After the fictitious students enrolled, Mogambi allegedly diverted their Federal Student Aid payments to himself, keeping a portion and sending the rest to the gang in Kenya.‘Diversity Visa’ Lottery WinnerMogambi arrived in the United States on May 15, 2024, having won the “Diversity Visa” lottery and been issued a DV1 visa. He was later given a green card under the Biden administration.The Trump administration sought to pause the green card lottery after it emerged that a Portuguese national suspected of a shooting at Brown University on Dec. 13, 2025, had come in on the scheme.Red Eagle Law, an immigration firm, challenged the State Department’s failure to open registration for the 2027 lottery, after the department announced a delay in November 2025.On Oct. 29, a U.S. Court of Appeals for the Ninth Circuit panel granted the Trump administration a stay on reopening the program.On Oct. 21, 2026, a federal grand jury in the Eastern District of Virginia returned an indictment against a fifth individual, an unnamed Kenyan national, who is accused of conspiracy to commit wire fraud and student aid fraud.According to the indictment, he used the same technique to steal $1.4 million of taxpayers’ money, using more than 700 fraudulently obtained Federal Student Aid refund deposits.The DOJ said $750,000 in cryptocurrency had been seized so far as part of the Operation Ghostbusters investigation.It was not immediately clear whether any of the five accused had legal representatives who could comment on their behalf.Under Secretary for Education Nicholas Kent said every dollar that falls into the hands of a fraudster is a dollar that does not go to a student in need.“Under President [Donald] Trump and Secretary [Linda] 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,” Kent said.Assistant Director Heith Janke, of the FBI’s Criminal Division, said personal data belonging to U.S. citizens were stolen to fuel a criminal enterprise.“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,” Janke said.“To date, the FBI has identified more than $32 million in losses, with millions more suspected, in similar ghost student schemes.”Earlier in October, in an unconnected development, the Department of the Treasury’s Financial Crimes Enforcement Network said it had discovered $270 million in suspicious financial activity likely associated with student aid program fraud.Correction: A previous version of this article misstated the number of people indicted, the terms of the New Jersey criminal complaint, and the terms of Red Eagle Law’s legal challenge. The Epoch Times regrets the errors.